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California Public Hospitals Could Lose $2.2B if ACA is Repealed

News  |  By Doug Desjardins  
   February 19, 2017

A repeal would more than double the number of uninsured residents and end $16 billion in funding for Medicaid expansion, studies estimate.

This story originally appeared in California Healthfax.

New reports estimate that 21 public hospitals in California stand to lose more than $2 billion in combined annual revenue if the Affordable Care Act (ACA) is repealed.

The studies from the California Association of Public Hospitals and Health Systems (CAPH) examined the impact of an ACA repeal on the 21 public health systems it represents in the state.

"The estimates are based on an increase in uncompensated care costs for hospitals in the event that people who gained coverage under the ACA become uninsured," said Erica Murray, president and CEO of the CAPH.

The studies estimate the 21 public health systems and related facilities serve as the primary care provider for more than 560,000 California residents who gained coverage under the ACA since 2014, people who would likely lose coverage if the ACA is repealed without a replacement plan.

"A repeal of Medi-Cal expansion could result in California's public healthcare systems losing $2.2 billion in revenue every year," the report states.

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It estimates a repeal would more than double California's current uninsured rate of 7.6% to more than 17% and result in the loss of $16 billion in federal funding the state currently receives for Medicaid expansion along with $5 billion in lost funding in federal subsidies.

A study of Arrowhead Regional Medical Center (ARMC) in San Bernardino County estimates the 465-bed hospital would lose $120 million in revenue each year with a repeal of the ACA.

The report estimates that 211,000 county residents would lose their health coverage and that "a dramatic increase in the number of uninsured, coupled with a loss of funding, could destabilize San Bernardino County's health delivery system."

An ACA repeal would result in $125 million in lost revenue per year, with 133,000 San Francisco residents losing health coverage, according to a San Francisco Health Network study.

Natividad Medical Center in Monterey County would lose about $36 million in revenue as more than 50,000 county residents lose health coverage and San Joaquin General Hospital would lose an estimated $50 million in annual revenue with an ACA repeal.

Wider Repercussions
A repeal of the ACA would have repercussions beyond higher uncompensated care cost for hospitals.

The study noted that since Medicaid expansion was introduced in 2013, "public healthcare systems have given around 700,000 patients newly assigned primary care teams and have added more than 1 million patients to disease management registries."

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The study noted that since the advent of federal healthcare reform, "public healthcare systems have decreased the rate of diabetes patients being hospitalized for short-term complications by more than 20% and the rate of patients with uncontrolled diabetes has dropped from 1% to 0.18%.

"There are a lot of programs like this that are related to, but distinct from, Medicaid expansion that would be impacted by a repeal," said Murray.

"If people lose their insurance, they'll also lose access to these preventive care and coordinated care programs that make care more cost-effective and keep costs down."

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