If Republicans in Congress move forward with plans to repeal the Affordable Care Act (ACA) without a replacement ready, hospitals could lose hundreds of billions of dollars.
A report commissioned by the American Hospital Association (AHA) and the Federation of American Hospitals (FAH) may serve as a blueprint for the lobby’s efforts if and when the ACA is repealed.
In the scenario envisioned by the report, Congress passes a repeal bill similar to the one vetoed by President Barack Obama in 2015, which is the very strategy Senate Republicans are already favoring. Policies expanding coverage would be repealed, with no replacement ready to take its place, while also eliminating taxes, subsidies and fees supporting that expanded coverage.
What would remain, however, are the reductions in payments to hospitals that were intended to help offset the ACA’s subsidies. Without those cuts rolled back, the report said hospitals would lose $165.8 billion between 2018 and 2026, with the losses rising to $289.5 billion when accounting for inflation updates.
“Losses of this magnitude cannot be sustained and will adversely impact patients’ access to care, decimate hospitals’ and health systems’ ability to provide services, weaken local economies that hospitals help sustain and grow, and result in massive job losses,” wrote AHA President and CEO Rick Pollack and FAH President and CEO Chip Kahn. “As you know, hospitals are often the largest employer in many communities, and more than half of a hospital’s budget is devoted to supporting the salaries and benefits of caregivers who provide 24/7 coverage, which cannot be replaced.”
If the repeal bill doesn’t address reductions in Medicaid and Medicare’s disproportionate-share hospital (DSH) payments, hospitals would lose another $102.9 billion, according to the report.
The report didn’t say the hospital groups are against an ACA repeal, though it did lay out the negative impacts of the current repeal strategy. Roughly 22 million people would lose their health coverage, which it called an “unprecedented public health crisis,” and the financial hit could hamper hospitals’ transition to value-based care.
“The lost revenue associated with ACA repeal could well be counter-productive to the overarching goal of bending the cost curve in order to reduce the impact of the Medicare program on the federal deficit going forward,” the report said.
The conclusion echoed the AHA’s earlier appeal to Trump: have an ACA replacement plan ready.
“However, if that is not the legislative path to be pursued, then it is vital that such legislation provide a true clean slate and also include repeal of the reductions in payments for hospitals services embedded in the ACA—specifically the substantial reductions to hospitals’ annual inflation updates and the cuts to Medicare and Medicaid DSH payments,” Pollack and Kahn wrote.