If the states that have filed suit against the Obama health reform law are successful in invalidating the law’s expansion of the Medicaid program, it will mean billions in lost revenue for the health companies that do business in those states, a Bloomberg Government study by analyst Matt Barry has found.
Medicaid providers — including managed care plans, nursing homes and inpatient hospitals — doing business in the states would forgo $207 billion in federal and state Medicaid revenue for the period 2014 to 2018 if the law is invalidated, the study found. Managed-care plans would miss out on $46.3 billion in those five years; nursing homes $29.3 billion; and inpatient hospitals $28.7 billion. The study includes all 28 states that have sued, except Oklahoma, which filed later than the rest.
Medicaid providers in Texas stand to lose out on the most incremental revenue — $45.9 billion — if the law is struck down, followed by: Florida, $17.7 billion; Pennsylvania, $15.1 billion; Ohio, $15.0 billion; and Georgia, $12.7 billion.
If the Medicaid expansion is overturned by the court, health companies will need to reassess their investment decisions, including mergers and acquisitions, the study notes. Business decisions already made “may be viewed as unnecessary and unprofitable,” it found.