Hospital groups: ACA repeal may cost billions, jobs

Dive Brief:

  • If legislation for an ACA repeal is passed without simultaneously implementing a replacement plan, it could cost hospitals $165.8 billion in federal payments through 2026, according to an analysis released Tuesday by healthcare economics firm Dobson DaVanzo. 
  • The research was commissioned by the American Hospital Association and the Federation of American Hospitals to investigate how repealing the ACA would impact U.S. hospitals as well as patients. 
  • The reconciliation bill HR 3762 was used as an example in a separate Dobson analysis of a good "starting point for congressional action in 2017 when they will again try to pass a budget reconciliation bill to affect ACA," FAH President and CEO Chip Kahn said on a media call.

Dive Insight:

Members of the Republican party have been attempting to repeal the ACA ever since the healthcare law was implemented in 2010. In the proposed ACA repeal-and-replace plans currently available, such a replacement plan may not come for up to three years, Kahn said. In addition, there still doesn't seem to be a unified front on what that replacement would actually entail.

President-elect Donald Trump has said he would make repealing and replacing the healthcare law a top priority. However, HHS Secretary Sylvia Mathews Burrell has warned that getting rid of the ACA could potentially have dire consequences, including the estimated 22 million people that could be left without health insurance coverage. In addition, current repeal-and-delay plans could widely change the already fragile individual insurance markets.

The hospital groups sent a letter to Trump and members of Congress to urge any repeal bill include a simultaneous mechanism for replacement coverage. "We strongly believe that any repeal legislation must be accompanied by provisions that protect the coverage for those currently receiving such protection," the letter noted. What would be "absolutely essential" to include would be to restore the Medicare and Medicaid payment cuts so that hospitals can provide the care that communities "both respect and deserve," according to Tom Nickels, executive vice president of government relations and public policy at the American Hospital Association.

Hospitals were under the impression that they would be getting more insured patients, so they reasoned that the Medicare and Medicaid payment cuts that came with the ACA implementation were not necessarily going to have a major impact, both AHA President and CEO Richard Pollack and Kahn noted on the media call. Yet the payment cuts to hospitals that date back to 1997 with the Balanced Budget Act have caused hospitals to "cut back staff, services, education, research, investments in new technology, and modernization, and upgrading of aging facilities," the letter stated. 

The losses that would come from ACA repeals as they have been proposed "cannot be sustained and would adversely impact patients' access to care, decimate hospitals' and health systems' to provide services, weaken local economies that hospitals sustain and grow and result in massive job losses," Nickels said on the media call.

One of the Dobson reports explains why the groups support using HR 3762 as a starting point. Even though the bill, which President Obama vetoed after it passed Congress, repeals ACA provisions that expand health insurance coverage and does not offer a replacement plan, it restores all ACA reductions in hospital payments that were supposed to help to finance the additional coverage, the report states.

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Filed Under: Payer Health Law Finance Hospital Administration Policy & Regulation
Top image credit: placeit.net, hhs.gov