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Health Care Providers Face Big Financial Hit From ACA Repeal

January 6, 2017 at 1:45 PM

Hospitals, doctors, and other health care providers would lose nearly $1.7 trillion in revenue between 2019 and 2028 if the Affordable Care Act (ACA) is repealed, and the demand for uncompensated care for the roughly 30 million newly uninsured would rise by nearly $1.1 trillion, a new Urban Institute report with state-by-state data finds.

Hospitals would take an especially big hit, losing $596 billion in revenues while facing a $296 billion increase in demand for uncompensated care. Physician practices would see a $218 billion drop in revenues and a $147 billion increase in demand for uncompensated care. Providers of other health services — including home health care, dental care, and prescription drugs — would also face both lower revenues and higher uncompensated care costs, Urban found.

Congressional Republicans’ plan to repeal most of the ACA without replacing it would cause nearly 30 million people to become uninsured due to the repeal of the Medicaid expansion and marketplace subsidies and the virtual collapse of the individual insurance market, an earlier Urban analysis found. That means many fewer patients would have insurance, dramatically cutting providers’ revenues.

While the newly uninsured would likely use much less medical care than if they’d remained covered, health care needs would still arise. And those needs might be more serious than if they’d had insurance and received needed care on a timely basis: the uninsured are likelier to delay care and less likely to have routine management of chronic health conditions.

Federal, state, and local programs funding uncompensated care almost certainly wouldn’t fill the gap that repeal would create. Under current law, federal funding for uncompensated care would rise by only $35 billion between 2019­–2028, accounting for only 4 percent of the added $1.1 trillion uncompensated care burden, Urban estimates. States and localities could boost funding, but it would take a six-fold increase to relieve the financial pressure on providers, which would also face a $1.7 trillion drop in revenue from private insurers and public programs.

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