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Mississippi blues: The cost of rejecting Medicaid expansion

U.S. President Barack Obama delivers remarks on the government funding impasse at M. Luis Construction, a local small business in Rockville,
U.S. President Barack Obama delivers remarks on the government funding impasse at M. Luis Construction, a local small business in Rockville,

By Julie Steenhuysen

PASCAGOULA, Mississippi (Reuters) - As Americans across the nation begin to find out what Obamacare has in store for them, many of Mississippi's most needy will find out the answer is nothing.

That is likely the case for William and Leslie Johnson of Jackson County, since the state decided not to expand the Medicaid program for the poor under President Barack Obama's Affordable Care Act. As a result, nearly 300,000 adults there will fall through the cracks of healthcare reform.

Many are the working poor - truckers, childcare workers, mechanics - who make too much money each month to qualify for Medicaid under Mississippi's existing criteria but not quite enough to get government help buying private health insurance on an Obamacare exchange.

Nationwide, 25 states have rejected the Medicaid expansion, leaving nearly 7 million adults who would otherwise have qualified for coverage without benefits. These states, many of them Republican-led, have declined government funding for an expansion largely because they say initially generous subsidies would eventually be reduced, leaving them with an unacceptably large burden in a few years' time.

Among those states, Mississippi faces one of the most dire situations. It tops the charts for poor-health indicators: highest in poverty, second-highest in obesity, highest in diabetes and highest in pre-term births.

For the Johnsons, the struggle for health coverage has been a years-long battle. In the 16 years since her birth, their daughter, Mackenzie, has already had 10 major surgeries to treat her club foot, dislocated hips and malformed spine, all due to a rare form of spina bifida that causes the spinal cord to split. (The Johnsons also have an 11-year-old son, Tyler.)

A major operation to insert two metal rods helped to straighten a 70-degree curve in Mackenzie's spine that was collapsing her lungs and making it difficult for her to breathe. It improved her condition to the point where she no longer qualified for a special Medicaid program for disabled children living at home. She hasn't had health insurance since last June.

"At this point, we're still fighting to get her on Medicaid, but being self-employed, if I gross a certain amount of money per month, they kick her off the program," said William.

In Mississippi, a two-parent working family of four earning $10,000 to $23,500 would not be eligible for assistance either through Medicaid or the exchange because the state did not expand Medicaid, said Ed Sivak, director of the nonpartisan Mississippi Economic Policy Center.

'HEALTHCARE REFORM WAS WRITTEN FOR US'

Twenty percent of Mississippi's nearly 3 million residents are on the Medicaid rolls. Twelve percent are on Medicare, and 20 percent are uninsured, according to the Kaiser Family Foundation.

In rejecting the Medicaid expansion, Republican Governor Phil Bryant is turning down an estimated $426 million in federal funds for next year. He has argued that the administrative costs borne by the state would be too high. A report by the Mississippi Institutions of Higher Learning estimated the cost of Medicaid expansion for the state at $8.5 million in 2014, rising to $159 million in 2025 as more people enroll in the program and federal subsidies step down from 100 percent initially to 90 percent.

Mississippi is also among the states that may get the least benefit from healthcare reform in other ways. Only two health insurers are offering coverage in the state on the federally run subsidized exchange for private insurance, with premiums for a benchmark plan costing more than the national average.

It was the sole state to apply to run its own exchanges and be turned down by the federal government because of concerns Bryant would not provide enough support to launch it. Instead, the federal government is running Mississippi's exchange.

State House Minority Leader Bobby Moak, a Democrat whose coalition has fought hard for health reform in Mississippi, says Bryant's arguments are a cover for rejecting anything President Obama supports.

"We like to say that the healthcare act was written for Mississippi, but our folks had the 'good sense' to turn it down," he said.

In late June, state House Democrats staged a showdown to force a vote on Medicaid expansion, holding up reauthorization of the state's current Medicaid program, which serves one in five Mississippi residents. A last-minute legislative deal reached on June 28 saved the program but failed to expand it.

Bryant declined requests to speak to Reuters, but spokesman Mick Bullock said in an email the governor will not reconsider his position on Medicaid expansion, which he said was "bad policy" and "fiscally unsustainable."

"Governor Bryant will not put Mississippi taxpayers on the hook for something the state simply cannot afford," Bullock said.

'YOU LIVE WITH THE PAIN'

Without coverage, Mackenzie's family cannot afford to replace the wheelchair she has been using for the past six years. Nor can they afford $850 a month for physical therapy or the cost of replacing the brace she just got for her club foot. It doesn't fit properly, but "my ankle collapses when I walk without it," Mackenzie offers politely in an interview at the public library in the Gulf town of Pascagoula, a leading producer of ships for the U.S. Navy.

The town is the seat of Jackson County, where nearly 10,000 adults aged 18 to 64 will lose out on Medicaid.

Dr. Pamela Banister practices family medicine at Singing River Health System's clinic in Pascagoula. The not-for-profit hospital system offers a menu of services that all cost $49, from school physicals to treatments for sinus infections and rashes. On bigger-ticket items, the hospital offers a 40 percent discount to patients who can pay cash at the time of service.

That allows many patients to have their blood pressure checked or keep track of their diabetes, but often it's not enough to tackle bigger issues.

"I've got a man who's 62. I just know he's got to have Parkinson's. I made a stab at throwing a fairly affordable medicine at him, but it's not doing what he needs," Banister says. "I say, 'You need a specialist,' and he says, 'I can't afford it.'"

Mackenzie's father has had a nerve tumor on his foot since 2006, and he can't afford the surgery he needs.

"It's extremely painful, but the doctors want $5,000 down. The operating room at the hospital wants another $1,800 down," he said. "You live with the pain."

The Johnsons have been working with a program funded through the Affordable Care Act called Health Help Mississippi that helps families negotiate the red tape of applying for Medicaid in Mississippi, a process intentionally made more daunting by former Governor Haley Barbour, who famously charged that some individuals on the state's Medicaid rolls were driving BMWs.

Last year, William's trucking business made between $23,000 and $24,000, which should qualify Mackenzie for coverage under a Medicaid program that covers children in families who make up to 200 percent of the federal poverty level, or $47,100 for a family of four.

But they are just on the edge of qualifying for federal tax credits to help them buy insurance on the federal insurance marketplace, which would cover the whole family.

Mackenzie's mother, Leslie, a Republican, is no fan of health reform and believes people should pay their own way. But her daughter needs treatment.

"It's very hard. I need it and I don't want it," she said.

HOSPITAL PRESSURES

Mississippi's hospitals are also in a precarious position. The 2010 health reform law was designed to reduce payments to safety-net hospitals that serve a disproportionate share of poor patients. It was based on the premise that more people would soon gain coverage through Medicaid expansion.

Without Medicaid expansion, hospitals face cuts in these so-called disproportionate share payments.

Forrest General Hospital in Hattiesburg projects a $2.5 million loss for the federal government's fiscal 2014, which started October 1, due to these reimbursement cuts as well as to across-the-board federal government spending cuts.

In a July letter to Health and Human Services Secretary Kathleen Sebelius, Mississippi's Bryant asked HHS to delay disproportionate share cuts to hospitals, as it had done in delaying other portions of the law. A month later, Sebelius replied, urging Bryant to expand Medicaid in the state and "take advantage of the generous federal matching funds."

It costs the state $1.4 billion annually to run Medicaid, its second-highest expense after education. An additional $3.5 billion comes from the federal government in a 4-1 match that substantially props up Mississippi's entire healthcare system, from hospitals to nursing homes.

Roy Mitchell, executive director of the Mississippi Health Advocacy Program, says ultimately the hospital payments issue may force the governor's hand. "The governor is standing in the tracks in front of a billion-dollar train. He's going to get run over at some point."

Mississippi Insurance Commissioner Mike Chaney, a Republican who has been friends with Bryant for decades, doubts Bryant will change his mind.

"The governor has his reasons. I do not know what they are. He has told me repeatedly he just does not trust the Affordable Care Act to do what it said it would do, and he did not trust the federal government at all to do what they said they would do," Chaney said. "He's pretty well set in stone."

Chaney, who dislikes a law he calls "poorly written" and "ill conceived," nevertheless says it is "the law of the land." He worked hard to develop a state-based healthcare exchange that would have given Mississippi more control over the insurance marketplace.

But, citing the governor's fierce opposition to Obamacare, HHS denied Mississippi's petition - the only state HHS turned down.

Moak says he and fellow Democrats will bring up the Medicaid issue again in the next legislative session. "We're not going to stop talking about it," he said.

(Additional reporting by Emily LeCoz in Jackson, Mississippi; Editing by Michele Gershberg, Martin Howell and Douglas Royalty)

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