Area hospitals and health care organizations have given their opening reviews of the proposed American Health Care Act – and they aren’t good.
“Most of the hospitals in this state are already losing money,” said Dr. John Murphy, president and CEO of Western Connecticut Health Network and president of Danbury and New Milford Hospitals. “As written and as it stands right now, the American Health Care Act would put some hospitals and physicians out of business.”
Particularly troubling, health care providers said, are the changes in Medicaid. As written, the AHCA would, starting in 2020, reduce the federal matching rate for newly eligible adults from 90 percent of medical costs to the rate for other enrollees in the state. That latter matching rate ranges from 50 to 75 percent depending on the state, with an average of about 57 percent.
“That single change would mean a $300 million cut in federal funding in Connecticut, a $19 million cut to Bridgeport Hospital and an $87 million cut to the Yale New Haven Health System,” said William Jennings, president and CEO at Bridgeport Hospital, a member of the Yale New Haven system. “For us to cut $19 million would be catastrophic.”
“But,” Jennings added with a sardonic laugh, “we’d have to figure out how to make it happen.”
“There are three keys to any health care legislation: increasing access, making it affordable to everyone and promoting a high quality of care,” said Mark Thompson, executive director of the Fairfield County Medical Association. “As far as we can tell, the AHCA seems to be missing two of those three” – accessibility and affordability.
According to the Connecticut Office of Policy and Management, the AHCA could cost the state $89 million to $539 million in 2020, the year many of the major provisions would take effect. An estimated 34,000 people who buy health plans through the state’s health insurance exchange, Access Health CT, would not renew their coverage for 2018 if the proposal becomes law.
About 85,000 of the 111,500 Access Health customers receive federal subsidies to discount coverage. The OPM analysis projects the average customer would receive $2,155 less in assistance in 2020 under the AHCA, while those over the age of 60 would see a drop of $4,799.
“Replacing the Affordable Care Act without maintaining its core tenets of affordability and accessibility would have a devastating effect here and across the nation,” said Lt. Governor Nancy Wyman, who also serves as chair of the Access Health board. “On Connecticut’s health care exchange, more than 76 percent — about 85,000 residents — use federal subsidies or cost-sharing to help them afford insurance. Reducing that assistance will make it harder for people to be able to afford insurance and healthcare.”
“The Republican proposal also shifts Medicaid costs to the state, which could threaten health-care accessibility for low-income and disabled residents,” she said. “The Republican proposal certainly doesn’t expand coverage or improve affordability. In fact, it will put health care out of reach for many residents.”
“This proposed law would result in a tremendous cost shift to the states once fully implemented, which could cost upwards of $1 billion per year when fully implemented after 2020,” said the OPM report.
The analysis went on to say that the biggest cost — estimated at between $50 million and $450 million — would come from changes in the way Medicaid is funded. Instead of the current system, whereby the federal government reimburses states for a percentage of what they spend on Medicaid, states would receive a set amount per Medicaid client from which to pay for coverage.
“The proposal to cap federal payments will force Connecticut and all states to either pick up the costs, significantly limit benefits, reduce the number of people served or reduce rates to providers, while also making states vulnerable to arbitrary reductions in federal spending going forward,” the OPM said.
“Those are all bad options,” Jennings said.
In 2020, Connecticut also would lose an estimated $3 million from reduced payments for the Community First Choice program, a Medicaid provision that provides coverage for home care, and an estimated $6 million from the repeal of a fund used for prevention and public health, the OPM said.
“Medicaid expansion resulted in more than 200,000 Connecticut residents gaining coverage,” said Michele Sharp, spokesperson at the Connecticut Hospital Association. “But if funding is lost, there is an open question regarding how those people would receive coverage.”
“We are also concerned for providers,” she said. “The proposed plan as written would put a funding cap in place. This is particularly problematic in Connecticut because this state’s Medicaid reimbursement is already one of the lowest in the nation, with providers being paid less than half of what it costs to provide care. If the cap is aligned with current funding levels, the state would face unending chronic Medicaid underfunding that would threaten care and limit access for the poorest among us.”
A number of national organizations — including the American Hospital Association, the Association of American Medical Colleges, the Children’s Hospital Association, the American Nurses Association, the American Medical Association and the American Association of Retired Persons — have also voiced opposition to the bill.
“We have concerns with several aspects of the proposed American Health Care Act, such as a $3,200 rate increase for the average 64-year-old Connecticut citizen buying insurance under the current law,” said AARP Connecticut State Director Nora Duncan. “We will fight to ensure that any legislation protects Medicare, lowers prescription drug prices, stops insurance companies from overcharging older Connecticut residents and protects their ability to live independently.”
Duncan noted that, while the Affordable Care Act that the AHCA seeks to replace funded the expansion of coverage in part through cuts to Medicare payments to hospitals, the new bill “would repeal some of the funding earmarked for providing health care services in the future but keep the reductions in payments to hospitals. This would threaten Connecticut hospitals’ fiscal stability and further compromise patient care.”
At hospitals, “We don’t turn anybody away — it’s not only our mission but it’s also the law, regardless of a patient’s ability to pay,” said Jennings at Bridgeport Hospital. By removing the individual mandate for purchasing health insurance, “Those choosing to go without coverage will increase. … Clearly there will be a rise of the uninsured and an increase in the cost for uncompensated care.”
At Bridgeport Hospital, the combined total of uncompensated care for free, charity, and indigent patients, existing shortfall in what Medicaid does not reimburse, amount of tax paid to the state and bad debt has increased from $43 million in 2008 to a projected $88 million in 2017. “That’s unsustainable,” Jennings said, “and the provisions in the American Health Care Act make it worse.”
According to Murphy at Western Connecticut Health Network, which also includes Norwalk Hospital, “For every dollar we spend on Medicaid patients, we lose about 50 cents. That’s not something you can make up in volume.”
“It’s pretty clear that the number of uninsured will go up, and dramatically,” said Murphy, also sits on the Connecticut Hospital Association Board of Trustees. “And that will of course negatively affect our already strained margins.”
Murphy and others pointed to the March 13 release of the nonpartisan Congressional Budget Office’s analysis of AHCA as indicative of just how costly the bill would be. In addition to noting the $880 billion in Medicaid cuts over 10 years, the CBO predicted that 14 million Americans would lose their coverage in the first year and the number of uninsured would rise to 52 million in 2026 — roughly 24 million more than the office said would be uninsured if the ACA remains in place. Standard & Poor’s was somewhat more conservative, estimating that up to 10 million would lose their coverage in the first year.
The impact of the AHCA on hospitals and medical practices could threaten the future of the health care profession itself, said Patricia W. Walker, dean of the College of Health Professions at Sacred Heart University in Fairfield.
“If hospitals have layoffs due to increased expenses and less revenue, it may lead them to take fewer students for clinical placements,” she said. “This would negatively impact health professions’ education programs in the state.”
“We’ve been talking about this a lot in my classes, as you can imagine,” said Deborah List, a professor in SHU’s College of Health Professions. “At the very least, I think doctors will become even less inclined to be part of a private practice and focus instead on hospital-based practices.”
All of those interviewed said they took heart from the portions of the ACA that the proposed AHCA retains: primarily, requiring insurers to cover people regardless of pre-existing medical conditions and to offer 10 essential health benefits like preventive services and maternity care; prohibiting insurers from setting a limit on how much they have to pay to cover someone; and allowing children to remain on their parents’ policies until the age of 26.
“It was virtually impossible to say you’re not in favor of everybody having health insurance,” Jennings said of the Affordable Care Act. “Having access to health insurance or going on Medicaid was a good thing, and we have seen some positive economic impact.”
“We generally supported it,” said Thompson at the Fairfield County Medical Association, “because it did improve access to health insurance and generally was more affordable … although it did increase some people’s costs, to the point where they wondered what the good of having insurance was if they couldn’t afford to use it due to high co-pays and the like. The ACA wasn’t perfect.”
Regarding the final shape of the controversial Republican bill, “I expect some changes will take place as it goes through the legislative process, but they’re not going to go back and start from scratch,” Jennings said. “That horse is out of the barn.”