There’s a Code Blue-emergency in Kentucky! Hospitals are struggling financially because of the health system changes caused by Obamacare. Hospitals have been forced to lay off workers and reduce hospital care jeopardizing the quality of care.
A new report highlights the dire situation.
Kentucky, it should be noted, was one of about a dozen states that created relatively glitch-free online state exchanges for the Affordable Care Act. Kentucky also expanded Medicaid eligibility growing the number of people in Kentucky with healthcare to more than 400,000 people – making it the only state in the Southeast to both expand Medicaid coverage and create its own state exchange. Of the 413,000 additional Kentuckians with coverage three quarters of them are enrolled in Medicaid while only about 83,000 have purchased private coverage through the state marketplace.
So Kentucky should be the ObamaCare poster state, right?
The problem is that those innovations came at a steep cost—hospitals are just now seeing how monumental those costs are.
Payment cuts to Kentucky hospitals are projected to reach nearly $7 billion through 2024. Medicaid and Medicare are bad deals for hospitals as they both pay hospitals less than the actual cost of delivering care, 82% and 86%, respectively. There are also penalties for readmitting patients within 30 days of release and cuts in payments for hospitals to help offset the cost of treating patients who are uninsured or are covered by Medicaid.
So while more Kentucky patients have coverage under ObamaCare, government reimbursements and a small pool of private payers together aren’t enough to cover the new costs; this leaves hospitals in the red. The bottom line: hospitals will have a net loss of $1 billion from 2014 to 2020. That’s no chump change.
This will definitely be a big issue in upcoming gubernatorial election, as Breitbart notes:
The future of KYNECT should be one of the key issues disputed in this November’s gubernatorial election between Republican nominee Matt Bevin and Democratic nominee, current Attorney General Jack Conway.
Bevin wants to shut down KYNECT. Conway wants to keep it.
“The Medicaid expansion enacted under Obamacare is unaffordable for the taxpayers of Kentucky and should be repealed. This program is projected to cost Kentucky in excess of $150 million per year after 2016. … I would facilitate the transition of enrollees onto the federal health care exchange during the open enrollment period in 2016 and then dismantle the KYNect state exchange,” Republican Bevin told the Louisville Courier-Journal last month.
Democrat Conway said fellow Democrat and incumbent Governor Beshear’s KYNECT should stay in place, though he doesn’t rule out changes to it.
The implementation of Obamacare and KYNECT in Kentucky is a case study in the unintended consequences of “well intentioned” governmental programs.
“The intent of the ACA was that the cuts would be offset, for the most part, by health care payments from people who had previously been uninsured. The original estimates by the Congressional Budget Office projected that half of the newly insured would be covered by private insurance and the other half by expanded Medicaid,” the report states.
“That has not been the case in Kentucky, however,” it notes:
Because Kentucky is a low income state, ranking 46th in per-capita income, the actual enrollment statistics reveal that 75% of the newly insured in the Commonwealth are covered by Medicaid, and only 25% have bought a private health plan. An estimated 11.9% of Kentuckians (approximately 521,000 people) remain uninsured.15 This is important because private health insurance pays health providers at a much higher rate than the Kentucky Medicaid program, which pays hospitals approximately 82% of what it actually costs to care for Medicaid patients. The difference between Medicaid payments and the actual cost is known as the “Medicaid shortfall,” which was estimated to be more than $300 million in Kentucky in 2013.16 With the addition of more than 300,000 new Medicaid patients under the expansion (bringing the total number of Kentuckians on Medicaid to more than 1.1 million) this shortfall is expected to grow by another $135 million per year.
Kentucky’s “successful” ObamaCare adoption and rollout only mask the deeper problems with ObamaCare. Even if the policies were well-intentioned, the intended benefits have been eclipsed by the dire consequences. Such is often the case with central planning.