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Republican health plan could threaten Md. hospital system

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Dr. John Chessare, president of Greater Baltimore Medical Center, said more focus is needed on advanced primary care and less on waiting until patients get to the hospital. “If you remove coverage, patients are just going to arrive in the hospital quicker,” he said. (Maximilian Franz)

The health care bill drafted by U.S. Senate Republicans  could threaten how hospitals in Maryland do business by ending Medicaid expansion and cutting subsidies for the individual insurance market.

Under Maryland’s all-payer system, hospitals encourage more primary care services and work to decrease hospital visits and readmissions. But if more Marylanders lose insurance, hospitals could see more visits.

“We need to focus more on advanced primary care and less on waiting until patients get to the hospital,” said Dr. John Chessare, president of Greater Baltimore Medical Center. “If you remove coverage, patients are just going to arrive in the hospital quicker.”

The Maryland all-payer hospital system, formerly known as the Medicare waiver, receives its authorization from part of the Affordable Care Act (ACA) as a demonstration project. Neither the Senate bill nor the House bill passed last month would explicitly affect the program.

But cuts to Medicaid and changes to the ACA’s individual exchange markets could hamper the program.

“The loss of broad-based coverage also jeopardizes Maryland’s unique hospital payment system, which has benefited the state, insurers, patients and communities by shifting from volume-driven to value-driven care,” Maryland Hospital Association President Carmela Coyle said in a statement. “But without appropriate health care coverage, this shift, which is containing costs as well as improving care, is unsustainable.”

Starting in 2021, the GOP bill would start to phase out Medicaid expansion by providing less money to the states. At the same time, funding would switch to a per capita block grant system, reducing funding from that would have been available under the ACA.

Replacement costly

Maryland could replace the funding itself, but that would be costly.

A January report by Maryland’s non-partisan Department of Legislative Services estimated that under current law, the state’s share of spending for Medicaid expansion would be $350.2 million in 2021. But the total cost of the program will be $3.5 billion that year.

The Republican plan also reduces subsidies for people to buy insurance on the health insurance market, as well as eligibility for those subsidies.

Currently, those under 400 percent of the poverty line qualify for some federal subsidies. The plan would reduce that to 350 percent of the poverty line.

It would only allow the subsidies to go towards skimpier health plans than currently allowed under the ACA.

The results of the smaller subsidies and declining Medicaid expansion could leave more in the state uninsured.

“Reductions of this magnitude dramatically reduce hospitals’ ability to get people the right care, at the right time, in the right setting, which in turn reduces people’s chances to live healthier lives,” Coyle said.

‘A shell game’

But the plan could also drive up costs for sicker people who have to stick with the insurance. To deal with that, it provides funding for high risk pools, but Chessare said that would not be much of a solution.

“That’s kind of a shell game,” he said. “You’re not really changing the cost at all. You’re just pushing all of the costs of the people with pre-existing conditions into one big pot. It doesn’t do anything to change the fact that somebody has to pay for their care.”

The ramifications for the change could extend beyond health care outcomes. The state’s health care sector powers a significant portion of Maryland’s economy.

“The result: as unfunded federal costs are shifted to the state, hospitals, which together are our state’s largest private sector employer, as well as the state’s entire economy, would be placed at severe risk,” Coyle said.

The Senate bill looks likely to change. As of press time, four conservative senators, led by Rand Paul of Kentucky, had publicly said they were “not ready” to vote for the bill as currently composed.

Moderate Republicans such as Susan Collins of Maine and Lisa Murkowski of Alaska could also object to a more rapid phase-out of the Medicaid expansion than they would like and a provision that would not fund Planned Parenthood for one year.

The Republicans can only afford to lose two votes from its 52-member majority to pass the bill.


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