Experts: ACA repeal threatens health insurance of 100K Louisvillians

Screenshot from the Family Health Centers website

A repeal of the Affordable Care Act threatens to take away health insurance from more than 100,000 Louisvillians, disrupt operations of local health providers and hamper economic growth, Mayor Greg Fischer and local health care experts said.

A full repeal of the law, informally known as Obamacare, would have even broader consequences and affect local and state government coffers and even people who get insurance through their employers, the experts said.

Federal legislators took first steps last week to begin a repeal of President Barack Obama’s signature health care law. Republicans in Congress have for years tried to repeal the law. With President-elect Donald J. Trump, who made the law’s repeal part of his election campaign, their chances have gone up significantly.

Louisville health experts told IL that the exact impact of a repeal is difficult to predict because some Republicans have said they want to replace the law with something better, though details about a replacement are scant. GOP senators plan to introduce a replacement proposal next week.

The Congressional Budget Office, which provides Congress with nonpartisan analyses for economic and budget decisions, said that an ACA repeal would increase the number of people without health insurance by 32 million by 2026.

Local impact

Bill Wagner

Bill Wagner, executive director of Family Health Centers in Louisville, said staffers in the seven clinics have helped more than 16,000 people gain health insurance in the last three years, largely because of the expansion of Medicaid, the government health insurance program for the poor.

The clinics, which provide health services primarily in underserved neighborhoods, saw about 40,000 individual patients last year, and about 17 percent lacked health insurance, down from 51 percent before the ACA.

Wagner said for many people the ACA has been a “godsend.” Before the ACA, many people with pressing health needs simply stayed away from health clinics until their conditions became so severe that they absolutely had to see a medical professional.

The ACA has allowed many people, especially the poor, the unemployed and other marginalized groups to get chronic medical problems under control, to see specialists they could not afford before and to get help for dental and mental health issues, he said.

The higher number of people with insurance also is helping medical providers.

Wagner said that the Family Health Centers, which relies heavily on government grants, struggled with a $2.5 million operating deficit before the law took effect. The ACA, and the higher share of patients with insurance, has eliminated that deficit.

In addition, the clinics, which employ 400, have hired staff and expanded their capacity and capability to include dental and mental health and social service and even substance abuse programs. The East Broadway facility will unveil a new $1 million dental clinic in mid-February.

Dr. John Roberts

Other providers have benefited. Dr. John Roberts, a neonatologist with UofL Physicians, said the higher share of patients with insurance has allowed his neonatology group to hire nurse practitioners to provide better and more personal care.

The group includes 25 physicians and 20 neonatal nurse practitioners who work primarily at Norton Children’s Hospital, University Hospital and Baptist East, but also travel to nearby hospitals and clinics to help with complicated deliveries.

Before the ACA, the group saw many more people who lacked insurance but needed help for their premature babies. Those babies received care, of course, Roberts said, but the physician group often received no pay.

For many physicians, reimbursement rates from insurance companies are so low that their margins are very thin, and any increase in the share of patients who cannot pay can put the physicians out of business, Roberts said. An ACA repeal likely would force his physician group to cut staff, he said.

Wagner, too, said that if the Family Health Centers see fewer patients with insurance benefits, the clinics would have to make cuts.

“There’s no question that we’d be eliminating services,” he said.

That would mean cutting positions and likely closing facilities, Wagner said.

Uncompensated care

With fewer people having insurance, clinics and hospitals also would provide more health care services without getting paid for them, health experts say. This so-called uncompensated care, or charity care, harms especially rural hospitals, many of which have closed in the last decade, leaving rural patients to have to drive longer distances to get care. Health care providers in Louisville annually provide hundreds of millions of dollars worth in uncompensated care.

Norton Children’s Hospital is part of Norton Healthcare

For example, Norton Healthcare, a nonprofit, in 2015 provided free care to more than 19,000 patients, at a cost to Norton of $8.1 million. The system also incurred $74.8 million in unpaid costs from Medicaid, Adam Kempf, senior vice president of finance, told IL via email.

“Since the Affordable Care Act was passed, giving individuals greater access to care, Norton Healthcare has treated an increasing number of patients with Medicaid coverage,” Kempf said. “As more patients have coverage, the number of patients qualifying for charity care has decreased.”
Hospitals nationwide have seen more insured — and paying — patients: In 2015, U.S. hospitals incurred $35.7 billion in uncompensated care, down about $10 billion, or 22 percent, from 2013, according to the American Hospital Association. Uncompensated care in 2015 accounted for 4.2 percent of total hospital expenses, the lowest share in at least 25 years.

Health care providers recover some of the uncompensated care dollars by shifting costs to customers who have insurance and by getting assistance from state and local governments.

The city of Louisville, for example, used to provide $2 million to prop up Family Health Centers. Since the ACA, it has reduced the funding to about $800,000.

State and local governments — and insured patients — are savings millions of dollars because of the ACA, Wagner said.

If the ACA were repealed, he said, health care providers probably would be in a worse position than before the law was passed, because many of the government funding mechanisms that propped up health care providers no longer exist.

“You can’t just go back to the pre-ACA funding, because it’s not there,” Wagner said.

Without insurance, more people also are going to delay getting needed medical care, which means their conditions will worsen and they will seek treatment in emergency rooms, he said. That will drive up health care costs overall, Wagner said, at the same time that providers will get fewer dollars from patients and the government.

Courtesy of the Commonwealth Fund

People are mistaken if they believe that these dynamics will drive down their health care costs. Hospitals will shift the uncompensated costs to patients, governments and insurance companies, and that means higher copays for patients, higher taxes and higher insurance premiums.

“Eventually, we all pay for it,” Wagner said.

The CBO, the nonpartisan federal agency that analyzes the impact of legislation, said compared to current projections, an ACA repeal would double insurance premiums for individual policies by 2026.

A recent analysis predicted that even a partial ACA repeal would cost Kentucky 45,000 jobs and billions in business activity.

Lifetime caps, pre-existing conditions

According to a recent poll, the vast majority of Kentuckians do not seem worried about losing health insurance, and more than half of Kentuckians believe the ACA has not affected them. Nonetheless, large shares of Kentuckians would see their policies change in some dramatic ways if the ACA were repealed fully without a replacement.

For example, the law required that parents be able to keep children on their insurance policies until age 26. It also required that insurers offer preventive health services without a copayment.

It also banned insurance companies from capping lifetime benefits.

Before the ACA, insurance policies for more than 100 million Americans contained some form of lifetime cap, often at $1 million, according to the U.S. Department of Health and Human Services. People with chronic diseases, such as hemophilia, or severe illnesses, such as cancer, can easily exceed that cap and be left without insurance. Before the ACA people who exceeded that cap faced medical bills of hundreds of thousands of dollars and often faced bankruptcy. In Kentucky, 1.4 million people, including about 360,000 children, had lifetime limits on their policies before the ACA.

Without the ACA, insurance companies also would be allowed again to cancel insurance policies of or refuse to sign up people with so-called pre-existing conditions, which can include heart disease, asthma or even pregnancy. Kaiser Health News estimates that the share of Americans with pre-existing conditions is 27 percent.

Mayor Greg Fischer

Mayor Greg Fischer at a recent town hall meeting that an ACA repeal would harm economic growth.

“You cannot grow a great economy if you don’t have a health workforce,” he said.

Beyond that, Fischer said, providing health care to all Americans is a moral question.

“Will we take care of our brothers and sisters?” he asked. “This is just a matter of human decency and justice for all Americans.”

Fischer also said that repeal proponents were engaging in “linguistic jiu jitsu” in suggesting that they could get rid of unpopular components of the law, such as the individual mandate, while being able to retain the law’s popular components, such as the ban on discrimination against people with pre-existing conditions, because the unpopular components help pay for the popular ones.

Those suggestions are “an insult to every thinking American,” the mayor said. “It’s irresponsible and torturous to talk about repealing the Affordable Care Act without a replacement policy in place.”

U.S. Rep. John Yarmuth

U.S. Rep. John Yarmuth, D-Kentucky, said at the town hall meeting, which he organized, that he does not expect any federal action on the ACA for about six months because some Republican U.S. senators have said they do not want to repeal the law without a replacement.

The lawmakers have other good reasons not to repeal the law, he said. About 7,000 lobbyists were in the nation’s capital to shape the ACA, and those lobbyists have not disappeared, Yarmuth said.

Legislators also are getting calls from hospital leaders, medical device entrepreneurs and others, who worry about the impact of a repeal, he said.

Yarmuth urged consumers who like the bill to contact their legislators to persuade them to keep it.

“Be disruptive,” Yarmuth said.