Hospitals to tea party governors: 'We need Medicaid expansion'

There's a key constituency in the health care industry that is becoming increasingly concerned by Republican governors' grandstanding over Medicaid expansion. The hospitals that are charged with treating the uninsured and the poor for free have been counting on the expansion of Medicaid to help clear their books of unpaid debts.

The American Hospital Association and other national industry groups endorsed the health care reform law, calculating that more insured people would make up for $155 billion in lower Medicare payments over a decade.

A smaller Medicaid expansion would be bad news for hospitals, especially in states like Florida and Texas with large numbers of uninsured people, according to Sheryl Skolnick, a health care equities analyst at CRT Capital Group in Stamford, Conn. "That risk is real and meaningful: the hospitals may end up paying for the poorest and sickest of today's uninsured anyway AND see cuts in Medicare and Medicaid on top of that," she wrote in a note to clients Friday. [...]

Getting the Medicaid expansion in place has already become the "number one priority" for the Texas Hospital Association, said John Hawkins, the senior vice president for advocacy and public policy at the organization. "It's the kind of thing that hits our members right on the margin when they're trying to digest other payment cuts," he said.

Hospitals, and hospital executives, tend to be influential in their communities and in state and local politics. Their lobbying could be the best bet for making grandstanding Republican governors back down on accepting the Medicaid expansion. But don't count on it. The ideological zeal and delusion of achieving future greatness on the national stage of the teabagger governors like Nikki Haley, Rick Scott, Bobby Jindhal and Scott Walker shouldn't be discounted.