Killing ACA would lead to huge spikes in uncompensated care
If the Trump administration gets its wish and the courts end the Affordable Care Act, the number of uninsured people in the U.S. would jump by nearly 20 million, the Urban Institute said in a new report. Most of those who would lose insurance are covered through Medicaid expansion and the ACA exchanges.
The loss of coverage would lead to considerable increases in uncompensated care. Urban Institute estimated the amount at $50.2 billion, which would be an 82% increase compared to ACA levels.
The effects of ending the ACA would depend on the state. Kentucky would be one of the hardest hit with the number of uninsured increasing by 151%. Meanwhile, a non-Medicaid expansion state like South Dakota, which also has a low ACA plan enrollment, would only see a 12% increase in uninsured.
After months of quiet on the ACA front, the Justice Department sent shock waves across the country Monday when it filed a brief in the Fifth Circuit Court recommending the court wipe out the ACA in its entirety.
A Texas judge's decision in December declared the law unconstitutional after Congress removed the individual mandate penalty in its 2017 tax overhaul. That decision was stayed pending appeal. Democratic attorneys general have defended the ACA. They filed a brief arguing that the landmark law is constitutional even without an individual mandate.
In the past, the Trump administration's Justice Department publicly opposed the individual mandate and pre-existing condition protections but had not gone so far as advocating the courts wipe out the law.
If the law is killed, enrollment in Medicaid and the Children's Health Insurance Program would decline by 15.4 million people, according to the report.
Ending the ACA would also remove tax credits that some Americans receive to help pay for coverage in the exchanges. The Urban Institute said those 9.2 million Americans, as well as the nearly 8 million with ACA coverage without tax credits, would lose coverage. About 4.6 million of them would get a nongroup plan that's not on the exchanges with limited benefits and protections, including pre-existing condition protections. The result would be much higher individual plan rates like before the ACA.
"Without the ACA's federal tax credits to attract many healthy people into the nongroup insurance market, those consumer protections could not be maintained because of the risk of substantial adverse selection into the market. Therefore, those enrolling in private nongroup coverage after repeal would likely have policies that cover significantly fewer benefits and require more out-of-pocket spending for services, similar to nongroup coverage before ACA implementation," according to the report.
Of course, cutting the number of insured will result in higher uncompensated care costs. Urban Institute estimated that about half of the states would see a doubling of uncompensated care with Connecticut, Iowa and Oregon feeling the biggest pain.
"Increases in demand for uncompensated care would vary substantially across states, relating directly to the state's increase in the number of uninsured residents and their health statuses. Funding for uncompensated care is not guaranteed to increase to meet this additional demand; consequently, a significant share of this increased demand could translate into further unmet medical need," the institute said.