St. Vincent Jennings Hospital and hospitals across the nation are waiting to see the effects that the Affordable Care Act will have on patient care, three years after its passage. The law goes into effect next year.
“St. Vincent has a very high standard of care for patients, for all of our patients, but it is difficult to see how we will be able to maintain the same level of care under the impending budget cuts,” Jennings St. Vincent Chief Administrator Carl Risk said.
The hospital serves more than 400 inpatients and 60,000 outpatients annually. Located in North Vernon, it maintains an around-the-clock, physician-staffed emergency room as well as inpatient rooms.
St. Vincent Jennings is part of St. Vincent Health, maintains more than 20 health care facilities throughout Indiana. St. Vincent Health is a member of Ascension Health, the nation’s largest not-for-profit Catholic health care system serving patients of all religions.
Risk said hospitals across the nation already lost $155 billion in federal subsidies in order to ensure the passage of the Affordable Health Care Act. Risk said it reduced federal subsidies for Medicare/Medicare payments by $3.6
As of April 1, due to sequester budget cuts, Indiana hospitals face an additional cut of $844 million dollars, or 2 percent of their Medicare budget, over the next 10 years.
Providing medical care to low-income people now presents a challenge for Hoosier hospitals.
Under current law, hospitals must treat patients who go to a hospital emergency room for medical treatment, regardless of the patient’s ability to pay. Individuals without insurance or income can receive treatment for minor ailments that normally would not require a visit to the hospital, which increases the hospital’s expenses without increasing income.
Previously, hospitals absorbed much of the cost of treating people who can’t or don’t pay for their own medical care. The federal government has provided hospitals with subsidies to help offset the cost of providing care to low-income patients, but the impending cuts directly affect those subsidies.
“We accepted the initial cutbacks on the promise that because of the Affordable Health Care Act we would see a greater amount of insured patients, which would reduce costs. That has not happened, and now we are facing more non-insured patients with less subsidies,” Risk said.
The Medicare Health Care System has provided health care to people older than 65 and also for people who are permanently disabled. The Medicare system will continue to provide care for seniors and the disabled under the Affordable Care Act.
Medicaid provides care for non-insured, low-income people. Currently, Medicaid is administered by individual states, and the states administer both federal and state funds for care of the low-income population. Under current law, each state is responsible for setting guidelines for eligibility in their Medicaid program.
Under the Affordable Care Act, each state will have the choice of turning the Medicaid program over to federal government or keeping Medicaid under the control of the state.
The Medicaid Expansion Program standardizes and widens requirements for eligibility to all low-income people falling below federal guidelines for poverty. In Indiana, the program would cover all individuals whose income is less than $32,500 for a family of four.
Currently, in Indiana, only low-income people who are children, parents with dependent children, pregnant women or the disabled not covered by Medicare are eligible for Medicaid assistance.
There are 40,000 low-income individuals who do not qualify for Medicaid assistance under Indiana guidelines.
In order to care for 40,000 non-qualifying low-income individuals, under former Gov. Mitch Daniels, Indiana devised the Healthy Indiana Plan (HIP). Designed to encourage individual self-responsibility, HIP is a state-subsidized, low-premium insurance policy that covers a basic level of health care expenses. HIP includes some co-pay requirements as well as the requirement to maintain a health-care savings account.
As the end of the legislative session draws near, the Indiana Legislature and Gov. Mike Pence are locked in a debate about how Indiana will move forward with care for 400,000 low-income Hoosiers.
If the legislature votes to accept the federal government plan for Medicaid expansion, the federal government promises to pay $2 billion of the full cost of a federal Medicaid expansion for the next three years and will pay 90 percent of those costs thereafter.
Hired by Daniels to do a cost estimate of the Medicaid expansion on Indiana, the Milliman firm estimated cost at $2.6 billion over the next seven years, leaving a sizable shortfall for Hoosier taxpayers if estimates are correct.
In a printed statement, the Heritage Foundation has released a statement that the cost of the “Medicaid expansion in Indiana would result in a rapid increase in spending beginning in 2017, quickly surpassing any modest savings in reductions in state payments to providers for uncompensated care. On net, the expansion would cost Indiana taxpayer $537 million through 2022.”
Republican and Democrat legislators are working toward a compromise in Indiana. A bill using the HIP as a guide in Medicaid expansion is working its way through the House. Pence has asked the Centers for Medicaid and Medicare Services to approve the use of HIP guidelines as in Indiana’s Medicaid expansion program.
As the debate continues in Indiana, members of the U.S. House and Senate are working to delay the sequester cuts that will affect Indiana hospitals.
Doug Leonard, president of the Indiana Hospital Association, said Medicare payments are already 50 to 60 percent of most Hoosier hospitals’ revenue.
The effects of the cuts could include the loss of 16,000 jobs in Indiana as hospitals are forced to trim costs.
Risk said patient care is the most important concern at St. Vincent Jennings Hospital.
“If additional cuts go through, it is difficult to see how we will be able to maintain the same level of care. We must look at the risks and plan how to move forward. We just don’t know yet how this will play out,” he said.