Hospitals that primarily serve low income patients could collectively lose $40 billion in funding over the next decade if the Affordable Care Act is repealed and not replaced by something comparable, according to a new analysis by America’s Essential Hospitals.
That amount represents lost coverage and cuts to Medicaid and Medicare disproportionate share hospital (DSH) funding from 2018 through 2026. The ACA called for those cuts because hospitals would have theoretically needed that funding less as more people gained coverage on the marketplaces and through Medicaid expansion.
Assuming Congress uses a repeal bill first introduced in 2015 that canceled cuts to Medicaid DSH payments, safety net hospitals would still experience a $16.8 billion loss over the same period because of lost individual coverage and the continuation of Medicare DSH cuts.
For hospitals that often have very thin margins, the loss in funds could be a major blow.
“It’s a real possibility that some hospitals will close,” said Beth Feldpush, senior vice president of policy and advocacy at America’s Essential Hospitals.
The association represents nearly 300 of the nation’s hospitals that largely serve low-income individuals. Its members, on average, operate on zero margins while providing nearly 20% of the nation’s total uncompensated care.
The American Hospital Association and the Federation of American Hospitals released a similar report in December that estimated $165.8 billion in losses over the next decade, assuming the 2015 bill, H.R. 3762 is used as the template for the repeal.
The bill successfully passed the House and Senate already before being vetoed by President Barack Obama. On Wednesday, Republican leaders told reporters they would like to see the bill be the starting point for repeal talks going forward.
Hospitals lobbyists have been spending a lot of time on the Hill in recent weeks, primarily highlighting their role as a major employer in communities, according to Feldpush. Industry stakeholders, however, have not yet been invited to weigh in on what an ACA replacement should look like, she said.
AES has yet to review the many current ideas floating on the Hill. Those bills include greater reliance on health savings accounts and Medicaid block grants.
Feldpush says AES isn’t sure how to continue coverage at levels achieved by the ACA, as conservatives are against subsidies and cost sharing credits to help low income individuals buy insurance and Medicaid expansion.