Private option Medicaid could hurt clinics

Community clinics--considered a crucial linchpin of healthcare delivery under the Affordable Care Act--may face serious financial harm due to "private option" Medicaid expansions, Kaiser Health News reported.

The private option, which allows states to pay private payers to insure the expanded Medicaid population, is under consideration in states such as Arkansas, Utah, Iowa, Ohio and New Hampshire. Although such options may make Medicaid expansion more politically palatable in red states, they also cut off a source of funding for the clinics, as private insurers pay the clinics far less than the Medicaid program does directly.

The U.S. Department of Health and Human Services has said it will limit the number of states that can expand Medicaid under the private option, noting that the states will have to obtain a waiver and prove to the federal government that such a path will not cost more than a traditional Medicaid expansion.

"Medicaid is our single largest payer and if that payment rate is destabilized, then, we will start to see health centers close due to financial viability and solvency issues," Daniel Hawkins, senior vice president of the National Association of Community Health Centers, told Kaiser Health News.

Arkansas officials say the cuts to the clinics mirror those to hospitals. The government plans to cut disproportionate share hospital payments because it expects hospitals will treat fewer uninsured patients under the Affordable Care Act. However, the federal government has already cut payment to the clinics in recent years.

But there is some action as a result of the clinic community push back. Gov. Tom Corbett's (R-Penn.) proposal to expand Medicaid via a private option next year originally allowed insurers to pay the clinics at commercial rates, but at the last minute he changed it to Medicaid rates. And insurers in Iowa will also pay the clinics at the Medicaid rate, according to Kaiser Health News.

To learn more:
- read the Kaiser Health News article

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