Report: Delayed Obamacare Replacement Could Jeopardize Safety-Net Hospitals

Hospital group warns of financial crisis from stand-alone repeal

If Congress fails to replace the Patient Protection and Affordable Care Act (PPACA) with a comparable plan, coverage losses and scheduled cuts to hospital funding would total up to $40.5 billion nationally for hospitals that fill a safety-net role, according to an analysis from the national hospital group America’s Essential Hospitals (AEH). That number represents coverage lost from a PPACA repeal and cuts to Medicaid disproportionate share hospital (DSH) funding and Medicare from 2018 through 2026.

Even if congressional opponents of the PPACA followed their December 2015 repeal blueprint—a plan that would have rescinded the Medicaid DSH cuts—essential hospitals still would face a $16.8 billion loss over the same period, the association said in a new policy brief.

“These numbers really show what’s at stake for the patients who depend on the doors being open at essential hospitals,” said Bruce Siegel, MD, MPH, president and CEO of AEH. “These are unsustainable losses that would jeopardize vital services and access to care in communities across the country.”

AEH also calculated that other funding shortfalls, such as below-cost Medicaid payments, and losses from a stand-alone repeal of the PPACA would translate to $54.2 billion in uncompensated care costs for its members over 10 years, starting in 2019.

“Our members already face heavy financial challenges,” Siegel said, noting that the association’s members operate, on average, with a zero margin and provide nearly 20% of the nation’s total uncompensated care. “Neither they nor their patients can afford anything less than a full, comprehensive replacement [of the PPACA] at the same time as repeal.”

AEH recently released principles for health care reform in light of the “repeal and replace” debate. The association urged policymakers to pair a repeal of the PPACA with a simultaneous replacement plan. Any action less than an immediate replacement also must reverse the PPACA’s cuts to hospital payments. Whichever direction policymakers take, they must ensure that patients can maintain coverage during the transition to a replacement plan, the association said.

Source: America’s Essential Hospitals; February 9, 2017.