Hospitals lobby against repeal of insurance program

Hospitals are lobbying Congress to maintain the current federally-based mortgage insurance system for  inpatient facilities, AHA News Now reported.

According to a letter that American Hospital Association Executive Vice President Rick Pollack sent to Rep. Jeb Hensarling (R-Texas), chair of the House Financial Services Committee, the AHA opposes pending legislation in the House of Representatives that would repeal the Section 242 program, which has been in effect since 1968. The program has insured more than 400 hospital construction projects in 43 states over the past 45 years.

Operated by the U.S. Department of Housing and Urban Development, the program has been a lifeline in recent years as financially strapped hospitals have looked to refinance their debt loads.

The repeal of Section 242 is part of legislation that would better insulate the federal government from having to provide financial bailouts during the natural catastrophes.

"The 242 program is often a last resort for communities seeking to maintain access to
urgently needed hospital services when no other source of affordable financing is available...(it) maintains one of the best claim records in the FHA mortgage insurance portfolio...program revenues historically have significantly exceeded program insurance claims," Pollack wrote. He added that three temporary program enacted in the wake of the 2008 financial crisis expired in 2010.

Should the program expire, Pollack warned it could lead to hospital closings and would negatively impact the communities they serve.

The bill, H.R. 1101, remains in committees and has yet to be voted on by the full House.

To learn more:
- read the AHA News Now article
- check out Rick Pollack's letter (.pdf)