The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) released a report that describes how the Medicare public option proposal could affect health systems, hospitals and patient access to care. The proposal, states the report, would operate as a “government-run Medicare-like health plan on the individual exchange” which in turn would cause almost $800 billion in cuts to hospitals and a serious disruption to the employer-sponsored health insurance market. Furthermore, it says the number of uninsured would be modest compared to the numbers who would gain coverage if the existing coverage framework is expanded.
“This buy-in to a Medicare-like public option may fit on a bumper sticker, but it is no solution for healthcare coverage,” said FAH President and CEO Chip Kahn. “This ill-conceived program would undermine access to care and threaten the ability of providers and clinicians to meet the needs of their patients.”
The analysis specifically examined the Medicare-X Choice Act, in which providers would be reimbursed at Medicare rates. Public programs such as Medicare and Medicaid, states the report, historically reimburse providers at less than the cost of delivering services and that in 2017, the combined Medicare and Medicaid underpayments totaled $76.8 billion. More specifically, the report found the proposal could result in the following:
- a modest drop in the number of uninsured compared to the 9 million Americans that would gain insurance by taking advantage of the existing public/private coverage framework
- significant disruption to the employer-sponsored insurance market, which provides coverage to more than 150 million Americans.
- a cut of nearly $800 billion for hospital-based services over a 10-year period from 2024-2033, while utilization (and therefore, costs) will grow as a result of increased coverage.
- impact the ability of providers, many of which are already absorbing more than $200 billion in Medicare cuts, to continue to care for patients under new public plans.
- stifle hospitals’ ability to keep pace with new life-sustaining advances in medicine, to continue to invest in new payment and delivery models and to manage rapidly escalating drug prices.
- continue to put pressure on other commercial plan rates, further undermining coverage for Americans not on Medicare, as well as other unintended consequences.
A copy of the executive summary and full analysis can be found here.
