DOVER – Families struggling to make ends meet and people with disabilities will receive stronger and more expansive health insurance coverage in the coming years under legislation the Delaware General Assembly sent to Governor John Carney on Sunday.
Sponsored by Sen. Sarah McBride and Rep. Kerri Evelyn Harris in March, the Protect Medicaid Act will provide the single greatest reinforcement of Delaware’s Medicaid program since the Affordable Care Act by unlocking more than $175 million in new federal funding that will be used to protect, enhance and expand healthcare coverage for thousands of vulnerable Delawareans.
“As a state of neighbors, Delaware’s greatest strength has always been our willingness to work together to achieve the best outcomes for our shared communities,” said Sen. McBride, chair of the Senate Health and Social Services Committee.
“Today, we continued that proud tradition by passing my bipartisan legislation that will allow us to dramatically improve health coverage without increasing the tax burden for the average Delawarean or shifting money away from any existing programs,” she said. “While the vast majority of states have long used this tried-and-true method to strengthen their Medicaid programs, Delaware has missed out on millions of dollars in federal support until now. I want to thank my colleagues in the General Assembly for working with me to finally give Delaware access to a critical tool that will improve health outcomes for vulnerable Delawareans and protect our Medicaid program for generations to come.”
Currently, nearly 1 in 3 Delawareans receive acute and long-term health care through Medicaid, a health insurance program primarily for low-income families and Delawareans with disabilities, that is jointly funded by the state and federal governments. On average, every two dollars a state invests in Medicaid is matched with three dollars by the federal government.
Over the past 20 years, states have increasingly used financial assessments on healthcare facilities to boost the amount of state funding available for Medicaid, which in turn is used to generate additional federal match payments.
Healthcare facility assessments are currently the second largest source of funding for states’ share of Medicaid costs behind general funds. Today, 49 states have at least one facility assessment in place, including Delaware, while 34 states and Washington D.C. have three or more provider taxes.
While Delaware’s first healthcare facility assessment, signed into law in 2013, collects revenue from nursing facilities, the First State remains one of only a few states without a facility assessment on hospitals, which means Delawareans are missing out on critical Medicaid funding accessed by the vast majority of states.
Senate Bill 13 (S) would change that by phasing in a new 3.58 percent levy on the net patient revenues of acute-care and behavioral health hospitals, a charge the legislation expressly forbids the hospitals from passing on to consumers.
Pending final approval from the federal Centers for Medicare & Medicaid Services, the broad-based and uniformly imposed hospital assessment imposed by SB 13 would allow the State of Delaware to take advantage of federal Medicaid rules that allow taxed hospitals to be held harmless, meaning most of the money collected from the tax would be returned to them in lump-sum payments.
While the original bill was expected to generate more than $150 million in new Medicaid funding between both the assessment and federal matching funds, an amendment added by the House on Sunday would increase the percentage of total revenue directed to the state’s discretionary Medicaid fund by another $25 million.
The State of Delaware would be able to use that added funding to support enhancements and expansions to the state’s Medicaid program. For example, other states have used hospital assessments to increase provider rates, mitigate rate cuts or expand eligibility to more parents and children.
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