Health Reform WK-EDGE Uncompensated care costs will sky rocket with a partial repeal of ACA
Wednesday, January 18, 2017

Uncompensated care costs will sky rocket with a partial repeal of ACA

By Bryant Storm, J.D.

The costs of uncompensated care will increase by over $1 trillion in the next ten years if measures to partially repeal the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) are successful. Lawmakers’ plans to utilize the budget reconciliation process to eliminate the ACA’s Medicaid expansion, individual and employer mandates, and marketplace premium tax credits and cost-sharing reductions will have significant economic consequences, particularly due to a dramatic rise in uncompensated care resulting from a new and large population of uninsured individuals. According to a Robert Woods Johnson Foundation and Urban Institute brief, the newly uninsured would seek $88 billion in uncompensated care in 2019 alone.

Spending. The brief analyzes coverage losses, spending changes, and revenue reductions. If the partial repeal goes through, between 2019 and 2028, spending by households and insurers (both public and private) on health care delivered to the nonelderly would be $145.8 billion lower in 2019 and $1.7 trillion lower between 2019 and 2028. Additionally, from 2019 to 2028, insurer and household spending would be $596.4 billion, $217.7 billion, $416.4 billion, and $428.6 billion lower for hospitals, physicians, other services, and prescription drugs, respectively.

Uninsured. While the reconciliation bill would cause an estimated 29.8 million additional uninsured, who would seek an additional $88 billion in uncompensated care in 2019 and $1.1 trillion in uncompensated care between 2019 and 2028, current policy would do little to offset the costs. Under current law, mandatory increases in federal funding would only serve to compensate for less than 4 percent of the uncompensated increase caused by the newly uninsured.

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