The Affordable Care Act will probably be remembered as the most transformative pieces of legislation passed in the last half-century. Its table of contents alone is over 10 pages long.
Its architects frequently referred to its basic structure as a “three-legged stool” because if you remove one leg, the rest of the structure could come tumbling down. Components of the legislation were carefully built to support specific reforms, and each “leg” had to do its part for the structure of the law to remain standing.
When the U.S. Supreme Court determined that states could opt-out of Medicaid expansion, the first leg was removed. In order for the ACA to be implemented as it was written, everyone needed to have health coverage, either through employers, the ACA marketplace, or Medicaid. When everyone is covered by one of these options, health care costs go down for everyone.
Making the Medicaid expansion optional inadvertently risked bankrupting hospitals and community health centers that treat mostly uninsured patients. The drafters of the ACA went to great lengths to ensure the law paid for itself. To do so, the ACA included a reduction in extra funding for “Medicaid Disproportionate Share Hospitals (DSH).” DSH funding is given to hospitals that are financially burdened by providing free care to uninsured patients.
So, it made sense to reduce this funding if those hospitals would start seeing revenues for their previously uninsured patients. However, keeping the policy to cut DSH funding while also not expanding Medicaid is a disaster no one intended to happen because hospitals struggling to provide large amounts of uncompensated care would lose the only thing keeping them afloat.
Though Ohio did expand Medicaid in 2014, other changes in federal policies, specifically the removal of the individual mandate, and continued uncertainty in the market are leading to increases in uninsured rates. New census data shows that for the first time since the ACA passed in 2010 the number of people who lack health insurance is going up. This is also putting more strain on the health care system, especially those with a disproportionate share of uninsured patients.
As we see continued attempts to cut off the ACA’s “legs,” the DSH program remains essential to keeping hospitals that treat low-income patients open and functional. Hospitals that are part of the DSH program are typically safety-net hospitals that provide critical, quality services to the communities they serve, whether in rural or urban areas.
Often, these hospitals are the only or primary provider of services to the surrounding area. These cuts would force them to cut services, raise rates, or both, resulting in higher premiums, job losses, and in some cases, hospital closures. Lower-income Ohioans who depend on their local hospitals will be forced to find care elsewhere or pay more for the care they need.
In Ohio, DSH cuts would have an enormous impact on hospitals serving lower income community members. Ohio’s current annual DSH allotment is $759.3 million, which 161 hospitals and health centers rely on to keep their doors open and provide quality care to low-income patients.
If Congress fails to delay cuts soon, these hospitals stand to lose $328.9 million in funding the first year – a whopping 43% reduction in funding – and double that amount the following year.
While the national healthcare debate often stalls along partisan lines, the DSH program is unique in that it enjoys support across both sides of the aisle. President Ronald Reagan created the DSH program in 1985, and Congress first delayed implementation of the cuts in 2013 in an overwhelmingly bipartisan vote.
They have delayed them each year since, most recently in the budget agreement Congress passed in 2018. However, time is running out this year; if Congress does not act soon, $7 billion in cuts to the DSH program will go into effect on October 1, 2019.
As partisan politics dominate Washington, delaying DSH cuts is one issue leaders from both parties can and should agree on. But if Congress doesn’t act soon, funding for the program that helps keep these hospitals open will lapse, affecting dozens of hospitals across Ohio. This would definitely bring the tower crashing down on thousands of Ohioans.
Graham Bowman
Ohio Poverty Law Center
