It wouldn’t take much to put the Mississippi Legislature off the thought of expanding Medicaid.
In the 11 years since expansion became an option, the Republican supermajorities in the Legislature have only given it serious consideration one time, and that was in 2024. The House and Senate, however, could not come to an agreement on how many people should be covered by the expansion and whether they should have to prove they were working.
The decision to leave some 200,000 Mississippians uninsured has cost the state about a billion dollars a year in federal funding, while creating a lot of stress for these individuals and the hospital emergency rooms that are left to treat them with little to no compensation.
It’s difficult, though, to blame the Legislature’s hesitation on Medicaid expansion this year, given the mixed signals coming from the Trump administration and the Republican-controlled Congress about possible cuts to the state-federal health insurance program for the poor and disabled.
Donald Trump has said that the nation’s three major entitlement programs — Social Security, Medicare and Medicaid — won’t be “touched” during his second tenure in the White House, but it’s impossible to see how they won’t be without exploding the deficit to pay for the tax reductions that he and Republicans in Congress want to continue and expand on.
Social Security and Medicare have historically been considered untouchable because the main beneficiaries of those two programs — people in their 60s and above — are growing in number, and they turn out on Election Day.
Medicaid’s primary beneficiaries — poor children, single mothers, nursing home residents — don’t have that same political clout. So, if Congress were to reduce the 90% federal match it has been providing to states for the expanded Medicaid population, the main people screaming would be the governors and legislators in the 40 states that expanded their program because of the sweet deal they previously were offered.
Years ago, when Mississippi opponents to Medicaid expansion said they feared that Washington might later change the terms of its offer and push more of the cost onto the states, it sounded like a fabricated excuse. Not so much now.
As a result, Mississippi hospitals, which have been lobbying for Medicaid expansion for years, are unlikely to see it happen in 2025.
But there is another part of the Medicaid program that the state’s hospitals should be worrying about even more — the prospect that recently enhanced supplement payments could be significantly scaled back or even discontinued.
When Mississippi’s hospital crisis had reached its worst point in 2023, and Medicaid expansion had become a major issue in the gubernatorial race between Tate Reeves (an expansion opponent) and Brandon Presley (an expansion proponent), Reeves was able to deflect the criticism — and help hospitals tremendously — by instead pursuing a waiver from the federal government to change the formula by which the Medicaid supplements are calculated. The change produced a net gain of $750 million annually to the state’s hospitals, providing a lifeline, especially in rural areas, for hospitals that were at risk of closing. Greenwood Leflore Hospital alone has been netting about $10 million annually from the enhanced supplement payments.
Either regulatory changes or congressional action could put that money at risk, and thus push the Greenwood hospital back toward insolvency.
The enhanced supplements presently have to be authorized annually, and they come up for renewal at the end of June. The Centers for Medicare and Medicaid Services, about to be under the direction of Dr. Mehmet Oz, might not authorize the higher supplement payments in keeping with Trump’s crusade to shrink the federal government.
There’s also talk in Congress of reducing how much hospitals can put up to draw down federal dollars, according to Richard Roberson, the president and CEO of the Mississippi Hospital Association.
The state’s share of the extra Medicaid supplement money is being covered through hospital taxes, which have pushed the hospitals almost to the current maximum that they can contribute. If that ceiling were to be lowered by as much as half, as is presently being discussed, either the state would have to make up the difference or the supplement payments would have to be reduced.
The uncertainty from Washington — and the erratic nature of the Trump administration — has left hospitals and others in health care struggling to come up with a strategy. It’s gotten nearly impossible to predict what policies might be coming. As a result, hospitals and other providers don’t know in which direction to pivot, Roberson said.
“No one want to make a left turn when you should have made a right turn.”
One idea the hospital association has come up with is for Mississippi to ask CMS this time for a three-year renewal on the more generous formula for calculating the Medicaid supplements. That would provide the hospitals with some revenue predictability for most of the rest of Trump’s term.
Other than that, it sounds as if Mississippi’s hospitals and its lawmakers are going to sit back, watch closely what Washington does, and then react. They don’t really have much other choice.
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
