With talks of an Obamacare repeal getting louder–and more certain–as Republican congressional leaders have promised under the new administration, uncertainties about the future of its many beneficiaries are raised as well. Medicaid is just one of the systems that will be affected should the Repeal & Replace program finally take place. While the White House has given previous reassurance that Medicaid will not be cut off, the proposed restructuring could still end up doing exactly just that.
The Relevance of Medicaid Changes Prior to the implementation of Obamacare, Medicaid was mostly availed of by pregnant women, parents, disabled, the elderly and low-income children. Under Obamacare, Medicaid was expanded to include individuals who would not otherwise have been able to afford private insurance, but also were not deemed low-income enough to qualify for Medicaid. Said Medicaid expansion was made optional per state. As of last count, 31 states have joined in the expansion, including the District of Columbia. The acknowledgment of this so-called gray area in the insurance demographics has so far represented as much as 17 million people from the time Obamacare was rolled out in 2013. . In 2015 alone, total Medicaid spending was at $552 billion, which comprises a very significant 17% of overall health spending. This makes it one of the top spending components of state governments, alongside education. How Will Obamacare Repeal Affect Medicaid? To put it simply, an Obamacare repeal will mean a consequential rollback of the Medicaid expansion as well. This means that millions of people enrolled through the expansion will now be rendered insurance-less once more. At the rate things are going, even alternative subsidies for healthcare insurance to help lower-earning and even middle-income people are at risk of being repealed too. In its stead is an idea for block grants to be provided to states, which will then be based on the amount that they do spend on the program. The other option would be a per-capita allotment, which the federal government would provide depending on the number of Medicaid enrollees there are in the state. These proposals for Obamacare replacement have yet to be threshed out, however, and fear of having a deep void in the healthcare system upon the expedited repeal of the Obamacare becomes highly legitimate. How Will Medicaid Changes Affect Hospitals? According to industry analysts, it is the hospitals that will bear most of the brunt of the effect of changes that will be made to Medicaid in the event that Obamacare is indeed repealed. From their projections, a repeal of Obamacare would render as much as 19.7 million people without insurance, while the proposed changes to the system, including Medicaid block grants will further add as much as 5.5 million to the uninsured demographics. What these losses mean for hospitals is worth billions, literally, as $1.057 billion in revenue are expected to be lost. This revenue was primarily earned by the hospitals when Medicaid days were increased across the board covering the years 2013 to 2015. The 31 states that have signed on for Obamacare are most specifically the ones that can expect the most backlash from the law’s repeal. The greater the number of enrollees they have in their state, the bigger their financial loss is projected to be. Savings could also be possibly affected as state public insurance programs could also be rendered inapplicable. With all of these fiscal changes expected in the coming days, it seems that the only relief healthcare institutions can rely on amidst the brewing and escalating uncertainties is the presence of reliable revenue cycle management services. More than ever, this will be pivotal in the resilience of the hospital systems, especially in light of possible changes that will surely shake the foundations of the country’s healthcare system to the core. Sources: With Medicaid Changes Likely, Ideas Surface to Care for Poor. Greenville Online. What Obamacare Repeal Could Mean for Medicaid: Quick Take Q&A. Bloomberg.