Obamacare has eased hospitals' burdens of caring for uninsured
Eric Stimson says that if his cancer had struck when he was uninsured, it would have destroyed more than his voice box — it would have taken his dignity.
The Des Moines resident had gone more than two years without health insurance before regaining coverage with help from the Affordable Care Act in 2014. A few months later, he became desperately sick with throat cancer. Without his new coverage, he would have had to ask Iowa hospitals to shoulder most of the cost of his care, which has included 10 operations. Instead, his hundreds of thousands of dollars in medical bills were covered by an insurance policy, for which he had paid more than half the $600 monthly premiums.
“I felt like I wasn’t a charity case,” he said.
Stimson is one of nearly 200,000 Iowans who gained insurance coverage under the law, also known as Obamacare. The law has eased burdens on Iowa’s 118 community hospitals, which are required to give free “charity care” to patients who have no means to pay their bills.
Iowa hospitals have seen a $127 million drop in annual charity-care costs since the Affordable Care Act took full effect in 2014, financial reports show. That was a decline of almost 38 percent. Over the same period, 2013 through 2015, Iowa hospitals saw a $168 million annual drop in “bad debt,” or medical bills that were sent but weren’t paid.
Hospital leaders say the improved finances helped them stabilize and improve their organizations. They worry that if the law is completely rescinded, they would be worse off than they were before it passed. They note that in return for backing passage of the Affordable Care Act, national leaders of their industry agreed to forego billions of dollars in scheduled increases under Medicare, the giant federal insurance program for elderly Americans. And in Iowa, the state gave up a limited form of Medicaid, called IowaCare, which used to help pay some hospital bills for poor adults who otherwise had no insurance.
Under the Affordable Care Act, about 150,000 poor Iowa adults have gained public coverage from Medicaid, which was expanded to include many Americans who previously were excluded. More than 40,000 moderate-income Iowans, including Stimson, obtained federal subsidies to help pay premiums on private insurance policies.
It’s not clear what would happen to those people, or how health-care providers would shoulder the burden of caring for them, under Republican plans that are still taking shape.
“There’s a lot of anxiety, a lot of angst,” said Kirk Norris, president of the Iowa Hospital Association.
The shift back to the old way of covering Americans wouldn’t just affect people who gained coverage under the Affordable Care Act, Norris said. It could also affect those who have longstanding private insurance coverage, often through an employer. In the past, hospitals and other health-care providers routinely sought to raise the prices they charged to insured patients in order to help make up for their losses on uninsured patients. Now, Norris said, “they’re not looking to transfer the costs like they were before.”
Hospital leaders say their improved finances have helped shore up money-losing areas of health care, including mental-health treatment programs and community education efforts to combat chronic problems, such as obesity and diabetes. Those could be among the first to be pinched if the hospitals have to deal with an influx of uninsured patients.
Republicans who campaigned to repeal Obamacare vow they won’t suddenly pull coverage from Americans who gained insurance under the law.
U.S. Sen. Chuck Grassley said he understands the concerns of hospitals in his home state of Iowa. The veteran Republican senator said he would work with hospital leaders to ensure a smooth transition.
“There’s consensus among the many of us in Congress who have seen the problems with Obamacare and heard about them from our constituents that its replacement should offer access to quality health care for all Americans,” he said in a statement released by his office. “The development of a replacement plan as led by House and Senate leadership involves hearing all views." He said congressional staff members already have met with employers, insurance companies, health-care providers and patient advocacy groups. "The conversations will continue as we develop a replacement plan that works."
Iowa’s junior U.S. senator, Republican Joni Ernst, also has been emphasizing both her distaste for Obamacare and her resolve to ensure a smooth shift to a new system.
“As we work to repeal and replace this bill, I recognize that it is critical to have a stable transition period in place and to ensure that folks with pre-existing conditions are not denied coverage,” she said in a statement last month.
Sabra Rosener, a vice president for Iowa’s UnityPoint hospital system, is advising people not to panic about the Affordable Care Act’s looming repeal.
“I think it would be an overstatement to say it’s going to completely go away,” she said.
Many of UnityPoint's hospitals have seen their financial burdens eased substantially since the law took full effect in 2014. For example, the system's flagship hospital, Iowa Methodist Medical Center in Des Moines, saw charity care costs plummet from $22.4 million in 2013 to $8.4 million in 2015. Methodist's "bad debt," or unpaid medical bills, fell from $21.7 million to $16.9 million. Iowa Methodist's main rival, Mercy Medical Center, actually saw its charity care rise over that time, from $17.4 million to $18.9 million. But its bad debt level dropped from $63.4 million to $24.2 million. The remaining unpaid bills could reflect patients who continue to lack insurance or those who owe money to hospitals for services that weren't covered by their insurance or were delivered before the patients had met their insurance plans' deductibles.
Rosener, who closely monitors government actions, doubts Congress and President Donald Trump would rip the Affordable Care Act away without replacing it with significant alternatives. Hospital leaders have repeatedly shown they can adjust to new ways of doing business, she said. “More than anything, uncertainty is hard,” she said. “We would just like to know.”
In Des Moines, the Affordable Care Act has helped stabilize Broadlawns Medical Center, which is Polk County’s public hospital. Broadlawns was nearly insolvent a decade ago, but its finances have improved to the point that it cut its property-tax levy rate by 15 percent last year. The public hospital has opened a new emergency room, added clinics and is significantly expanding its mental-health services.
Jody Jenner, Broadlawns’ chief executive officer, said half of his hospital’s patients are on Medicaid or lack insurance. The hospital and its patients have been buffeted by changes, including the creation and cancellation of the IowaCare program, the expansion of Medicaid under the Affordable Care Act and the subsequent shift to private management of Medicaid under Gov. Terry Branstad.
“All of that creates a lot of patient confusion,” Jenner said. Hospital leaders will keep helping patients obtain coverage while trying to keep tabs on what will happen in Congress, he said. “We’re kind of getting exhausted with all of the changes.”
Stimson no longer has such a direct stake in the debate over Obamacare. He’s turned 65, so he now qualifies for Medicare. The federal insurance program for seniors could face significant changes, but participants don’t face possible loss of coverage the way people who gained insurance under Obamacare could.
Stimson, who works part time as a courier for Mercy Medical Center, speaks through an electronic voicebox he holds against a hole in his throat. He jokes that he once was a baritone and now is a monotone.
He tries to remain upbeat. He survived the cancer that attacked his throat, then another tumor that invaded his prostate gland. Besides 10 surgeries, he’s endured radiation treatment, and he could still need chemotherapy. If he’d been uninsured when the cancer struck, hospitals would have had to write off his costs as charity care. Instead, the bills were covered by insurance that was subsidized by federal tax credits. Now, his coverage is mainly financed by taxpayers contributing to Medicare. “In the long run,” he said, “everybody pays.”
