Hospitals could see a wave of unpaid medical bills should Donald Trump decide against funding the cost-sharing subsidies that low-income Americans use to pay out-of-pocket costs under the Affordable Care Act.
The President and his White House staffers have indicated he will decide this week whether to fund the so-called CSR payments, which lower the cost-sharing of most purchasers of Obamacare policies. If Trump follows through and stops the next monthly CSR payment due later this month, doctors and hospitals could see uncompensated care costs begin to rise for the first time in more than a decade.
“A decision to stop paying CSR payments would significantly disrupt the already fragile individual market,” Fitch Ratings analyst Megan Neuburger said in a new report. “Higher numbers of insured patients are a boon for hospitals and other healthcare providers since this helps to reduce expenses related to caring for the uninsured. Uncompensated care for a group of the largest for-profit hospital companies rated by Fitch has fallen by an average of 270 (basis points) since the launch of ACA insurance expansion, although it is difficult to isolate the portion of this benefit that is directly related to the ACA.”
About 80% of ACA marketplace customers qualified for cost-sharing subsidies in 2017, Fitch said. About $7 billion annually is allocated to fund the CSRs, which are used to lower copayments and deductibles.
What worries doctors and hospitals is that millions of Obamacare enrollees won’t be able to afford their copayments, deductibles and other related out-of-pocket costs.
“If that funding goes away, premiums for everyone who buys their own coverage will go up by about 20%,” America’s Health Insurance Plans spokeswoman Kristine Grow said. AHIP represents large health insurers including those selling Obamacare policies like Anthem ANTM +0.23%, Centene CNC +0.96%, Molina, Oscar Health and most Blue Cross and Blue Shield plans.
“The American people need this funding to lower what they pay for coverage and be able to see their doctor,” AHIP’s Grow said. “Funding to lower consumers’ cost-sharing is passed through the health plans–health plans do not profit from that funding.”
Since healthcare coverage was expanded to more than 20 million Americans, hospital charity care and related uncompensated care expenses that include bad debt have dropped significantly.
In 2015, hospital uncompensated care costs dropped to $35.7 billion–the lowest amount since 2007, when they were $34 billion, according to the American Hospital Association’s latest uncompensated care report, which was released in December of last year.
It could hit for-profit hospitals like HCA Holdings HCA -1.32%, Tenet Healthcare THC -0.17% and Community Health Systems CYH -3.78% hard, as the Fitch report indicated. But all hospitals would be impacted, analysts say.
Uncompensated care costs for the nation’s 4,862 hospitals dropped below 5% to 4.2%, or $35.7 billion in 2015, the AHA’s most recent tally shows.
Aside from hoping Trump doesn’t end the CSRs, healthcare providers see a bipartisan legislative compromise emerging in the U.S. House of Representatives that would provide a long-term commitment to such subsidies.
“It’s very good that we have a bipartisan group of legislators in the House of Representatives coming together to find solutions,” Illinois Health and Hospital Association CEO A.J. Wilhelmi told WTTW’s Chicago Tonight during a broadcast Monday night. “That’s very encouraging. And we need those solutions.”
source: forbes.com by Bruce Japsen