Blog Series: What ACA Repeal Could Mean to Health Care Providers

Feb 28, 2017

By MBPC Staff

In the coming weeks, Congressional House members could begin committee work on the effort to repeal the Affordable Care Act (ACA). MBPC released a report last month on the detrimental impact of repeal on those who risk losing insurance coverage, including the over 71,000 Montanans who have gained coverage through Medicaid expansion. Montana is experiencing record levels of Montanans with insurance, but that could change quickly as families lose access to Medicaid and adequate subsidies to pay for insurance through the exchanges. A more recent report from the Urban Institute describes the impact of repeal on Montana’s hospitals and medical providers. This report assumes partial repeal similar to that passed by Congress in 2016 (and vetoed by President Obama), which included the elimination of Medicaid expansion, the individual and employer mandates, and Marketplace subsidies. We don’t yet have full details on what exactly the House will take up this week, but Urban report provides a glimpse at how repeal of ACA could impact hospitals and providers across the state. If Congress does choose to eliminate these aspects of the ACA, Montana providers could face nearly one billion dollars less of health care spending in 2019, putting additional pressure on uncompensated care costs and those with insurance.  

Estimated total Health Care Spending in Montana for 2019 (in millions)
	ACA	ACA Repealed through Reconciliation	Difference
Total Health Care Spending	5,636	4,664	-972
Hospitals	2,111	1,722	-390
Physician Practices	857	740	-117
Over Services	1,366	1,125	-241
Prescription drugs	1,301	1,077	-224

When fewer people have health insurance, health care spending decreases because people either forego care or are unable to pay in full. Statewide, health care providers stand to lose $972 million in 2019 with the loss of Medicaid expansion, the individual mandate, and existing health care subsidies. From 2019-2028, these costs would add up. If the ACA were kept in place, Montana insurers would spend an estimated $71.3 billion on health care over this time period. But if the ACA is repealed without an adequate replacement plan included, this spending could decrease by $13.6 billion. If someone is unable to forego medical care without insurance, and are unable to pay out of pocket, hospitals and other providers are left to pick up the tab. In 2019, uncompensated care would rise by $481 million across the state. Between 2019-2028, this figure would rise to over $5 billion. Someone must pay for uncompensated care, meaning hospitals and other providers shift the cost to private insurance companies. This “cost-shift” forces insurance companies to raise their premiums, passing the burden along to those with insurance. Reduction in health care spending would also result in the loss of jobs across the state. In 2019, Montana could lose up to 8,000 jobs, according to the Commonwealth Fund. Three thousand of these jobs would be in the health care sector. Repeal of the ACA could have dramatic effects for Montana’s economy, from rising health care costs to lost jobs. For more information about the effects of repeal, be sure to read MBPC’s latest report: 142,000 Montanans Face Uncertainty of Health Coverage with Threat of ACA Repeal.