Changes to Medicaid coinciding with the end of the pandemic health emergency could exacerbate financial and operational stressors already burdening hospitals across Pennsylvania.
Medicaid enrollment grew by 30% in Pennsylvania during the pandemic, climbing to about 3.6 million members. Continuous enrollment stalled the Department of Human Services from performing its eligibility determination work during the pandemic and members benefited from temporary automatic enrollment.
Both policies ended April 1 and the redetermination process is now underway.
An estimated 617,000 members are at risk of losing health care coverage once eligibility is reassessed while another 598,000 hadn’t completed membership renewal as of January, Human Services officials told WESA 90.5.
The U.S. Department of Health and Human Services estimates that nationally, as many as 15 million Medicaid recipients and Children’s Health Insurance Program enrollees could lose coverage.
“Hospitals are facing this perfect storm. They’re in a precarious financial situation for a number of reasons. One of the most important is the workforce shortage and the impact on the financial viability of hospitals,” said Jeffrey Bechtel, senior vice president of health economics and policy, The Hospital and Healthsystem Association of Pennsylvania (HAP).
“The unwinding of Medicaid,” Bechtel said, “that’s just going to be another challenge hospitals will have to face during these difficult times.”
The Shapiro Administration has worked to contact enrollees about their potential risks and to ensure that they reapply to maintain benefits. Visit www.dhs.pa.gov/COMPASS, download the myCOMPASS PA mobile app, call 1-877-395-8930 or for CHIP, 1-800-986-KIDS (5437).
Steered to Pennie
Those losing coverage will be steered to the state’s health care marketplace, Pennie, or other programs. The administration pledges that no one will lose coverage without the opportunity to renew coverage.
Private health plans like Geisinger and Highmark are efforting such contacts among their own members in jeopardy.
The anticipated surge in uninsured Pennsylvanians is expected to tax hospital resources and safety net providers like free clinics and federally qualified health centers.
Hospitals and health care providers have already been beset by staffing shortages causing labor costs to swiftly balloon. And, they’re hardly immune to supply chain disruptions, high-interest rates and inflated costs.
Vacancy rates in Pennsylvania hospitals for registered nurses, nursing support staff, respiratory therapists, nurse practitioners and medical assistants hovered above 30% as recently as November, according to the latest data available from HAP.
“What we fear is that people will not know what they have to do, and that a significant number of people are going to lose their coverage as a result,” said Robert Dewar, chief revenue officer at Geisinger.
Dewar supports Medicaid expansion, not contraction.
“I feel like everybody loses in this. Patients lose; a significant number of patients. Hospitals lose. I don’t think it’s gong to help our taxes. It’s not going to lead to less cost for individual taxpayers. It’s just not good policy. I just don’t see any winners in this,” Dewar said.
A report by the Pennsylvania Health Care Cost Containment Council released last year found that in Pennsylvania, rising expenses and lost revenue due to the pandemic totaled $678.3 million through the first half of 2022 and nearly $7.9 billion to that point since the pandemic’s start.
The healthcare management consulting firm Kaufman Hall found that more than half of all U.S. hospitals ended 2022 at a fiscal loss, marking it as the worst financial year since the pandemic’s start.
UPMC reported a net loss of $916 million last year. Geisinger’s reported loss totaled $842 million.
That year’s first half proved especially bad though steady improvement into the late winter months signaled a potential turnaround in 2023. While operating margins were up 16% in February year over year, profits fell 6% month over month compared to January, Kaufman Hall stated in a report released last month.
All told, hospital profits were down 32% nationally year-to-date in February compared to February 2020, the March report states.
Bechtel estimates Medicaid enrollees account for about 15% of hospital revenues. Combined with Medicare, the share leaps to 50%. Reimbursement falls below cost, he said.
Those revenues, even below cost, disappear for those members who become uninsured. The anticipation is that some will trend toward seeking costlier care at emergency departments for ailments best treated by primary care physicians or avoided altogether through preventative care afforded by health insurance.
“Having health insurance does not automatically equal access to care but it sure helps,” said Lisa Davis, director of the Pennsylvania Office of Rural Health and outreach associate professor with Penn State, a reference to rural health care deserts across the commonwealth.
According to Davis, rural hospitals are especially at risk of accumulating bad debt through uncompensated care. Comparatively, she said urban hospitals tend to have higher rates of commercially insured patients.
Patients losing health insurance risk putting off preventative care and may end up more sickly, Davis said. She said it likely will result in the safety net system taking on more clients.
“I think that’s probably the biggest impact, the increase of uncompensated care,” Davis said. “It really does put the hospital at financial risk.”
Staff at Community Health Centers including Federally Qualified Health Centers anticipate a surge of people seeking medical care once their insurance is lost as well as assistance in finding Medicaid alternatives, according to Tia N. Whitaker, statewide director of outreach and enrollment, Pennsylvania Association of Community Health Centers.
The network of health centers treats one million patients across three million visits annually, Whitaker said. It has 132 employees tasked with helping find insurance through Pennie.
“We fully anticipate in the next few months that requests for assistance will be flowing in because folks will be terminated,” Whitaker said.
Whitaker expressed concern that the Pennsylvania Department of Human Services staffing complement may not be enough to meet the demand to process applications and determine eligibility for Medicaid.
To seek help through the Pennsylvania Association of Community Health Centers, contact 717-761-6443, 1-866-944-2273 or email@example.com.