Americans with health insurance are already struggling to pay their share of co-pays and deductibles in the new patient-as-payer reality. Doctors and hospitals are pressed to collect the unreimbursed portion of those patients’ bills. Low-income patients, whose bills are currently reimbursed by federal cost-sharing reductions (CSRs), are in the eye of the storm that may devastate the healthcare community and those who are paying their own way through the healthcare exchange, aka ObamaCare. Unable to pass the proposed repeal of ObamaCare in a Congress dominated by his own party, President Donald Trump is now resorting to extra-legislative tactics. He has threatened to end healthcare cost subsidies currently in place under the Affordable Care Act. Expected net result? Sicker people and unpaid hospital bills.
Here are 5 things to know about CSRs, which Trump has characterized as “bailouts” for insurance companies.
- Ending CSRs is likely to cost all of us more down the line. Withdrawing $10 billion from the healthcare economy is sure to reverberate. Premiums will rise, and the government will pay more in subsidies to offset higher premiums for low-income Americans. The Henry J. Kaiser Foundation reports that this could cost the federal government $31 billion dollars more over a decade than if CSRs remained in place.
- More insurers will quit the marketplace and all premiums will go up. Once that happens, remaining plans that are left won’t be affordable, and people will opt for even higher deductible insurance plans and then just never fulfill the deductible. Or, they’ll leave the exchange, which will drive up the average healthcare risk, and therefore the premiums, for higher-income people who remain.
- Hospitals will choke. CSRs are what make hospitals able to absorb the cost of caring for totally uninsured patients. CSRs also currently offset insurers’ assistance to low-income patients, bringing these patients’ out-of-pocket co-pays and deductibles within reach through plans offered under Obamacare. If insurers quit the marketplace over the end of CSRs, there will be no plans, and therefore no subsidies.
- Some damage is already done. The policy indecision alone is already harming ObamaCare. Insurers are already bracing for the end of CSRs by announcing premium hikes that would surely force many un-subsidized users of ObamaCare to go totally uninsured in 2018. This is not good news for a self-pay crisis already in full bloom.
- The effect on public health could be disastrous. If premiums go even higher, it’s not a stretch to imagine even insured people foregoing needed and preventive healthcare, lacking money to pay their super high deductibles and coinsurance, or seeking care and leaving doctors and hospitals with more unpaid bills. More people would seek ER care in place of routine preventive care, and that care will be more expensive, delayed and less effective---and more often unreimbursed.
There’s no question that CSRs have helped reduce uncompensated patient costs. President Trump’s threat to end them as part of his plan to let “ObamaCare implode” would add a significant financial burden to hospitals and doctors already struggling to reconcile their focus on care with a need to provide patient financial services.