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News & Knowledge

USA: Impacts of Trump on health care providers, consumers & third-party payers

28th April 2017
By Patrick D. Seiter, Taylor Porter

Health care providers, third-party payers and consumers have spent the past seven years digesting, planning for and implementing the hundreds of pages of legislation and thousands of pages of regulations published under the Affordable Care Act (ACA). MSI's Louisiana law member Taylor Porter provides an insight into recent developments that might affect the ACA.

Despite constant legal challenges and Congressional efforts to repeal the ACA, since its enactment in March, 2010, the ACA was, and most predicted would continue to be, the law of the land. That is, until Tuesday 8 November 2016, when Republican Donald Trump was elected President of the United States and Republicans retained their majorities in the House of Representatives and Senate, giving one political party control of the executive branch and both houses of Congress for the first time since before the 2012 elections. Post-election, President Trump has continued pursuing his campaign promise to repeal and replace the ACA, though few specifics have emerged regarding the President’s replacement plan except that, as President Trump was quoted in the Washington Post, it will offer “insurance for everybody” and be “much less expensive and much better.”

Among the concepts or strategies suggested as alternatives to the ACA are tax credits for consumers who purchase health insurance, increased emphasis on Health Savings Accounts (HSAs), “high risk pools” to cover individuals with expensive, chronic illnesses, and Medicaid block grants. Regardless of the plan ultimately crafted to replace the ACA, however, no doubt virtually every provision of the current law will be in play.

This article highlights just a few of the many direct and major impacts that could be felt by health care providers, third-party payers and consumers if key provisions of the ACA are eliminated or significantly altered by new legislation.

For health care providers:

  • Decreased medicaid reimbursement: A cornerstone of the ACA, expanding Medicaid eligibility to all individuals under age 65 up to 138% of the Federal Poverty Level resulted in millions of previously uninsured Americans, including approximately 350,000 in Louisiana, becoming eligible for Medicaid coverage. This resulted in both increased volumes for providers due to pent-up demand for services from the previously uninsured, as well as a payment source for care provided that was previously uncompensated.

    The American Hospital Association estimates that hospitals alone could lose more than $160 billion as a result of the decrease in Medicaid revenue and the increase in unpaid medical bills if Medicaid expansion is repealed and the expansion population loses coverage. Further, replacing the current federal financial participation (FFP) model for Medicaid funding, under which an increase in state funding for Medicaid results in a corresponding increase in federal funding, with a block grant model, under which the federal contribution to a state’s Medicaid program would be capped, would almost assuredly result in reductions to state Medicaid budgets, particularly in states such as Louisiana with high FFP rates. A reduction in Louisiana’s total Medicaid budget would undoubtedly be felt most acutely by Louisiana’s health care providers.

  • Increased uncompensated care: As a corollary to the decreased revenue providers will experience if people who gained coverage under the ACA lose that coverage, if the ranks of the uninsured return to pre-ACA levels, so will the levels of uncompensated care.
  • Increased cost-sharing and bad debt: While no clear replacement plan for the ACA has yet emerged, virtually every plan or proposal currently under consideration promotes expanded use of HSAs.

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About Taylor Porter - Baton Rouge

Founded in 1912 in the heart of Louisiana’s economic development in Baton Rouge, Taylor Porter is one of the oldest, largest and most respected law firms in Louisiana, with a diverse range of local, regional, national and international clients in the most complex transactions and litigation across a variety of industries.

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