Health Insurance

A new $1 TRILLION medical bill: Obamacare repeal fallout

Here's how much repealing Obamacare would actually cost: Expert

Less insurance = a bigger bill for caring for uninsured people.

A new report finds there would be a huge spike in the cost of care sought by people who can't afford to pay for it if Obamacare is partially repealed by Congress.

The Urban Institute report found that the cost of so-called uncompensated care sought from hospitals and doctors would equal $1.7 trillion over a decade — $1.1 trillion more than if the Affordable Care Act was kept in place.

The estimate is based on an earlier finding by the group that almost 30 million Americans would lose health insurance under an Obamacare repeal scenario Congress voted on last year, but that had been vetoed by President Barack Obama.

Uncompensated care is care provided by hospitals and doctors that is not covered by insurers or patients themselves, either because the patient is completely uninsured or because they cannot cover their out-of-pocket medical costs.

These costs are ultimately passed along to consumers who can afford to pay for their own health care, as well as to state and local governments, or end up being eaten as a loss by health-care providers.

"You have a big problem, because there is nothing in the law that would increase the [amount] of federal payments" that offset the costs of providing uncompensated care, said John Holahan, institute fellow at the Urban Institute's Health Policy Center, a co-author of the report.

The report, funded by the Robert Wood Johnson Foundation, noted that the $1.7 trillion estimate is based on "the amount of care the newly uninsured would seek, not the value of the uncompensated care they would actually receive."

The increase in uncompensated care would come as a consequence of lower overall health spending by insurers and households. The report estimates that there would be about $1.6 trillion less in such spending by insurers and households, according to the report.

Congress this week began laying the groundwork to repeal the ACA, as President-elect Donald Trump has planned, and which could lead to big increases in the number of uninsured people.

Since the ACA has been in effect, uncompensated care costs at hospitals have sharply fallen. The biggest drops, by far, have come in states that expanded their Medicaid eligibility standards to allow coverage of more poor adults, as allowed by Obamacare. Medicaid expansion has led to to biggest gains in coverage under the ACA.

A repeal scenario "being considered by Congress would create more uninsured people than would have been the case had the ACA never been passed," said Matthew Buettgens, senior research associate at the Health Policy Center.

"The increases in uncompensated care sought by the newly uninsured would be more than state and local governments and health providers could internalize, undoubtedly leading to substantially more unmet medical need."

It is not certain that the repeal sought by the Republican-led Congress will mirror last year's budget reconciliation package. And even if it did, the GOP might end up crafting and adopting a replacement for the ACA that could offset some if not all of the increases in uncompensated care costs estimated by the Urban Institute.

"If they put in a full replacement that covers the same number of people, then this paper's academic," Holahan said.

But no such replacement plan has been formally proposed. Health-care experts have warned that repealing Obamacare without adopting a replacement plan could wreak havoc in the individual insurance plan market.

On Tuesday, the American Medical Association, the leading professional organization for doctors, wrote congressional leaders and said, "It is essential that gains in the number of Americans with health insurance coverage be maintained" as legislators consider repeal.

"Consistent with this core principle, we believe that before any action is taken through reconciliation or other means that would potentially alter coverage, policymakers should lay out for the American people, in reasonable detail, what will replace current policies," wrote AMA President Dr. James Madara.

"Patients and other stakeholders should be able to clearly compare current policy to new proposals so they can make informed decisions about whether it represents a step forward in the ongoing process of health reform."