Shifts in Charity Health Care
By The Editorial Board
The New York Times, June 8, 2014
Health care reform was supposed to relieve the financial strain on hospitals that have provided a lot of free charity care to poor and uninsured patients. The reform law, known as the Affordable Care Act, was expected to insure most of those patients either through expanded state Medicaid programs for the poor or through subsidized private insurance for middle-income patients, thereby funneling new revenues to hospitals that had previously absorbed the costs of uncompensated care.
In return for the new income streams, hospitals that treat large numbers of the poor and get special subsidies to defray the cost would have those subsidies reduced on the theory that they would no longer need as much help.
But after the Supreme Court ruled that the reform law could not force states to expand their Medicaid programs, 20 or more states declined to do so. That failure has hurt some big urban hospitals, because their charity care burden remains essentially the same even as their federal aid has been cut. Even in California, which has expanded its Medicaid program, public hospitals that serve the poorest patients could face a big funding shortfall in future years, according to a study just published by researchers at the University of California at Los Angeles.
A recent report in The Times by Abby Goodnough found that some hospital systems have started tightening the requirements for charity care in efforts to push uninsured people into signing up for subsidized health plans on the insurance exchanges created by the reform law. In St. Louis, for example, Barnes-Jewish Hospital has started charging co-payments to uninsured patients no matter how poor they are. Those at or below the poverty level ($11,670 for an individual) are charged $100 for emergency care and $50 for an office visit.
But some medical centers have seen their charity care costs decline. A report late last month in Kaiser Health News and USA Today said that Seattleās largest āsafety netā hospital, run by the University of Washington, saw its proportion of uninsured patients drop from 12 percent last year to a surprisingly low 2 percent this spring, putting the hospital on track to increase its revenue by $20 million this year from annual revenues of about $800 million.
How all of this will shake out is still uncertain. Some vulnerable groups may find it even harder to get the care they need. Through a quirk in the reform law, residents below the poverty line in states that have failed to expand Medicaid are not eligible for either Medicaid or for subsidized coverage on the insurance exchanges. Undocumented immigrants are not eligible for Medicaid or the subsidized coverage. And some low-income people who have enrolled in subsidized health plans may have trouble paying their cost-sharing.
There are some ways to address these gaps. All states ought to expand their Medicaid programs since the federal government is offering very generous matching funds. Hospitals should move aggressively to help people enroll in Medicaid or in subsidized plans on the exchanges. And federal health officials need to review regularly whether health plan co-payments are actually affordable to those living on very modest incomes.
Reader Comments:
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paradocs2, San Diego
It has been little appreciated that one of the most important accomplishments of the Affordable Care Act was to create universal national health insurance for all poor legal residents of the United States who earned less than 138 percent of the federal poverty level. This magnificent and compassionate action of social innovation and national unity was frustrated by the insensitive, tragic and immoral decision of the Supreme Court. The consequences described in this editorial go beyond costs and inefficiencies to the persistence of the lack of medical services in many areas of our country with appallingly poor health statistics. The problem is more than “the financial strain on hospitals that have provided a lot of free charity care to poor and uninsured patients,” for it extends to the suffering of those millions of people excluded from ongoing medical care. In addition, the circumstances described in this editorial highlight the conundrum of our country’s health care system, based as it is on on a commercial market model and profit generating insurance companies. The best solution to these problems, both the economic inefficiencies and the human suffering, is the creation of a universal, national, single payer health system looking like Medicare expanded to cover all residents. It is profoundly upsetting that our individualistic contemporary culture and the politicians who represent it are blind to both the moral and economic consequences of their position.
Comment:
By Don McCanne, MD
PNHPās Jeoffry Gordon, MD (paradocs2, above) stated it so well that no additional comment is being provided today.