Affordable Care Act repeal could have big impact on economy

Feb 1, 2017
Originally published on January 31, 2017 5:27 pm

Emergency rooms must care for anyone who shows up, regardless of insurance or ability to pay. Amy Pollard, CEO of University of Rochester Medical Center’s Noyes Hospital, in Dansville, knows that federal law well.

“If you had no health insurance, but you felt ill and you presented to an emergency department here we have to take care of you. And we have to take care of you knowing we may not get paid anything for that care,” Pollard said.

But with the Affordable Care Act a lot more people -- an estimated 20 million -- got health insurance. That means hospitals haven’t been eating costs as much.

“The more people that are out there without coverage, the greater financial burden that is for the hospital providing the care because we’re not going to get paid for that care,” Pollard said.

While people across the country wonder what’s going to happen to their health insurance, some experts are pointing out that the Affordable Care Act is not just about insurance. The Affordable Care Act set off major changes to the funding that hospitals, states and counties receive from the federal government, for example.

Now, some stakeholders say an ACA repeal, without significant replacement, will threaten financial stability - not just for hospitals - but for local economies as well, including jobs.

During the development of the Affordable Care Act, medical associations agreed to less Medicare funding - $165 billion over time - from the federal government, with the understanding that more people would be insured under the ACA.

Picture a seesaw with the uninsured on one side and federal Medicare payments on the other. If both are lifted off, the seesaw should hypothetically even out.

“That’s basically the equation that launched the Affordable Care Act,” said Dr. William Streck, chief medical and health systems innovation officer at the Health Care Association of New York State.

But it wouldn’t just be hospitals that would deal with ramifications of a larger uninsured population, Streck added, because of the complexities of the Medicaid program.

Funding for the Medicaid program is like a stack of funnels: The money sifts down from the federal government to states and then counties. In New York, Gov. Andrew Cuomo’s report estimates that the state would be looking for $3.7 billion if the ACA is repealed without replacement.

“It has consequences -- it ripples through the economy. I think that is one thing people have to realize,” Streck said.

Authors of a recent study from George Washington University and the Commonwealth Fund estimate 2.6 million jobs would be lost nationwide in 2019, in a post-ACA world. In New York, the authors project, 131,000 jobs could be cut across various sectors.  

“I’ve worked with our hospital on a regular basis. I’ve looked at their income and expense sheets. I know they’re struggling to keep the doors open. It’s a tough economy for them in a rural community such as our district represents,” said Rep.Tom Reed, who represents parts of the Southern Tier and western New York.

Reed, R-Corning, does support a repeal of the Affordable Care Act. Consumers have been hit hard by premiums, he said, and establishing an alternative to the current health law would be one way to ensure financial stability.

“What I’m looking forward to is how we replace this and how we provide a health care system that can stand on its own two feet and be vibrant,” Reed said.

What that alternative might be is yet to be determined.  

Pollard said she knows they might be on track to losing money if the uninsured rate jumps and those federal Medicare payments aren’t restored.

“Trying to guess how much that’s going to be is definitely a guessing game right now,” she said.