Hospital Impact: Why the GOP will not repeal the Affordable Care Act in its entirety

Donald Trump
Donald Trump has vowed to repeal and replace the Affordable Care Act, but a full repeal would be politically risky given all that consumers and healthcare organizations stand to lose.
Jonathan H. Burroughs headshot

Repealing the Affordable Care Act was one of the centerpieces of Donald Trump’s anti-establishment campaign. He is right that there is much that must be fixed as a result of its rocky and non-bipartisan creation.

Generally agreed-upon weaknesses include:

  • Increased cost of healthcare insurance for those who miss the upper limit of the 400 percent federal poverty level
  • Increased cost to insurance companies that must aggregate low-cost beneficiaries with a higher risk pool, thus increasing the premium cost for all
  • The need to repurchase healthcare insurance by more than 30 million beneficiaries with insurance benefits they did not need because of the new requirements
  • Confusion and complexity for consumers sifting through the public (and private for employees) exchanges
  • Optional Medicaid expansion resulting in more than 5.7 million of our country’s poorest citizens without healthcare coverage
  • Some employers responding to the coverage mandate by cutting employee hours or choosing to pay the penalty rather than offer health insurance
  • Lack of uniform end-of-life counseling to avoid expensive and futile care
  • Resultant increased taxes for medical devices and the pharmaceutical industry, and the unpopular Cadillac Tax for high-cost policies

RELATED: Experts: ACA repeal would be complex, costly

That being said, there are fundamental benefits of the ACA that will be virtually impossible to repeal or unwind without causing irreparable damage both to the health of Americans and to the political standing of the new administration and Congress:

  • Pre-existing medical conditions and other limitations to accessing healthcare insurance

Prior to the passage of the ACA, insurance companies had the legal right to deny insurance coverage to those with significant healthcare conditions defeating the purpose of having an insurance policy for those with the greatest need. This resulted in individuals waiting far too long before seeking medical attention thus shifting the burden to hospitals and physicians to care for critically ill individuals with no insurance coverage and placing the individuals themselves at risk.

  • Solvency of the Medicare Part A trust fund

According to actuaries of the Centers for Medicare & Medicaid Services, part A of the Medicare Trust Fund (which covers hospital services) was due to become insolvent in 2017, thus placing all healthcare organizations and systems at risk. The ACA postponed this potential crisis by increasing the Medicare payroll deduction tax from 2.9 percent to 3.8 percent (shared between employee and employer) and reducing payments to healthcare organizations by more than $14.7 billion over the next 10 years. Currently, part A of the Medicare trust is due to be insolvent by 2030 and we will eventually have to come up with a long term or even permanent solution.

  • Politicized discounted fee-for-service

Fee-for-service has done great damage to the health of Americans by incentivizing high-margin interventional testing/procedures that benefit suppliers and providing little if any reimbursement for preventive care and the treatment of non-clinical determinants of care that have a profound impact on clinical outcomes. The ACA encourages innovative payment methodologies and delivery models so that the healthcare system can focus more on the preservation of health than on high-margin interventional procedures.

  • Increased access to healthcare coverage and services

As a result of the optional expansion of Medicaid and the availability of more affordable healthcare insurance coverage through the creation of public and private healthcare exchanges, there are roughly 20 million Americans who now who have healthcare coverage as a direct result of the ACA. This is beneficial to not only these individuals but also to other insured individuals who no longer have to subsidize uninsured individuals through cost shifting, and to healthcare organizations that were obligated to provide care for everyone regardless of coverage or ability to pay.

Thus, repealing the ACA would result in the following potentially devastating consequences:

  • It would reinstate the ability of insurance carriers to withhold coverage to those most in need, placing both them and the healthcare system at risk.
  • A repeal would potentially cause the insolvency of the trust fund, placing all healthcare organizations that care for significant populations of Medicare beneficiaries at risk.
  • The system would revert to a payment methodology that most agree has been damaging to the health of Americans and provides no incentives or support to healthcare organizations to engage in serious prevention or population health.
  • More than 20 million individuals would lose health insurance coverage, placing their health at risk and shifting financial risk to both insured individuals and healthcare organizations.

A new presidential and congressional administration would create a firestorm of protest by placing so many individuals and healthcare organizations in harm’s way. Therefore, they will most likely modify the many problematic areas of the law while preserving its core.

Jonathan H. Burroughs, MD, MBA, FACHE, FAAPL is a certified physician executive and a fellow of the American College of Healthcare Executives and the American Association for Physician Leadership. He is president and CEO of The Burroughs Healthcare Consulting Network and works with some of the nation's top healthcare consulting organizations to provide "best practice" solutions and training to healthcare organizations.

Suggested Articles

Premera Blue Cross will pay $6.9 million to HHS over a data breach six years ago that exposed 10 million people's health information.

United Health Group has released what it believes is the "path forward" for the healthcare industry as it charts a course for broad reform.

President Trump will sign an executive order today that declares it a national policy to protect patients with preexisting conditions.