Love it or hate it, the Affordable Care Act has helped Maine’s hospitals stay solvent, and experts fear its repeal could make it hard for some of them to avoid cutbacks and even closure.
President Trump and the Republican-controlled Congress have vowed to repeal the law, also known as Obamacare, but it’s unclear whether they will replace it with a viable and comparable alternative. On Monday, Maine’s senior U.S. senator, Susan Collins, will reintroduce an alternative plan she co-sponsored in 2015 that would allow states to opt for other solutions, but its prospects are unclear.
Absent a comparable alternative, an ACA repeal would leave 80,000 Mainers who receive health insurance through its exchange without coverage. Some would presumably find alternate coverage, but tens of thousands would not be able to afford it, meaning big losses for Maine’s hospitals and clinics, which are obligated by state law to provide “medically necessary” care to those unable to pay.
“We’re all worried,” says Jeffrey Austin, vice president of government affairs at the Maine Hospital Association, who estimates that the state’s hospitals receive $200 million a year from ACA-subsidized insurance policies. “The average operating margins in Maine hospitals are about 1 percent. There just isn’t room for dramatic negative impacts.”
The Washington Post reported late Friday that Trump had signed an executive order giving federal agencies broad powers to unwind regulations created under the Affordable Care Act, including enforcement of the penalty for people who fail to carry the health insurance that the law requires of most Americans.
FEW PATIENTS HAVE COMMERCIAL INSURANCE
Maine’s rural hospitals are particularly vulnerable to the negative effects of repeal because, apart from the ACA, few of their patients have commercial insurance. Many have Medicare, the federal program for the elderly, and some have MaineCare, the state’s version of Medicaid, which covers the very poor, but hospitals say the payments they receive from those programs don’t cover their costs. The rest have no insurance at all, but under state law must be given medically necessary treatment if their incomes are less than 150 percent of the federal poverty level and under federal law must provide emergency treatment to everyone.
“The extent to which we’re challenged by bad debt and charity care presents significant problems,” says Katie Fullam Harris, senior vice president for public relations at MaineHealth, the state’s largest health care network, with hospitals and acute care centers in seven counties. A full ACA repeal, she says, would dramatically increase the number of uninsured and underinsured, and cost MaineHealth nearly $1 billion over the next decade, with serious consequences.
A study released Friday by the Maine Center for Economic Policy estimates that if the ACA is repealed, uncompensated care costs to Maine hospitals would triple to $475 million in 2019. Revenues would also decline by $560 million, the study estimated, as the underinsured avoided or were priced out of treatments, creating a total hit of nearly $1 billion statewide.
That’s a significant number in a state whose three tertiary care hospitals – Maine Medical Center in Portland, Eastern Maine Medical Center in Bangor, and Central Maine Medical Center in Lewiston – had total combined revenues of $2.8 billion in 2014.
“There would have to be substantial changes to the infrastructure and the way that health care services are delivered in the state of Maine,” Harris says. Although she and other hospital industry officials avoided specifics, some agreed that they would include staff layoffs, the closure of hospital departments and termination of services, and even the possible failure of some hospitals.
LOSSES CONCENTRATED IN RURAL TOWNS
In fiscal year 2016, five of MaineHealth’s seven local health care systems ran in the red, including the networks serving much of York, Knox, Waldo, Franklin and western Oxford counties. Only Maine Medical Center in Portland, Lincoln Health in the Damariscotta area and Western Maine Health, based around Stephens Memorial Hospital in Norway, made money – despite the fact that the network primarily serves the more affluent third of the state.
Officials at two hospitals in more remote parts of the state – Down East Community Hospital in Machias and Cary Medical Center in Caribou – declined and did not respond to interview requests, respectively.
Statistics on ACA marketplace enrollments in Maine show those who could potentially lose their insurance are disproportionately concentrated in rural towns that also have a high proportion of self-employed individuals. The program is most heavily used in logging or fishing communities like Greenville Junction, Pemaquid, North Haven, Vinalhaven and Round Pond (where more than a fifth of all residents are insured via Obamacare) or Beals, Stratton, Brooklin, Sedgwick, Chebeague Island and Stonington (where 1 in 6 is insured through the ACA).
Most larger towns and cities had an Obamacare-insured rate of only 3 percent to 5 percent, including Bangor, Lewiston, Auburn, Augusta, Waterville, Westbrook and Biddeford. Portland’s rate is 9.3 percent.
PAYMENT MIX WOULD CHALLENGE HOSPITALS
Maine hospitals and clinics are already under stress for a variety of reasons. Maine is the most elderly state in the nation, and older people typically require more frequent and expensive care. Gov. Paul LePage declined to expand Medicaid eligibility under the ACA, which would have greatly reduced the number of uninsured patients they treat.
The poor state of the economy – especially in the so-called “rim counties” of western, northern and far eastern Maine – means there are fewer workers with employer-sponsored health insurance. This is happening at the same time many surgical services are being concentrated at larger hospitals, reducing inpatient use and revenues.
“As mills close and large employers leave, one of the things they take with them is commercial insurance coverage for the local population,” says Austin of the Maine Hospital Association. “What’s left is Medicare, Medicaid and the uninsured, and it’s very difficult to survive with that payer mix.”
Gordon Smith, executive vice president of the Maine Medical Association, which represents the state’s physicians, says for these reasons a repeal of the ACA without a comparable replacement would be “as devastating to Maine as any other single state.” And he’s not optimistic about the outcome in Washington, D.C., under Trump’s nominee for Health and Human Services secretary, Tom Price, a longstanding critic of Obamacare.
“Nobody thinks Secretary Price and others are going to have a system that’s highly dependent on public sources (of funding). They’re talking high-risk pools and health savings accounts,” he says. “People will have ‘universal access’ to health insurance, but they’ve always had that, if they could pay for it.”
MORE OUT-OF-POCKET COSTS AND BAD DEBT
Andrew Coburn, a nationally recognized expert on rural health at the University of Southern Maine, agrees the road ahead will likely be difficult for Maine hospitals. “If you take what has been proposed before on the Republican side, you have to assume that replacement plans offered will be less generous, with fewer subsidies, higher deductibles and more co-insurance,” he says. “The impact on hospitals will be more and more, these out-of-pocket costs will have to be borne by the hospitals as bad debt or charity care.”
The Maine Hospital Association, the Maine Medical Association and MaineHealth all say they have been closely engaging Maine’s four-person congressional delegation, imploring them to ensure that if the ACA is repealed it is replaced with something that provides comparable insurance to the 80,000 Mainers currently covered.
Maine’s U.S. senators split on a vote Jan. 12 that cleared the way for the ACA to be repealed with a simple majority rather than a filibuster-proof one, which would have potentially allowed the Senate’s minority Democrats to block the effort. Sen. Collins voted for the measure, independent Sen. Angus King against.
The text of Collins’ replacement bill – to be introduced Monday by her Republican colleague Bill Cassidy of Louisiana – hasn’t been released but it is modeled on the 2015 Patient Freedom Act, which allowed states to either keep using the ACA or to instead divert their federal subsidies to fund their own state exchange programs or to residents’ health savings accounts. Her office did not respond to an interview request.
Colin Woodard can be contacted at 791-6317 or at: