May 1, 2017 | Allen Van Driel, CEO
Seems like as I sit down to write this monthly blog, the things that come to mind to write about are about the same as last month. Last month it had rained a significant amount after a long dry spell. This month we enjoyed pretty nice weather, but late last week we had a late season freeze, which looks like it may have done significant damage to the wheat crop. And then we followed that with more than 2 inches of rain over the weekend. Rain in farm country is rarely a bad thing. Personally, I’m just glad that we were fortunate enough to be far enough east that we missed the snow. Eighteen inches or more of wet snow won’t do much good for the wheat crop either. I’ve heard stories of places southwest of here where the farmers couldn’t even get to their fields to see how badly the weight of the snow had damaged the wheat. I don’t expect it will be good. But moisture is still welcome.
Last month I wrote about the attempts in Congress to “Repeal and Replace” the Affordable Care Act, or Obamacare as many refer to it. This law, passed seven years ago, made many changes to the health insurance marketplace in this country. I realize that there are many folks out there who remain strongly opposed to the ACA and everything it represents. But without any doubt there were many good aspects to the law. People complain loudly about the “Individual Mandate”, which requires everyone to have health insurance, either through an employers sponsored plan or an individual policy purchased either with or without a government subsidy. People don’t like having things mandated to them by the government. And we all love to hate the IRS, which was the agency chosen to enforce the individual mandate through the imposition of tax penalties for those who chose not to maintain health insurance coverage. And many employers strongly dislike the “Employer Mandate”, which requires many employers to provide health insurance through a group plan to all or some of their employees. The employer mandate forced a number of employers to pay for coverage that had not previously done so. But I suspect that it is the mere idea of a mandate in any form that rankles most. Perhaps the mandate, coupled with the complicated paperwork that was required to do something as simple as providing evidence that the employer was, indeed, providing the required insurance coverage caused bad feelings.
There are many thing to dislike about the ACA. But there are also many beneficial aspects of the law. The fact that insurance companies are forbidden to deny health insurance coverage to anyone because of a pre-existing health issue is one very big one. And the prohibition on lifetime “caps” on benefit costs is another. Then there is the ability to provide coverage on a parent’s policy to adult children up to the age of 26. Another benefit that many families have used to their advantage. As a Critical Access Hospital, one of the greatest benefits we have seen from the ACA is our ability to participate in a pharmacy discount program referred to as 340B. This program adds several hundred thousand dollars to our bottom line every year. That’s right, hundreds of thousands.
So when we hear talk of “Repeal and Replace”, we look pretty carefully at what the impact of such a move would be locally. Just like when the ACA was originally passed, repealing it would have profound consequences on people in our community, and on SCMH as an institution. Some of those consequences would depend on whether the ACA legislation would be completely repealed, or just parts of it. If just some parts were repealed, which parts would they be?
While the impact is far from clear, the avenue the Congress has pushed hardest to use to repeal or modify the ACA is called the American Health Care Act. Like the legislation it was intended to replace, this proposed law is very complicated. And understanding what it contains is a moving target, because it is under near constant revision as the Republicans seek to gain enough votes to get it passed into law. A month ago, I wrote that the Republican leadership had withdrawn the bill from consideration prior to a vote, in order to prevent its defeat. At the time, President Trump and the Republican leadership in both houses of Congress publically said that the Affordable Care Act would remain in place “for the foreseeable future”. Well, here it is a month later, and efforts are underway in Washington to gather enough votes and tweak the language sufficiently to gather the necessary votes for passage.
While the content of the bill is still a moving target, some things are becoming clear. The Congressional Budget Office completed their “scoring” of the financial impact of the bill. Their estimate shows that there would be the loss of $839 BILLION in Medicaid funding nationwide over 10 years. And they estimate that 24 MILLION Americans would lose health care coverage by 2026 under the provisions of the law.
This week the American Hospital Association produced estimates for every hospital in the country of the financial impact of the American Health Care Act. Their estimates indicate that the cost to SCMH to provide treatment to those people without insurance would increase by $730,000 IN ONE YEAR, or a cumulative total of $6.3 MILLION Between 2017 and 2026. And during that same period, they project a decrease in Medicaid funding to total $1.9 MILLION. Those are huge numbers. And they don’t just mean lost revenue to the hospital, they mean real losses to our bottom line. Because most of those losses represent the cost of care that we would continue to provide, but wouldn’t be paid for by Medicaid or insurance companies. And if we incur the cost of providing the care, but don’t get paid for it, where does the money come from? Only one source – the local taxpayers. The negative impact in provision of care to uninsured people in our community would be far greater than the current tax support that we receive from local taxpayers. A very frightening prospect.
I would hope that Congressman Marshall and Senators Roberts and Moran would understand these numbers and what they would mean to this community and others like it in rural Kansas. The last time around, all three indicated they probably would have voted in favor of the AHCA if it had come to a vote. Most projections I’ve seen indicate the bill may actually come to a vote, at least in the House of Representatives, before the end of May. I hope our representatives in Congress will consider these financial projections and vote AGAINST the bill if it comes to a vote this time. I hope you’ll join me in encouraging them to do so.