Hhospitals could end up on the losing end of some $800 billion over 10 years due to lower Medicare reimbursement for providers as people switch from commercial plans. (Photo: Shutterstock)
A public option supported by an increasing number of Democrats is meeting pushback from hospital groups.
An analysis from the American Hospital Association and Federation of American Hospitals projects that hospitals could end up on the losing end of some $800 billion over 10 years due to lower Medicare reimbursement for providers as people switch from commercial plans to a buy-in to Medicare.
Related: Medicare for All: Where the 2020 presidential candidates stand
“This buy-in to a Medicare-like public option may fit on a bumper sticker, but it is no solution for health care coverage,” FAH President and CEO Chip Kahn said in a statement. ”This ill-conceived program would undermine access to care and threaten the ability of providers and clinicians to meet the needs of their patients.”
The groups fear that if the legislation, termed the Medicare X proposal, is adopted, it could spur an exodus of more than 20 million people from commercial insurance to Medicare and increase utilization rates. The legislation was proposed by senators Michael Bennet, D-CO, and Tim Kaine, D-VA.
Democrats are increasingly anxious to offer a viable and competitive public option to consumers dependent solely on the commercial market. But the analysis, prepared by KNG Health Consulting, suggests that the better solution is to double down on the Affordable Care Act. According to the report, doing so would allow estimated 9.1 million additional uninsured Americans would gain coverage, compared to 5.5 million under Medicare X.
It's not the first time a study has projected that hospitals will end up taking the bulk of the cuts; an analysis last year of Senator Bernie Sanders' Medicare for All bill also found that hospitals' balance sheets would be the ones in the crosshairs, and spending would fall by $1.2 trillion over a 10-year period.
According to Tom Nickels, executive vice president of the AHA, the new Medicare X proposal is just another take on Medicare for all. “It is not practical to disrupt coverage provided through employer-sponsored plans that already cover more than 150 million Americans,” he said in a statement. ”America's hospitals and health systems remain committed to working together with policymakers to help expand coverage and reduce costs for all Americans. However, a 'Medicare for All' approach would impede, not advance, our shared goals.”
Bennet and Kaine issued a statement defending the proposal: “Our goal is to ensure that all Americans—especially those living in rural areas with few insurance options—can receive the care they need. It shows completely misplaced priorities for these groups to attack our commonsense proposal to expand health care at a time when President Trump has proposed slashing health care programs that are critical to their patients.”
A staffer emphasized that the bill was intended to help people who live in areas—largely rural—in which the individual markets have not succeeded in competition or have failed altogether, and also challenged the study's assertion that all states expanding Medicaid is not a fair characterization.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
