The Impact of Medicare-X Choice on Coverage, Healthcare Use, and Hospitals

The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) released a new report that details the impact that a Medicare public option proposal could have on the ability of hospitals and health systems to continue to provide access to high-quality care to their patients and communities. The study finds that such a proposal, which would create a government-run Medicare-like health plan on the individual exchange, could have a significant impact on patient access to care. The proposal would result in the largest ever cut to hospitals - nearly $800 billion - and be particularly disruptive to the employer-sponsored health insurance market. The study further finds these significant disruptions would result in only a modest decrease in the number of uninsured compared to how many people would gain coverage through leveraging the public/private framework that exists under current law. The report was prepared by KNG Health Consulting on behalf of the AHA and FAH. Specifically, the findings in the report show that the proposal could:

  • Result in only a modest drop in the number of uninsured compared to the 9.1 million Americans that would gain insurance by fully implementing the existing public/private coverage framework.
     
  • Lead to a significant disruption to the employer-sponsored insurance market, which provides coverage to more than 150 million Americans.
     
  • Lead to a cut of nearly $800 billion for hospital-based services over a 10-year period from 2024-2033 while utilization (and therefore, costs) will grow as a result of increased coverage.
     
  • Impact the ability of providers, many of which are already absorbing more than $200 billion in Medicare cuts, to continue to care for patients under new public plans.
     
  • Stifle hospitals’ ability to keep pace with new life-sustaining advances in medicine, to continue to invest in new payment and delivery models and to manage rapidly escalating drug prices.
     
  • Continue to put pressure on other commercial plan rates, further undermining coverage for Americans not on Medicare, as well as other unintended consequences. 

Read on to learn more about the impact of the Medicare-X Choice Act on coverage, health care use, and hospitals.

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