What’s Driving the Crisis?

Expiration of ACA Tax Credits

If enhanced tax credits which act as subsidies for health insurance end, rates on the Affordable Care Act exchange are going to double, triple, and in some counties, quadruple.  Many Pennsylvanians will be unable to afford those increases and will simply lose coverage. That means increased numbers of uninsured, delayed medical care, and financial strain on families. Hospitals will bear the burden of caring for a lot more patients who have no insurance, and will see their reimbursements go down.  Many will be forced to scale back, and some will close.

Medicaid Cuts

Medicaid provides health coverage for thousands of Pennsylvanians, and supports the hospitals that treat them.  Medicaid expansion extended Medicaid coverage to hundreds of thousands of people, providing essential coverage for Pennsylvania’s working families.

New requirements and funding cuts to both traditional Medicaid and Medicaid expansion that were passed by Congress will put up barriers that will cause hundreds of thousands of eligible people to lose coverage, pushing more patients onto emergency rooms and leaving hospitals with greater amounts  of uncompensated care. 

Medicaid already only pays Hospitals 71% of the cost of care for every Medicaid patient they see.  These changes will lead to an even lower rate of reimbursement – 64% of the cost of care.  Hospitals simply cannot afford that.  And the mechanism that has been in place to supplement funding for Hospitals with high percentages of Medicare and Medicaid patients – Disproportionate Share Funding (DSH) – is also set to be cut, to the tune of $24 Billion over the next few years.

Shrinking Coverage and Lost Funding for Hospitals

In sum, cuts to the ACA premium subsidies and to Medicaid add up to:

• 450,000 Pennsylvanians losing insurance
• $4.5 Billion in Federal funding for Hospitals being cut

Greater numbers of uninsured and lost funding will have the following impact

• Pennsylvanians who still have insurance will see their insurance premiums spike.

• Rising levels of uncompensated care for hospitals.

• Hospitals losing critical revenue.

• Staff layoffs and reductions in services.

• Worse staffing.

• Hospitals being sold, consolidating into larger systems, and closures.