Last week the U.S. Supreme Court upheld subsidies for those purchasing insurance through the federal healthcare exchange under the Affordable Care Act. Many have and will continue to expound upon the facts of the case and the circuitous route the Supreme Court has taken to continue to help Congress write and re-write a law based on facts established as an after-the-fact matter of convenience. These are now merely academic exercises.
The reality of the situation is that the Affordable Care act is now the effective law of the land. With the current Republican Congress lacking sufficient leverage to make a second-term President acquiesce to major changes, the status quo will likely stand for the remaining years of Obama's term.
It is highly unlikely that any potential Republican president with a Republican Congress would repeal a health care law that most Americans now in some way rely upon to receive their health insurance, without time to phase in some sort of replacement. As such, the earliest that opponents of Obamacare could hope to see any major changes implemented would likely be January 2018.
Before the ruling, congressional Republicans had nervously begun to ask themselves if they would be prepared to allow millions to lose their subsidies to pay for their insurance in order to gain the leverage needed to extract major concessions in health care policy from the President. They can now continue to maintain their aggressive posture while allowing the law to remain on the books. In the meantime, the problems will continue to be pushed down to the state level where options are few and real solutions are sparse.
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Under the Affordable Care Act, Disproportionate Share Hospital (DSH) payments are being phased out. These are subsidies paid to hospitals for Medicaid (with a similar program for Medicare being greatly reduced). In theory, states expanding Medicaid would make up for these missing payments.
A study by Tulane University and the Georgia Health Policy Center cites roughly one quarter of all acute care hospitals (hospitals whose average patient stay are 25 days or less) as highly dependent on DSH payments, with slightly more than half of those in weak financial shape. Georgia has at least 15 critical access hospitals whose finances are in critical condition.
Georgia has not expanded Medicaid, and there appears to be little political appetite for the state to do so. Democrats like to say that if Georgia would just accept the expansion of Medicaid all of our funding problems would be taken care of. It's not that simple.
Georgia's current Medicaid system has been steadily reducing the reimbursement rates for providers in order to help balance the budget during lean economic times. As such, Georgia's Medicaid reimbursement rates to many hospitals are about eighty cents on the dollar for cost of services. Adding new patients and providing some revenue for current uninsured patients may temporarily help hospitals with additional cash flow. The AJC recently reported that most of Georgia's rural hospitals lose money on as many of 80 percent of the patients they see. Merely adding volume does not fix this problem.
Many Republicans are equally guilty of promoting "solutions" easier applied to a bumper sticker than to reality. Usually the prefix of "free market" is added to suggestions that profit centers from hospitals be opened up to competition.
Health care is one of the most highly regulated industries in our country, at both the federal and state levels. Hospitals are required to offer life-saving services to anyone regardless of ability to pay. They are also required to perform indigent care and the state rewards them by reimbursing them for this well below their cost of services.
Allowing "free market" competition for certain services while sticking the hospitals with those guaranteed to lose money isn't a free market at all. It's privatizing profits while leaving non-profits and taxpayers on the hook for the losses.
Georgia lawmakers have been able to largely ignore these kinds of questions while waiting on D.C. to determine if Obamacare would be repealed or significantly changed. As of last week we know that for the foreseeable future it will not.
As such, Georgia must now take a long hard look at how we fund our existing hospital system with a specific emphasis on how we reimburse providers for indigent care. We can no longer expect hospitals and doctors to provide more but be paid less, all the while hoping for a different answer from Washington.
Washington, as usual, will remain part of the problem. Georgia will now have to decide on its own paths to solutions.