Hospital Associations Send Letter to Trump Outlining Consequences of ACA Repeal

The American Hospital Association (AHA) and the Federation of American (FAH) sent a joint letter to President-elect Donald Trump and Vice President-elect Mike Pence to inform them of new reports that highlight the potentially devastating effects a repeal of the Affordable Care Act (ACA) could have on community hospitals.

The letter, which outlined the findings from 2 reports by a healthcare economics consulting firm, was signed by the presidents of both associations and sent to Congressional leaders of both parties. The authors warned that widespread loss of coverage combined with continued payment cuts to hospitals “will create challenging and potentially unsustainable financial circumstances that could ultimately reduce patients’ care options.”

The AHA and FAH “strongly believe” that any repeal legislation should include provisions that maintain coverage. In the absence of such legislation, however, the authors of the letter suggest a complete repeal of the ACA, including cuts in payment to hospitals that were originally included in the law to fund coverage for the insured. They point to the “repeal and replace” legislation sponsored by Tom Price, the nominee for HHS secretary, as “an example of providing a ‘clean slate,’ which would protect hospitals from destabilizing cuts that would jeopardize access to high-quality services.”

A main concern is that a partial repeal of the ACA through the budget reconciliation process, as detailed in the bill that passed in Congress but was vetoed by President Obama in January 2016, would leave in place its reductions in hospital payments. If this approach is taken, the writers urge Trump’s administration to ensure repeal of these funding reductions and restoration of the Medicare hospital inflation update and the Medicare and Medicaid Disproportionate Share Hospital (DSH) payments cut by the ACA.

According to the first report cited in the letter, the loss of coverage resulting from ACA repeal would have a net negative impact of $165.8 billion on hospitals from 2018 to 2026. Keeping the ACA Medicare reductions in place would cost hospitals an additional $289.5 billion in inflation updates, while a restoration of the Medicare and Medicaid DSH payments would amount to $102.9 billion. The report concludes that “any repeal bill that does not replace coverage also should reverse hospital payment reductions.”

The second report cited in the letter analyzes the federal payment reductions to hospitals that had been “imposed through other Congressional and Executive Branch actions subsequent to, and independent of, the ACA.” These payment cuts total $148 billion from 2010 to 2026 on top of the ACA cuts outlined in the first report.

In conclusion, the letter asserts the hospital associations’ desire to be constructive partners in the conversation surrounding ACA repeal, and reiterates their commitment to working alongside the new administration to develop “legislation that achieves our shared goal of improving America’s healthcare system through patient-centered care.”