It's time to start calling the American Health Care Act by its true name—the Force Older and Poorer Americans to Postpone Health Care Act.
That is what the legislation promoted by President Donald Trump and House Speaker Paul Ryan would accomplish. And that, in turn, would wind up costing the federal government and the nation's employers a ton of money, none of which was included in the Congressional Budget Office's score of the bill.
Don't blame the CBO for that. Its economists declared the Republican plan “major legislation” that would have significant effects on the broader economy. Unfortunately, the agency said it was “not practicable” to estimate those effects due to “the very short time available to prepare this cost estimate.”
Those largely hidden costs will be huge. Hospital and physician lobbyists in Washington need to impress on legislators from both political parties that uncompensated-care costs don't go away. Much of it simply gets transferred to other payers like Medicare and the privately insured. If people are forced to postpone care because they become uninsured, those costs will grow larger than ever.
There hasn't been much research on that latter point in recent years. But studies conducted during the run-up to passage of the Affordable Care Act found that older Americans—people between the ages of 50 and 64—are especially vulnerable when they become uninsured.
The CBO estimated the uninsured rate for people in that age bracket who earn less than 200% of the federal poverty level would more than double to nearly 30% by 2026. Even those with higher incomes—a majority among older workers—would see their uninsured rate return to low double digits.
We know a lot about the behavior of older people who are uninsured. They are less likely to have their blood sugar or blood pressure checked. They are less likely to get cancer screenings. They are less likely to have their pre-diabetes and hypertension treated with low-cost generic medicines.
Their circumstances will change, of course, when they turn 65. A study done a decade ago found people joining Medicare who had been previously uninsured while suffering from chronic conditions such as diabetes and heart disease recorded 23% more doctor visits and 37% more hospitalizations than similarly sick new Medicare beneficiaries who had been previously insured.
Moreover, the difference in service use persisted until the groups turned 72. Forcing millions of older adults into the ranks of the uninsured will increase Medicare costs by tens of billions of dollars per year well into the future.
A similar dynamic will play out with the millions of poorer Americans thrown off Medicaid by the AHCA. They will postpone routine care and show up at their local emergency rooms when a crisis occurs.
Medicaid is a notoriously poor payer—just 63% of the cost of care on average. But that's better than nothing. Those uncompensated costs get transferred to a hospital's paying customers. Moving millions of people from Medicaid to the uninsured will make the size of that transfer greater than ever.
The Mayo Clinic's CEO, Dr. John Noseworthy, recently gave the public an unguarded glimpse into the world of hospital cost-shifting. In a speech to employees that was leaked to the Minneapolis Star Tribune, he noted the famed hospital system needed more insured patients to offset the uncompensated-care costs associated with public programs such as Medicaid.
“Balancing payer mix is complex and isn't unique to Mayo Clinic,” a spokesman said in a statement to Modern Healthcare. “It affects much of the industry, but it's often not talked about.”
It's time to start talking about it. Throwing millions of people off Medicaid will lead to soaring uncompensated costs at the nation's hospitals, which will have no recourse except to raise rates on the 155 million or so Americans with employer-based coverage. The AHCA won't just affect those losing insurance. It will make everyone—except a handful of the superrich who will get a tax break—worse off.
