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Medicaid expansion states better off financially, former CMS director Cindy Mann says

Hospitals report substantial drops in uncompensated care, rise in patients covered, says former director Cindy Mann.

Susan Morse, Managing Editor

Hospitals in Medicaid expansion states fare better financially than those in states that have not adopted the Affordable Care Act initiative, according to an attorney who formerly directed the Medicaid program for the Centers for Medicare and Medicaid Services.

"We're beyond projections," said Attorney Cindy Mann. "If you look at what's gone on, it's been a significant help to their bottom line. Hospitals have reported drops in uncompensated care and a rise in the number of patients covered - as much as 35 percent drop in uncompensated care."

[Also: Michigan study latest to suggest Medicaid expansion led to fewer uninsured hospital stays]

Mann, a partner at Manatt, Phelps & Phillips in Washington, D.C., served as deputy administrator and director of the Center for Medicaid and CHIP Services for close to six years, between 2009 and 2015.

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"To providers there's more business. Despite an inadequacy about Medicaid payment rates, it can be far superior than no payment," she said. "In terms of payers, plans are eager to jump into the Medicaid marketplace."

To date, 31 states and the District of Columbia have expanded Medicaid, leaving 18 states without the Affordable Care Act initiative to cover low income individuals and families.

Louisiana this month become the latest and the first state in the Deep South to expand Medicaid.

[Also: Louisiana expands Medicaid under Democratic Gov. John Bel Edwards]

South Dakota may soon follow, as that state, along with Virginia and Wyoming, have included Medicaid expansion in their fiscal year 2017 budget proposals, according to The Advisory Board.

South Dakota is actively engaged in discussions, while in Virginia there is resistance to the state budget proposal, Mann said.

One hold up may be election year politics. While President Obama remains in office, Obamacare remains politically divisive.

After the November 8 election, that may change and more states may expand coverage, according to Mann.

[Also: Obama seeks to offer new incentive for states to expand Medicaid]

"Some states may see more activity in 2017 than in 2016," she said.
Republican Georgia State Senator Fran Millar said he believes "it's inevitable" that the state will expand Medicaid, since access to care is "a big problem," according to The Advisory Board.
Meanwhile, newly-elected Republican Gov. Matt Bevin in Kentucky, who campaigned on a pledge to dismantle the state's Medicare expansion program called Kynect, has since amended his views to allow for section waivers.

"I think it's a very significant change when he was running on a roll-back," Mann said. "It clearly has a positive impact on beneficiaries. The economics of expansion are compelling. I think players in Kentucky did not want to see disappear."

In Arkansas, GOP Gov. Asa Hutchinson came to the same conclusion, Mann said.

"It was working well in many aspects," she said.

To sweeten the deal for opponents who don't want their state to foot the 10 percent cost of expansion in year three, President Obama has proposed extending 100 percent federal funding for Medicaid expansion for three years.

The proposal, which is in his budget to be released on Feb. 9, would extend the government's 100 percent funding share of Medicaid expansion costs for the first three years of a state's expansion, regardless of when the expansion begins. The plan would apply to states that have not yet expanded Medicaid, as well as those that expanded the program after January 2014.

For the first time, spending on Medicaid expansion and other health measures has surpassed Social Security spending, according to the Budget and Economic Outlook released this month by the Congressional Budget Office.

Spending for Social Security totaled $882 billion in 2015, compared to $936 billion spent on Medicare, Medicaid, the Children's Health Insurance Program and subsidies offered through health insurance exchanges and related spending, the report said.

The sharp increase over the past two years occurred mainly because of new enrollees added by states that adopted the optional expansion of coverage authorized by the ACA, the Congressional Budget Office said.

Twitter: @SusanJMorse