Becker's Hospital Review

10 2015 YEAR REVIEW in PERSPECTIVE and not the driver. Here, the American Medical Association has lost more credibility and power to other lobbying organizations. 13. People not eligible for subsidies and tax credits. ese people i.e., a large group of Americans, have seen higher total in- surance and healthcare costs between higher deductibles and in- surance. See Sections 6 and 9 later in this piece. ey also oen bear the taxes added by the ACA. Four neutral sectors Some of the neutral parties under the ACA are as follows: 14. Safety-net hospitals. Here, we place in this context safe- ty-net hospitals. Safety-net hospitals have benefited from seeing some of the uninsured move to the insurance rolls. At the same time, pressure on reimbursement and the fact that not as many people as expected have signed up for the ACA, as well as the fact that disproportionate share payments will be reduced, leads us to put safety-net hospitals in the neutral position. is may creep further into the loser category in the next few years. 15. Innovative new companies. We are starting to see the emergence of a great number of innovative new companies that are what everybody wants to refer to as the "Uber" of healthcare. You start to see them on the East and West Coast and in other ar- eas of the country — companies like Oscar Health that are filling gaps in the healthcare system. With this eruption, there have been lots of opportunities for some of these new models to survive and thrive. We say neutral because we believe of the thousands of new companies, it is only a small percentage of them that will real- ly end up thriving and developing a market niche or the critical mass needed to survive. 16. e economy. As discussed below (see Section 5 below), the overall impact on the economy of the ACA is not yet clear. 17. e poor. For the poor (broadly defined) it's a mixed bag. In some places they have coverage they previously did not have. However, with the narrowing of networks and more physicians and hospitals limiting access for governmental patients, the poor's access to care remains limited. See "Will Narrow Networks Re- duce Choice" below. 10 other thoughts and observations 1. Health system consolidation. e costs of the ACA in terms of layoffs and transition and disruption to healthcare sys- tems have been immense. It is far more challenging for a commu- nity hospital to stay independent today than it used to be. e No. 1 concern indicated by community hospital leaders — even above healthcare reform and patient safety and quality — is financial challenges, according to a June report from iVantage Health An- alytics. Rural hospitals are particularly vulnerable to closure. Out of 2,224 assessed rural hospitals, 283, or 13 percent, were facing financial difficulties that could force them to close. Such hospitals in states that have not expanded Medicaid are under more financial pressure. e ACA has moved hospitals toward consolidation and it is not really clear whether this is a net positive in terms of cost or quality. 2. Insurance company consolidation and the impact on insurance costs. e ACA has also spurred a new round of in- surance company consolidation that is likely to create more bar- riers to entry for new insurance companies and, again, unlikely to help further reduce healthcare costs. Here, the big five of Anthem, Aetna, United, Cigna and Humana are set to become three. Fur- ther, many of the smaller insurance plans formed or developed under the ACA are struggling financially. For example, citing low payouts from the risk corridor program, nine of the 23 insurance co-ops formed under the ACA have closed or will close by the end of the year, including Health Republic Insurance of New York, the nation's largest co-op. e Wall Street Journal article "e Decline of ObamaCare" states: "MLRs measure the share of premium revenue that flows to reimbursing medical claims. ObamaCare sets an MLR floor for 80 percent for patient care, with one-fih le over for overhead like administration and profits, and the pre-ObamaCare 2010-13 historical trend for the in- dividual market ranged from 79 percent to 86 percent. e researchers found that in 2014 — the first full year of claims experience in ObamaCare — average MLRs across all health plans sold on 16 state exchanges roamed from 90 percent to 99 percent. Average MLRs in 11 states climbed to 100 percent or more, reaching as high as 121 percent in Massachusetts. A business can't stay solvent for long spending $1.21 for every $1 that comes in." e Wall Street Journal reports that health insurers selling in- dividual coverage lost an average of $163 per person in the insur- ance market in 2014. 3. Preexisting conditions. Most people are pleased that they have the ability to obtain coverage even if they have a preexist- ing condition. In the pre-ACA days, people with a serious condi- tion could not get coverage unless they went to work for a large company or they were age 65 or over or eligible for Medicaid. Previously, insurance companies maintained a long list of con- ditions that could result in an individual being denied coverage. A Congressional investigation while the ACA was still in debate uncovered more than 400 medical conditions and diagnoses that insurers used to justify a denied application for coverage, accord- ing to Wendell Potter's article "Why pre-existing conditions mat- tered… to millions," on HealthInsurance.org. Now, there is cover- age available of some sort and one does not have to take a job they don't want to have coverage. 4. Impact on jobs and economic growth. e Fiscal Times notes that the impact on jobs is unclear. Here, Aimee Picchi re- ports:

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