If the AHCA becomes law, more uninsured people could crowd the country's ERs and rack up impossible-to-pay medical bills—which would be bad for patients, hospitals, and taxpayers.
In late 1984, 59-year-old Dallas resident Ward McDonald fell off a roof he was working on, suffering a compound fracture in his hand and breaking his ankle so badly that his foot was almost severed. He was taken to the nearest hospital, Charter Suburban, a private facility. The ER intake staff's first question was whether he had insurance.
He didn't—he'd lost it two years earlier when he was laid off. So the hospital refused him service, sending him 30 miles away to Parkland Memorial, the nearest public hospital. The bill ended up being $18,000. McDonald, of course, couldn't pay. Parkland Memorial and taxpayers absorbed the cost, as is the case whenever medical bills go unpaid at a public hospital.
Cases like that one, documented in a March 1985 60 Minutes segment, led 20 states to pass laws that year requiring that hospitals treat patients with emergency conditions. The next year, after mounting public pressure, President Ronald Reagan signed the Emergency Medical Treatment and Labor Act (EMTALA), which made that requirement national.
Since then, this reality has undergirded all debates about healthcare in America: If people are uninsured, they're still able to get treated at emergency rooms. But when they do, they face massive bills that they often can't pay—a situation that sends patients into debt and often forces taxpayers and the insured to eventually pick up the tab.
Since the Affordable Care Act (ACA) became law in 2010, Republicans have argued that the government shouldn't force people to buy insurance. That mirrors what Trump voters say—a series of Kaiser Family Foundation (KFF) focus groups with them found that most view the individual mandate as "un-American." But they were also not sure what specific reforms they would support. "What they want are pragmatic solutions to their insurance problems," wrote the KFF.
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The American Health Care Act (AHCA), the Republican replacement to the ACA backed by Trump and House Speaker Paul Ryan, would wipe out the individual mandate as part of a stated effort to bring more freedom, choice, and capitalism into the healthcare system, which conservatives believe has been taken over by socialism.
"There are two ways of fixing healthcare," Ryan said in a speech. "Have the government run it, and ration it, and put price controls. That's what Obamacare does, that's what the left wants… Or do what conservatives have been arguing for, for years. Have a vibrant free market where people get to do what they want, they buy what they want."
But that argument doesn't address whether it's fair to force hospitals to treat people who either can't afford or choose not to buy health insurance, and for taxpayers to subsidize those costs. Not even libertarians like Rand Paul or the right-wing House Freedom Caucus have proposed going back to the days when hospitals could withhold emergency treatment from those who can't pay. Ed Gaines, a member of the American College of Emergency Physicians' reimbursement committee, told me he's glad that Congress passed the EMTALA. "But it's the largest unfunded mandate in healthcare," he added.
Most unpaid emergency room treatment bills are covered by taxpayers. In 2013, the year before the ACA fully kicked in, Kaiser crunched the numbers and determined that the total cost of unpaid ER bills that year came to about $85 billion. Sixty percent of that cost was absorbed by hospitals, and most of the rest was paid for community providers like clinics and health centers and individual doctors.
Taxpayer money reimbursed a huge chunk of this cost—about $33 billion from the federal government and $20 billion from state governments. The federal share alone is 33 times higher than the cost of the Corporation for National and Community Service, 74 times that of the Corporation for Public Broadcasting, and 220 times the National Endowment for the Arts funding level. (All of those programs are slated for elimination under the Trump administration's proposed budget.)
The ACA lowered those bills—by the end of 2014, the cost of uncompensated care to the federal government had dropped by 21 percent. Two-thirds of those savings came in states that expanded Medicaid coverage, as allowed under the ACA. (Unpaid ER bills, including those resulting from "surprise" charges patients face after not realizing their insurance didn't cover some treatments, remain a problem.)
If Ryan's AHCA passes, however, unpaid medical bills likely will balloon. The Congressional Budget Office projects that 14 million fewer people will have insurance by 2018, a number that will rise to 24 million by 2026, if the AHCA becomes law. The CBO didn't calculate how much that would increase the free-care burden. But a study by the Urban Institute in January estimated that if 30 million people lost insurance under a Republican plan, it would almost triple the amount of uncompensated care.
Even under the CBO's smaller uninsured number, the cost of uncompensated care is sure to rise by a lot, study co-author Matthew Buettgens told me. And federal and state governments won't pick up much of those additional losses, he added.
Instead, they'll be absorbed by hospitals, community health centers, and individual doctors. More than 70 percent of US private hospitals are nonprofits, and each additional uninsured person costs them $900 a year, according to a 2015 study by Craig Garthwaite, who helps direct a health enterprise management program at Northwestern University's business school. A Bloomberg Intelligence analysis calculated that hospitals' earnings would drop as much as 6 percent under the Republican law.
That will create another set of problems, according to experts. More financial losses by health providers means lower-quality healthcare for everyone, particularly in lower-income areas. Unpaid bills could mean hospitals invest less in facilities, staff, and equipment, said Kaiser's Rachel Garfield.
Maybe more worryingly, some hospitals won't survive, period—many hospital emergency departments are hanging on by a thread, said Gaines. Among the ERs that do make it, more will be staffed with physicians' assistants and nurse practitioners (called "advanced-practice providers") and fewer ER doctors to save money, he said.
"People should care because hospital emergency departments are the safety net for the entire country," Gaines told me. "And that safety net is very vulnerable to even modest changes in reimbursement."
Those realities are what have long made healthcare impossible to reconcile with a true free market—as Garthwaite has pointed out, grocery stores aren't required to give free food to people who need it, though the government does help people buy basic needs via food stamps. Hospitals are often trapped between the legal (and moral) requirement to save lives by providing treatment, and their need to make enough money to survive. The Republican reform doesn't solve that problem—it makes it worse.
Steven Yoder writes about criminal justice and domestic policy issues. His work has appeared in Salon, Al Jazeera America, the American Prospect, and elsewhere. Follow him on Twitter.