Yesterday, the Affordable Care Act had a very bad 7th birthday. Republicans in the U.S. House of Representatives couldn’t muster the votes to replace the law, but late last night, President Trump offered an ultimatum – either pass the repeal package or he will essentially leave Obamacare in place. What a birthday party!
As of this writing, we don’t know the outcome of the House vote. But what we do know is that since the elections, even those who have historically hardened positions on ACA repeal are looking at the law with new eyes — their constituents’. For the first time in the history of the law, its popular with a majority of Americans. (Although, among the smaller population that realized there wasn’t a difference between Obamacare and the Affordable Care Act, it’s probably had a higher cool factor.) The change has been driven in part by Americans’ growing recognition of the law’s benefits and their potential to lose them. The fundamental question for revelers as they blow out the candles on the cake, or their opponents' attempt to extinguish it in part or whole, is what are they wishing for?
It’s clear that the debate is high stakes for Missouri. A significant portion of the individuals who have subsidized coverage through the individual marketplace could lose it. This year more than 250,000 Missourians purchased coverage in the marketplace, with the vast majority receiving premium support. As premium support is replaced with tax credits, and the mandate to have coverage disappears, so will many of these covered lives. Based on the Congressional Budget Office analysis of the replacement bill, MHA initially estimated that as many as 136,000 Missourians could lose coverage next year. A more recent CBO review puts the health coverage for nearly 500,000 Missourians at risk by the year 2026.
Fewer covered lives will compound hospitals’ uncompensated care load. In 2015, for the first time in a decade, the uncompensated care costs at hospitals declined year to year. The total cost was $1.2 billion, which was $100 million less than 2014 — without Medicaid expansion and with a functioning marketplace. That doesn’t bode well for a post-ACA world with fewer covered lives.
Uncompensated care is only the beginning. The American Health Care Act, the House Republican “replace” plan, creates problems for the very states that supported conservatives’ opposition to the ACA. Missouri didn’t enact Medicaid expansion. Unfortunately, the gift for the state would be inequity in funding through the AHCA — that is to say, no gift at all. The AHCA eliminates the Medicaid disproportionate share hospital payments and provides a $10 billion national transition fund – both are good news. However, cuts to Medicare, Medicare DSH and payment cuts from Medicare’s transition to value, remain. Medicaid expansion would have offered about $2 billion annually to Missouri. Under the AHCA, Missouri hospitals will subsidize care through more than $5.5 billion in cuts and gain only $90 million a year in transition funds. Missouri and the 18 additional non-expansion states are receiving cents on the dollar. Missouri's U.S. Congresswoman Vicky Hartzler has shared her concern over this issue, as have others nationally.
The ACA used the Medicaid program to insure the nation’s low income, working poor. The AHCA, eliminates this coverage expansion by transitioning away from expanded Medicaid coverage, while fundamentally restructuring the state-federal relationship in the process. The per-capita allotments would pressure providers and likely shift significant risk – and ultimately costs – from the federal ledger to the states. Moreover, the AHCA doesn’t mention provider tax issues which have multi-billion dollar implications for Missouri. The AHCA’s plan for establishing a base rate is unclear, which again calls into question the equity issue for non-expansion states. In addition, it fails to spell out how the state and federal share will be allocated during a disaster like the Joplin tornado, or small and large economic downturn — everything from the Noranda plant closing to the great recession. And, it doesn’t clarify how expensive but transformational new pharmaceuticals or medical procedures will be funded. These are huge unanswered questions for Missouri.
Hospitals have been implementing strategies to improve care since the launch of the ACA. The AHCA would reduce funding for these improvements, while imperiling Medicaid and continuing Medicare cuts without coverage. Half the hospitals in the state have margins of 2 percent or less. The growing demands on these small margins — uncompensated care, patient safety and quality, investments in technology, investments in the workforce for an aging population — means too many priorities are competing for too few resources.
Health care is among the largest economic sectors in the state. The ACA-to-AHCA transition will impact all Missourians. The insured will almost certainly experience a large cost-shift. Recently, Moody's bond rating service called the legislation "credit negative" for hospitals because of expected growth in uncompensated care. At the same time, industries that support hospitals and health care will be harmed, resulting in less spending throughout the economy.
Depending on today’s vote, the legislation could move to the U.S. Senate. In the Senate, 32 of 52 GOP senators are from non-expansion states — the majority of the majority. If a repeal and replace grand compromise is possible, it will begin in the Senate.
Most people won’t spend much time or energy celebrating yesterday’s ACA birthday or the AHCA vote. That doesn’t mean that the milestones aren’t relevant to their daily lives. In fact, this may be the most important issue before this entire Congress.
At the end of the celebrations — when it’s time to open the gifts — I hope there’s a better functioning health care system in the pile. That would be my wish when the candles are blown out. Hospitals and the patients we serve can’t afford to settle for lottery tickets.
Send me a note to let me know what you’re thinking.
Herb B. Kuhn
MHA President and CEO
In This Issue
U.S. House Postpones Vote On ACA Repeal And Replace Legislation
MO HealthNet Updates Pharmacy Clinical Edits For Short-Acting Opioids
CMS To Host Emergency Preparedness Requirements Final Rule Training Call
Illinois Supreme Court Rules In Favor Of Hospital Tax Exemption
Brown Resigns From Landmark Hospital Of Cape Girardeau
March 23, 2017
MHA Releases FFY 2017-2019 Medicare Pay-For-Performance Reference Guide
MLN Connects Provider eNews Available
CMS Hosts Hospice Open Door Forum
CMS Releases Outpatient Quality Reporting Checklist And Submission Deadlines
JAMA Publishes Septic Shock Drug Shortage Study
MHA Joins Growing List Of Challengers To DSH Audit Methodology
March 22, 2017
MHA Distributes CAH Databook
MO HealthNet Issues Managed Care Bulletin
Trajectories — Infection Control Strategies
March 21, 2017
CMS Delays Expansion Of Bundled Payment Programs
American Association Of Poison Centers Launches Online Help Tool
HIDI Releases Fourth Quarter 2016 VBP Payments Model
March 20, 2017
CMS Delays Expansion Of Bundled Payment Programs
HIDI Releases FFY 2016 Inpatient, Outpatient Physician Loyalty Report
GW Health Workforce Institute Unveils U.S. Health Workforce Report
MHA Posts Sleep Study Requirements Webinar Recording