Campaign money may be driving Medicaid issue

By TIM KALICH,

Consider the following scenario.

An outside entity approaches Mississippi and says that it wants to invest a billion dollars a year in the state indefinitely and create thousands of new jobs. The only catch is that the state has to put up $100 million a year, too.

The governor and other state leaders balk because they are not sure about coming up with their part, even though a respected national economist has shown that the business activity generated by that outside entity’s investment will produce at least an extra $100 million in new tax revenue, and possibly double that.

To convince the governor further, the companies that expect to do business with this billion-dollar-a-year investor offer to kick in the $100 million match by drawing from their own coffers and charging a modest monthly fee to their customers.

The governor still thumbs his nose at the offer.

What would be the reaction? A movement to have the governor declared mentally incompetent and removed from office?

Most likely.

Yet, something like that scenario is taking place in Mississippi with its stupendously irrational decision to not expand Medicaid to cover about 300,000 of the working poor.

Gov. Phil Bryant wouldn’t do it during his two terms in office. And his supposedly ordained Republican successor, Tate Reeves, has pledged that he won’t do it either.

Meanwhile, dozens of rural hospitals in the state are tanking, in part, because they don’t have enough paying patients to offset those whom they are legally obliged to treat but who can’t pay.

Had the Affordable Care Act — with its sweet offer to bankroll nearly the entire cost of insuring most of the uninsured — been pushed by a Republican president instead of Barack Obama, Mississippi would have been first in line to sign up for expanding Medicaid and the federally funded economic bonanza that comes with it. But because of the political mileage to be made with the GOP’s ultraconservative base by opposing anything associated with Obama, Mississippi has not even gotten in line yet, letting the money go instead to 36 other states, including two of its neighbors.

The Mississippi Hospital Association, seeing that a straightforward Medicaid expansion was getting nowhere with the state’s GOP leadership, has offered what it expected would be a more palatable alternative, calling it “Medicaid reform” instead of “Medicaid expansion.”

Under the MHA plan, the state’s 10 percent match to get the extra federal money would be covered in full by splitting the cost between the newly insured, who would pay a $20-per-month premium for the coverage, and the hospitals themselves.

The hospital association has provided an analysis, prepared by a former Baylor economics professor, Ray Perryman, who ran the numbers for Mississippi when Republicans were pushing through tort reform a decade and a half ago. Perryman estimates that if Mississippi were to adopt the MHA plan, it would produce a $36 billion economic benefit over an 11-year period from the increase in health-care spending and a healthier population; create or sustain the equivalent of more than 36,000 jobs annually; and add $200 million a year to the state treasury.

Meanwhile, uncompensated care, which costs the state’s hospitals more than $600 million a year, would drop by 40 percent, and patients with private insurance, who currently subsidize those who don’t have insurance, would see a $50 million a year decrease in premiums.

The two other GOP candidates who ran in the primary election for governor, Bill Waller Jr. and Robert Foster, like the MHA plan. So does the Democratic candidate, Jim Hood.

Only Tate Reeves is not impressed, bragging this past week at the Neshoba County Fair that he is the “only candidate running for governor that opposes Obamacare expansion in Mississippi.”

Wonder why?

Maybe it’s because the MHA plan would give the state’s hospitals their first slice of the Medicaid managed care business, competition that one of Reeves’ biggest contributors opposes.

Magnolia Health has been raking in more than $100 million a year from the state’s partial privatization of its Medicaid program, which began almost a decade ago. In 2017, the state’s hospitals, with the Legislature’s blessing, created a nonprofit managed care company, Mississippi True, to provide the same service at potentially less cost than Magnolia Health. The Medicaid Division, however, shunned Mississippi True, instead awarding the current three-year contract to Magnolia and two other publicly traded managed care companies. That decision remains under review by the state Supreme Court.

Magnolia is betting on Reeves’ staying in its corner. From 2016 to 2018, its parent company or subsidiaries put $160,000 into his campaign fund, contributing significantly to Reeves’ huge money advantage in the governor’s race.

Will it be money well spent? We’ll have to see the elections through for that answer.

Contact Tim Kalich at 581-7243 or tkalich@gwcommonwealth.com.

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