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Could Medicaid Expansion Have Saved AMC From Closing?

Gov. Brian Kemp says the medical assistance program would do more harm, but others argue it’s a lifesaver.

The pending closure of Atlanta Medical Center on Nov. 1 has brought heightened attention to expanding Medicaid eligibility. (David Goldman/Associated Press)

In a letter sent Tuesday to Georgia’s Democratic congressional delegation, Gov. Brian Kemp said that Medicaid expansion would not have stopped Wellstar’s decision to close Atlanta Medical Center. Kemp maintains Medicaid expansion instead may have been detrimental to AMC’s longevity. 

“It would hurt both patients and providers because, as you know, healthcare providers actually lose money when they serve Medicaid patients,” Kemp wrote in the letter shared with Capital B Atlanta. 

Kemp’s message is a response to the state’s congressional Democrats, who in September urged him to expand Medicaid. Georgia is one of 12 states that has not expanded Medicaid under the Affordable Care Act, which would allow those whose income is at or below 138% of the federal poverty line to qualify. 

AMC’s imminent closure on Nov. 1, a week before Election Day, is now the latest political talking point when it comes to Medicaid expansion. Physicians and health care advocates argue that if Medicaid was expanded, more patients who are currently uninsured might be able to pay for their medical care, which would help Wellstar’s bottom line. Kemp and others maintain that Medicaid expansion is not the answer.

Here’s what’s to know.

What is Medicaid?

Medicaid is a program designed to assist patients who can’t afford health care in paying their medical expenses. Medicaid is administered by the Georgia Department of Community Health and pulls funding from state and federal tax dollars.

What exactly is the state’s Medicaid coverage gap?

Increasing Medicaid coverage for states means expanding income eligibility to patients at or below 138% of the federal poverty level. In general, for Georgia, eligibility currently extends to patients at or below 133%. Rates can vary depending on family size and Medicaid program.

What’s Kemp saying? 

Kemp said expanding Medicaid eligibility to those who are at 138% of the federal poverty level would likely cause more problems than solutions for AMC. 

“If Georgia fully expanded Medicaid to 138% of the FPL (Federal Poverty Level), more than 200,000 Georgians with private insurance would lose access to federal tax subsidies that they use to buy coverage and instead would be forced into Medicaid coverage,” Kemp wrote. 

Kemp pointed to a smaller reimbursement percentage for hospitals from Medicaid at 85.6% of the cost, as opposed to up to 140% reimbursement for patients with private insurance. “A reduction in the number of Georgians on private insurance is not a long-term strategy for addressing facility closures across our state,” he said.

The governor defended his support for a limited Medicaid expansion in 2020, known as the Georgia Pathways plan, where applicants were required to work at least 80 hours monthly to qualify. The Biden administration rejected the move, but a federal judge said Georgia could move forward with the policy after Kemp’s administration sued. 

“Inexplicably … the Biden administration illegally rescinded core elements of the program, causing a significant delay in implementation,” Kemp said. “Through this delay, President Biden wrongly deprived as many as 345,000 Georgians of innovative healthcare coverage for over a year for purely political reasons.” 

Learn more: Read Gov. Brian Kemp’s letter

What’s Stacey Abrams saying? 

Democratic gubernatorial nominee Stacey Abrams told Capital B Atlanta, “Medicaid expansion is how we tackle the social determinants of health in the state of Georgia, especially for Black people.”

Abrams blames Kemp’s refusal to expand Medicaid for AMC’s closure. She pointed out that residents qualify for Medicaid if they make $6,600 or less. However, qualifying patients also have to be either disabled, a senior citizen, or a parent with a dependent child. 

“If anyone else, even if you make $6,600, you’re considered too wealthy for health insurance,” Abrams said. “That disproportionately affects the Black community because we have 1.4 million people in the state without health insurance, and without that health insurance they can’t get help unless there’s a crisis.”

Abrams also cited the AMC closure and how it affects Grady Memorial Hospital as examples of why expansion is needed.

“When we lose AMC, we are losing not only a medical facility, hundreds of people are going to lose their jobs,” she said. “Thousands of people are going to watch their lives change dramatically, because they don’t have anywhere else to go to get help except for Grady, and Grady is already over capacity and cannot accept them.”

What are doctors saying? 

Physicians and other health care workers say Medicaid expansion would bring more insured patients to hospitals, increasing their chances to stay open. 

Dr. Janice Bonsu, an orthopedic surgery resident at Emory University, pointed out that people who come into the hospital without Medicaid are often sicker than insured patients, which adds increased costs to their care. This leads to a ripple effect of people without insurance unable to pay their bills, and hospitals failing to keep up with their charity funds. 

“There’s gonna come a point where it’s just stupid not to expand, it’s just reckless not to expand,” Bonsu said. “I think we’re approaching it when we’re shutting down hospitals that are serving low-income populations.”

Bonsu works in Grady’s ER and joined other physicians in metro Atlanta who addressed reporters gathered outside the hospital in late September, calling for Medicaid expansion. The group warned that closing AMC would have deadly consequences for their patients.

What is Wellstar saying?

Wellstar told Capital B Atlanta that Medicaid expansion may have alleviated some of the financial issues at AMC, but overall the financial burden was too great to conquer. 

“AMC has sustained significant operating losses, including $107 million over the last 12 months alone, and has faced a unique set of challenges related to low utilization, aging infrastructure and operating losses, and lack of county funding for care provided to under and uninsured patients, ultimately resulting in this difficult decision,” a spokesperson for Wellstar said. “The pandemic and the intense financial headwinds straining all healthcare organizations right now have only made matters worse at AMC.”

Earlier this year, Wellstar also closed Atlanta Medical Center South in East Point, which served the majority Black Tri-Cities of Hapeville, College Park, and East Point. East Point’s uninsured population is above the national average, according to the U.S. Census Bureau. 

What are Atlanta city and county leaders saying?

District 2 council member Amir Farokhi, who represents the area where AMC is located, didn’t mince his words when he released a statement calling for the state to stop and consider low-income residents in Old Fourth Ward when deciding on Medicaid expansion.

“Regrettably, it must be said that this was all entirely avoidable,” Farokhi said. “Our state leaders are falling down on the job and the catastrophic consequences are here for all to see.”

Council President Doug Shipman has said he wonders what factors, like Medicaid expansion, could have helped keep AMC open. 

“You really have to look at this at a state level and say, ‘OK, what would Medicaid expansion potentially do?’” he said in a previous interview with Capital B Atlanta. “But also how do we think about supporting our hospitals? How do we think about beds? Where do we need them?” 

Wellstar told Capital B Atlanta that part of its reasoning for closing was a lack of county funding. In recent weeks, Fulton and DeKalb counties have proposed additional funding to Grady. 

While Fulton Commissioner Robb Pitts was initially stunned by the closure of AMC, he says he feels confident that other hospitals can fill in the gap in the meantime. 

“We have a plan in place that involves [expanding Grady],” he told reporters last month, shortly after Kemp announced that Grady would add 200 beds to its operation. “It involves Piedmont and Emory and some of the level two hospitals around, so I’m confident short term that we’re gonna be OK.”