Press Release

New Report Outlines Impact of Potential ACA Repeal on Hospitals and Health Systems

The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) today sent letters to President-elect Trump and Congressional leaders highlighting a new report that details the impact a potential repeal of the Affordable Care Act (ACA) would have on hospitals and health systems as they strive to care for their communities.

Rick Pollack, AHA president and CEO, and Chip Kahn, FAH president and CEO, stressed that health coverage is key to ensuring patients have access to the care they need.  They noted that any reconsideration of the ACA should be accompanied at the same time by provisions that guarantee similar coverage to those who would lose it.  They also highlighted the important role hospitals play in providing essential medical services and critical public health infrastructure.  

It appears Congress is moving to reconsider the ACA in the early days of the new year without enacting accompanying legislation specifically guaranteeing similar coverage for those who will lose it.  If that approach is taken, they asked that any repeal legislation prospectively restore key hospital reductions included in the ACA to offset the cost of providing coverage. In that instance, the groups stated:

“… [W]e respectfully urge you to also include in such legislation the prospective repeal of funding reductions for Medicare and Medicaid hospital services for patient care that were included in the ACA for purposes of helping fund coverage for the insured. Specifically, we seek your support for the restoration of the Medicare hospital inflation update, as well as Medicare and Medicaid Disproportionate Share Hospital (DSH) payments that support those facilities that take care of high volumes of uninsured, poor and disabled Americans. Restoring these cuts for the future is absolutely essential to enable hospitals and health systems to provide the care that the patients and communities we serve both expect and deserve.”

The report, which was commissioned by the AHA and FAH, was prepared by the health care economics firm Dobson | DaVanzo. The report finds that, under the most recent repeal without replacement bill, H.R. 3762, hospitals would face a net negative impact of $165.8 billion from 2018-2026 after accounting for the restoration of the Medicaid DSH cuts that H.R. 3762 contemplates. It also found that hospitals would suffer a loss of $289.5 billion in Medicare inflation updates if the payment reductions in the ACA are not restored. Finally, the study authors calculate that the impact of retaining the Medicare and Medicaid DSH reductions would amount to $102.9 billion.

“Losses of this magnitude cannot be sustained and will adversely impact patients’ access to care, decimate hospitals’ and health systems’ ability to provide services, weaken local economies that hospitals help sustain and grow, and result in massive job losses. As you know, hospitals are often the largest employer in many communities, and more than half of a hospital’s budget is devoted to supporting the salaries and benefits of caregivers who provide 24/7 coverage, which cannot be replaced,” wrote Pollack and Kahn.

The letter also calls attention to a second Dobson | DaVanzo analysis that estimates the cumulative federal payment reductions to hospital services that have been imposed through other Congressional and Executive Branch actions subsequent to and independent of the ACA. These reductions alone total another $148 billion from 2010 – 2026, and come on top of the ACA reductions.

Pollack and Kahn concluded the letter by committing to work with the President-elect Trump and Congress during this challenging process and reiterating the importance of properly funding hospital services.

They wrote, “As you begin reconsideration of the ACA, we want to be a constructive partner in this discussion. We strongly believe that any repeal legislation must be accompanied by provisions that protect the coverage for those currently receiving such protection. However, if that is not the legislative path to be pursued, then it is vital that such legislation provide a true clean slate and also include repeal of the reductions in payments for hospitals services embedded in the ACA – specifically the substantial reductions to hospitals’ annual inflation updates and the cuts to Medicare and Medicaid DSH payments. If the coverage associated with the ACA disappears, the importance of these payments would be heightened – they are vital in helping defray the costs of treating our most vulnerable patients.”

A copy of the executive summary and full study can be found by visiting www.aha.org.

About the AHA

The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the health improvement of their communities. The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks, other providers of care and 43,000 individual members. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at www.aha.org.

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