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Cost of ACA Repeal: $1.7 Trillion in Uncompensated Care

News  |  By Philip Betbeze  
   January 06, 2017

30 million additional uninsured patients would drive up the 10-year cost if the law's main components are repealed, an Urban Institute study shows.

As Republican lawmakers who control Congress gird themselves to repeal and replace Obamacare as a "first order of business," new research shows that doing away with the law will be costly to providers of healthcare services in the form of uncompensated care.

In fact, researchers from the Urban Institute—with funding from the Robert Wood Johnson Foundation—say that repeal will raise the nation's uncompensated care bill from $656 billion to $1.7 trillion over a 10-year period.

Republican lawmakers and the president-elect have promised to replace the Affordable Care Act with another healthcare law, and the research only considers what would happen if the ACA were repealed and nothing else changed.

The new research attributes much of the projected increase in uncompensated care costs to the loss of healthcare coverage for as many as 30 million people who would be newly uninsured with the law's repeal.

Much of the increase in the uninsured population would result from eliminating the Medicaid expansion that came with the ACA, the premium tax credits for the purchase of marketplace coverage, and the individual mandate.

Republican lawmakers have said Obamacare repeal is the first priority of the new administration, through executive orders and legislative action, but a gradual transition to a new law and a winding down of Obamacare would lessen the impact of the law's repeal at the patient level.

That could be problematic if the law is repealed and no replacement is passed.

GOP's Timetable For Getting Repeal To Trump May Be Ambitious

If the law is repealed but no other legislative action is taken, 2019 healthcare spending by Medicaid, private insurers, and households would fall by $145.8 billion and an additional 30 million uninsured people would seek $88 billion in uncompensated care, the researchers say.

The Urban Institute research used the 2016 budget reconciliation package repealing the ACA—which passed Congress last January but was vetoed by President Obama—as the baseline for its analysis.

Hospitals Would Be Hit Hard
Under that scenario, hospitals would bear a big part of the burden because insurer and household spending on hospitals alone would fall by $59.1 billion.

Newly uninsured patients would seek an additional $24.6 billion in uncompensated care from hospitals during the 2019 fiscal year.

"The partial repeal of the ACA through a reconciliation bill 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 in the Urban Institute's Health Policy Center, in a press release.

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

Philip Betbeze is the senior leadership editor at HealthLeaders.

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