With North Carolina rejecting Medicaid expansion under the Affordable Care Act (ACA), and opting out of a state-federal insurance exchange partnership, Ashe County health care providers are concerned about how they will best serve the community in the future.
“We were really hoping with expansion and the individual mandate our amount of charity care would be diminished,” said R. D. Williams, CEO of Ashe Memorial Hospital (AMH), which has seen $1.5 million losses from operations per year for the last eight to 10 years.
A non-profit hospital, AMH is required by law to deliver a certain level of charity care, Williams said.
With 21 percent of Ashe Countians uninsured, though, “It’s gotten beyond charity, now,” he said. “We deliver $2-3 million in uncompensated care annually.”
Medicaid compensates hospitals at less than cost, Williams said, paying 85-93 percent of the total billed. Approximately 84 percent of AMH’s patients are on Medicaid or Medicare, and nine percent are uninsured and pay nothing.
Only seven percent of AMH’s patients are commercially insured, he said.
“We’re a multi-million dollar business, but we’re a small hospital,” he said, adding that no individual at AMH earns any dividends or profits. All available financial resources are reinvested in upgrading equipment and infrastructure and improving staff and services, he said.
Under the ACA, hospitals in N.C. accepted $7.8 billion in Medicaid reimbursement reduction over the six year period from 2014-19, Williams said. Expansion of Medicaid, resulting in more insured patients, was anticipated to make up the difference.
By not expanding Medicaid eligibility to include residents with incomes up to 133 percent of the federal poverty guideline, the state has also rejected $15.5 billion in Medicaid dollars over the same six years which would compensate hospitals for care currently provided below cost or for free, Williams said.
The effects of these losses are felt beyond bottom lines. “Without increased reimbursement, (the ability of hospitals) to recruit new physicians, expand existing services…expand their workforce and increase wages is limited,” said Williams.
“The U.S. spends more on health care with worse outcomes than almost any industrialized nation in the world,” he said. “The government can’t pay for everything, but I do think access to health care is one way to reduce the cost to society.”
While N.C. has chosen not to expand Medicaid, the ACA’s individual mandate will still be in effect, Williams said. And the federal government will still be setting up an insurance exchange, and through it subsidizing the purchase of commercial insurance for those not eligible for Medicaid.
One group will remain uninsured: single, childless adults ages 18-64 earning less than $11,170 per year are not eligible for Medicaid, nor are they mandated to purchase insurance on the exchange, and thus eligible for federal subsidies, Williams said. “They will have to go to the ER or pay out-of-pocket somehow.”
Ashe Free Medical Clinic (AFMC) Executive Director Greg Bolac said, “The poorest and most needy are the one’s who won’t get any help.”
The AFMC currently serves uninsured patients age 18-64 with incomes up to 200 percent of poverty level, Bolac said.
“The effect on us (is) we have a decision to make,” Bolac said. “What do we do with the patient who should be buying insurance but isn’t?”
“Should we say if you make more than 100 percent of the federal poverty guideline we won’t serve you?” he said.
The decision will have to be made when the federal exchange is established in October. “We’re just waiting for the other shoe to drop,” he said.
Funded by donations and grants, Blue Cross Blue Shield and some state monies, the AFMC could see its budget reduced if the population it serves is perceived as shrinking. “What happens in the long run if the community (reduces) funding? We’ll be in a quandary: less money, but the same number of patients or more,” said Bolac.
“We’re disappointed the government decided to do this,” he said. “We will continue to do what we can do.”