Killing the Affordable Care Act public health insurance exchange system and its premium subsidy program might cost U.S. hospitals more revenue than killing the ACA Medicaid expansion program.
A team of analysts hired by the Chicago-based American Hospital Association and the Washington-based Federation of American Hospitals includes predictions supporting that possibility in a look at how full or partial ACA repeal might affect hospitals.
Hospitals commissioned the analysis in an effort to persuade Donald Trump and members of Congress to think carefully about the possible effects on hospitals when they set about changing health system rules.
The United States now spends about $1 trillion on hospital services per year, according to National Health Expenditure data from the Centers for Medicare & Medicaid Services.
The hospital group analysts contend that the ACA coverage expansion elimination provisions in one repeal bill they reviewed, H.R. 3762, could have cost hospitals about $13 billion in 2018, and about $166 billion over the 10-year period from 2018 through 2026.
In the past, hospitals and hospital analysts have talked mainly about how the ACA Medicaid expansion program has decreased the number of uninsured patients coming in and increased revenue. Hospitals and hospital analysts have suggested that any benefits for hospitals from the ACA health insurance exchange program have been much smaller than the Medicaid expansion program benefits.
But, in the new analysis, the analysts present data suggesting that the ACA exchange program might be doing more than the Medicaid expansion program to improve hospitals’ finances.
The hospitals’ analysts estimate that the ACA expansion of Medicaid and the Children’s Health Insurance Program have helped about 10 million previously uninsured people get covered, and the ACA exchange program and exchange plan subsidies have helped about 10 million previously uninsured people get covered.
Eliminating the ACA coverage expansion programs immediately, without replacing them with comparable programs, could cost hospitals about $12 billion in revenue from newly covered Medicaid enrollees who returned to being uninsured in 2018, the analysts say.
Killing the exchange program and exchange plan subsidies could cost the hospitals about $18 billion in 2018 revenue from previously uninsured people who got covered through the ACA exchange and exchange subsidy programs and then lost their coverage in 2018, the analysts say.
If the analysis is correct, the elimination of the Medicaid expansion and ACA exchange subsidy programs could cost hospitals a total of about $30 billion in 2018, or about 3 percent of their revenue, with about 60 percent of that hit coming from the elimination of the exchange program.
The elimination of the exchange program could be worse for hospital profits than cuts in Medicaid and CHIP enrollment, according to another section of the report.
The analysts cite hospital data showing that individual commercial major medical plans pay hospitals an amount equal to about 145 percent of the actual cost of providing care.
Medicaid plans in states that took Medicaid expansion money pay about 80 percent of the actual cost of caring for patients who come in with Medicaid coverage.
The hospital analysts estimated in their forecast that ACA exchange plan reimbursement rates are in the middle, and that exchange plans may have been paying hospitals about 120 percent of the actual cost of caring for patients who enter with exchange plan coverage.
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