What Happens to the Poor If SCOTUS Repeals ‘Obamacare?’

June 27, 2012
By Melissa Bynes Brooks

Since 2000, hospitals of all types have provided more than $326 billion in uncompensated care to their patients. This was no small feat considering there were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010. The percentage covered by Medicaid was 15.9 percent. In 2010, 9.8 percent of children under 18 (7.3 million) were without health insurance.
The poverty calculation is based solely on money income and does not reflect the fact that many low-income persons receive noncash benefits such as food stamps, Medicaid, and public housing.

The passage of the Affordable Care Act in 2010 has provided for health care insurance at lower costs for everyone by allowing the uninsured and poor to either become eligible for the Medicaid program or get coverage through the new health exchanges.

The health care law has expanded access to care for 30 million Americans. An estimated 32.5 million people with Medicare received at least one free preventive benefit in 2011, including the new Annual Wellness Visit, since the health reform law was enacted.

Hospitals across the nation had a vested interest in meeting the new regulations. As a result, hospitals have transformed their business models as the law entails placing the necessary policies in place. Some of the changes have included an increased implementation of health information technology (HIT); a transition from a fee for services payment model to a bundle payment model; and insurance providers and hospitals receiving incentives geared towards pay for performance and quality over quantity.

The law dictated that under Sec. 9007 of PPACA, a charitable hospital organization shall not be treated as an Internal Revenue Code Sec. 501(c) (3) organization unless it meets specific new requirements. Specifically, hospitals would only be exempt from the tax on corporations by rising to challenges in the way that hospitals would be expected to, to deliver health care to the nation’s indigent population.

The changes included conducting and implementing ongoing community health needs assessments, maintaining a financial assistance policy which incorporates new measures for notifying patients of financial assistance policies available to them, implementing limits on certain charges to uninsured, indigent patients, and meeting new billing and collection requirements.

Essentially, there was now a mandate for hospitals to perform with the safety net mission of placing a high priority on the treatment of low-income patients defined as Medicaid, charity care, or self-pay patients.

As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2010 was $22,314 and $11,139 for an individual person.

“What will happen to the ability of hospitals to provide indigent care for the poor if the Affordable Care Act is struck down?”

There are essential benefits applicable to the Medicaid program which would also be included in the health care insurance exchanges. For example, there will not be an opportunity to expand this low cost insurance to adults without children with incomes below 133 percent of the poverty line. This indigent population would be ineligible for Medicaid coverage and would have a decreased ability to pay for care. Eligible Medicaid patients, despite having insurance, would have trouble gaining access to health care services because of the historically low program payment rates.

The uninsured and those disproportionately affected by poverty will be less likely to seek preventive health care services that are now provided for by the Affordable Care Act such as colonoscopy screening for colon cancer, Pap smears and mammograms for women, well-child visits, and flu shots for all children and adults.

These groups would also be less likely to follow up on necessary health care recommendations from their physicians, instead seeking treatment in an emergency room or urgent care facility which is a more expensive alternative and further compounds sky rocketing health care costs.

Finally, hospitals must have funds to operate, pay staff, and purchase the necessary equipment. This is directly related to pricing which in turn increases costs. With decreased access to federal support for the provision of services in tandem with increased debt generated by indigent and uninsured patients, hospitals would be compelled to increase prices while decreasing services for all consumers, those with insurance and those living in poverty.

Melissa Bynes Brooks is the editor of BrooksSleepReview.
Contact information: melissabynesbrooks@comcast.net
Follow on Twitter @Mlbbrooks

References

111th Congress Public Law 148 (2009-2010). Entitled The Patient Protection and Affordable Care Act. Retrieved June 25, 2012, from http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/html/PLAW-111publ148.htm

Affordable Care Act (2010). Rights and Protections. Retrieved June 25, 2012, from http://www.healthcare.gov/law/features/rights/index.html

Alliance for Excellent Education (2006). Healthier and Wealthier: Decreasing Health Care Costs by Increasing Educational Attainment. Retrieved June 25, 2012, from http://www.all4ed.org/files/HandW.pdf

American Hospital Association (2012). American Hospital Association Uncompensated Hospital Care Cost Fact Sheet. Retrieved June 25, 2012, from http://www.aha.org/content/12/11-uncompensated-care-fact-sheet.pdf

Analysis of the Joint Distribution of Disproportionate Share Hospital Payments (2002). A Policy Framework for Targeting Financially Vulnerable Safety Net Hospitals. Retrieved June 25, 2012, from http://aspe.hhs.gov/health/reports/02/DSH/ch2.htm

Carpenter, D. (2012). Health Care Organizations Start Overhauls for a New Delivery Model. Retrieved June 25, 2012, from http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG/Article/data/05MAY2012/0512HHN_FEA_ManagingTransition1&domain=HHNMAG

Healthcare Finance News (2012). Retrieved June25, 2012, from http://www.healthcarefinancenews.com/resource-topics/community-benefit
Results.org (2011). Medicaid. Retrieved June 25, 2012 from http://www.results.org/issues/us_poverty_campaigns/health_care_for_all/medicaid/

U.S. Census Bureau, Statistical Abstract of the United States: 2012 (2012). Income, Expenditures, Poverty, and Wealth Retrieved June 25, 2012 from http://www.census.gov/prod/2011pubs/12statab/income.pdf

U.S. Department of Health and Human Services (2012). Frequently Asked Questions Related to the Poverty Guidelines and Poverty. Retrieved June 25, 2012, from http://aspe.hhs.gov/poverty/faq.shtml#official

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