Lawmakers turn away billions in federal funds as they pour state funds into health care

by Bobby Harrison, Mississippi Today
April 2, 2023

As the Mississippi Senate recently was considering and passing legislation to provide $103 million for a grant program for the state’s beleaguered hospitals, Sen. Angela Hill, R-Picayune, asked a pertinent question.

She wanted to know if the $103 million would provide real help for the hospitals — many of which experts say are in danger of closing.

“Just looking at the totals, it looks to me like these individual hospitals will burn through this pretty fast,” she said during debate of the bill on the Senate floor. “So, I guess my question is was there any thought, if an aggregative amount of $103 million that has been split up by what looks like 100 hospitals or more, could that have had a greater impact in any other shape or form?”

Hill, a fiscal conservative, was looking for ways to get more bang for the buck. If only there were a way to do so.

Senate Medicaid Chair Kevin Blackwell, R-Southaven confessed to Hill that, “We didn’t look at any other funding mechanism.”

But both Hill and Blackwell had been told about other options — less than 24 hours earlier on the Senate floor, in fact.

“The most important thing Mississippi can do to help our hospitals is expand Medicaid under the Affordable Care Act,” said Sen. David Blount, D-Jackson. “The choice you are making with this legislation is you put $100 million in the fund and get $100 million, or you put $100 million in a fund allowing Medicaid expansion and you get $1 billion.”

Projections are that it would cost the state about $100 million annually to expand Medicaid to cover primarily the working poor. According to projections, that $100 million would be about the state match needed to pull down more than $1 billion in federal funds annually that Blount referenced.

And based on projections made by the University Research Center, Medicaid expansion would result in much more than $1 billion annually to the state for the first two years of Medicaid expansion. Because of incentives offered by the federal government under COVID-19 relief legislation, it is estimated the state would receive $1.61 billion the first year and $1.64 billion the second year of expansion. After the first two years of expansion, the incentives would go away, but the state still would be receiving more than $1 billion annually in federal funds.

READ MORE: Mississippi leaving more than $1 billion per year on table by rejecting Medicaid expansion

The theory is that the $1 billion would help health care providers, especially hospitals, because they would be treating fewer people with no insurance and no ability to pay.

Hill was not asking her question because she is touting Medicaid expansion. As a conservative Republican, she has long voiced her opposition to Medicaid expansion. Many conservative Republicans, including Gov. Tate Reeves and Speaker Philip Gunn, say they oppose the big government expansion.

And Blackwell could rightfully point out the $103 million being directed to the hospitals is from federal COVID-19 legislation and would not be available in the coming years to provide the required annual state match to expand Medicaid.

But the day before Hill asked her question, Sen. Hob Bryan, D-Amory, told members that Medicaid expansion would not cost the state anything.

Because of the multiplier effect of the federal fund and because of other factors, “the state treasury would make money. In theory there is a state match, but in practice there is not a match at all. In practice, the state treasury is doing without money because of the prohibition on Medicaid expansion.”

Various studies back up Bryan’s bold claim.

The 2021 University Research Center study, for instance, found that the 10% matching costs the state must provide if it expanded Medicaid would be more than covered by health care-related savings to the state and new tax revenue generated.

More and more states are reaching the conclusion that Medicaid expansion makes money for them. Forty states have expanded Medicaid, leaving Mississippi behind 80% of the country.

First it was just so-called blue or Democratic states expanding Medicaid under the Affordable Care Act. But in more recent years, red or Republican states have followed suit. States like Montana, Utah, North Dakota and South Dakota have expanded Medicaid. Those that have not, for the most part, are located across the Southeast.

But the number of Southern states not expanding Medicaid also is dwindling. Just in recent days, a Republican-controlled Legislature in North Carolina sent to Democratic Gov. Roy Cooper a bill he signed into law expanding Medicaid.

But instead of expanding Medicaid, Mississippi legislators continue to provide state funds to help hospitals and other health care providers one dollar at a time instead of using that dollar to get at least $9 in federal funds.

“This hospital grant program is putting a Band-Aid on a situation in this state that requires surgery,” said Sen. Derrick Simmons, D-Greenville.

READ MORE: The death of rural hospitals could leave Mississippians ‘sick, sick, sick’

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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