GOP health bills would cost Oklahoma rural hospitals millions, study says
Oklahoma City — The U.S. Senate is expected to vote on a health care plan Tuesday that could cost Oklahoma hospitals millions in lost revenue.
The Senate is expected to take up the American Health Care Act, the House's plan to repeal and replace the Affordable Care Act. Oklahoma hospitals would lose more than $25 million after one year under the AHCA, according to projections from the Chartis Center for Rural Health. The center is part of a nonpartisan health care consulting group.
The bill would set a specific amount of federal funding states would receive for each Medicaid enrollee. The rate would grow more slowly than medical expenditures typically have, however, effectively cutting the federal share of patients' care over time.
A Republican staffer, who spoke on condition of anonymity, said senators likely will either replace the House bill with the Senate's Better Care Reconciliation Act or with a plan that would repeal some elements of Obamacare in two years. Oklahoma rural hospitals would lose about $23 million under the Senate version in the first year, according to the Chartis report.
Any additional cuts from the federal government would further chip away at Oklahoma's rural hospitals, which already are in financial straits, said Andy Fosmire, vice president of rural health at the Oklahoma Hospital Association. Out of Oklahoma's 65 rural hospitals, 53 are running deficits and will have to dip into their reserves to treat patients and pay employees, he said.
“Reducing the ability of those hospitals to be reimbursed would only put them under further strain,” he said.
It isn't clear whether Republican leadership will have the votes to move a bill forward on Tuesday, however. The bill would fail if more than two Republicans voted against it or were absent.
If the vote succeeds, however, senators will be able to pass the House bill as is, heavily amend it or replace it with a different plan.
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A spokesman for Oklahoma Republican Sen. James Lankford said the senator wouldn't issue a statement on the House bill Monday because of ongoing work related to it.
A statement from Republican Sen. James Inhofe's office said the Affordable Care Act, better known as Obamacare, caused insurance premiums to skyrocket and four Oklahoma hospitals to close.
“Obamacare has been disastrous for Oklahoma's rural hospitals,” he said in a written statement. “We must begin debate of the bill to repeal Obamacare so that we can replace it with a better law that actually improves health care options in our state.”
Oklahoma's rural hospitals have taken hits from multiple directions, Fosmire said. The ACA cut some Medicare payments, with the idea that more patients would be covered through Medicaid. Oklahoma elected not to expand Medicaid, leaving hospitals to take the cuts without the new revenue to offset it, he said.
“Oklahoma hospitals kind of got a double whammy,” he said.
Hospitals also had to absorb 2 percent losses from sequestration, a set of across-the-board cuts to federal spending in 2013, Fosmire said. The state also made cuts to Medicaid reimbursements in 2010, 2015 and 2016, making its reimbursements some of the lowest in the country, he said.
More cuts could force some rural hospitals to close their doors, Fosmire said.
“There just gets to be a certain tipping point where they can't maintain their operations without the funds,” he said.
The report assumes that states won't replace their lost federal Medicaid funds or find a way to shift significant numbers of recipients to private insurance. If those assumptions are correct, the report estimates Oklahoma hospitals' profit margins will fall between 0.5 percent to more than 3 percent, depending on how many Medicaid patients they treat.
The 81 hospitals not in major metropolitan areas already are running about 6.2 percent short of covering their costs, according to the report and would fall 7.6 percent short under AHCA. The hospital association, however, doesn't consider all of the 81 hospitals in the report to be rural.
Health care reform alphabet soup
• ACA: The Affordable Care Act, otherwise known as Obamacare. Under the ACA, current Medicaid rules would continue, with the federal government paying a certain percentage of the cost to cover qualifying people, like low-income pregnant women, children and people with disabilities. As the cost of caring for recipients increases, so does the amount both the federal and state government pay.
• AHCA: American Health Care Act, or the House repeal bill. Under AHCA, states would receive a set amount to cover each person in their Medicaid programs. The amount would be different depending on the reason the person qualified for Medicaid, so states could receive more for elderly people than for children, for example. The per-capita funds would rise with the inflation rate for medical goods and services. Medicaid costs have typically risen faster than the inflation rate, however, which would leave states on the hook for extra costs.
• BCRA: Better Care Reconciliation Act, or the Senate repeal bill. BCRA is similar to AHCA because it sets a per-capita amount the federal government will pay for Medicaid recipients. One major difference is that in 2025, it would switch from raising payments based on the medical inflation rate to using the inflation rate for all goods. The cost of medical services typically rises much faster than overall inflation, so states would have to pay an increasing amount of their residents’ Medicaid costs.
Compiled using analysis from the Kaiser Family Foundation