Hospitals Look to Health Law, Cutting Charity

From The New York Times:

Hospital systems around the country have started scaling back financial assistance for lower- and middle-income people without health insurance, hoping to push them into signing up for coverage through the new online marketplaces created under the Affordable Care Act.

The trend is troubling to advocates for the uninsured, who say raising fees will inevitably cause some to skip care rather than buy insurance that they consider unaffordable. Though the number of hospitals tightening access to free or discounted care appears limited so far, many say they are considering doing so, and experts predict that stricter policies will become increasingly common.

Driving the new policies is the cost of charity care, which is partly covered by government but remains a burden for many hospitals. The new law also reduces federal aid to hospitals that treat large numbers of poor and uninsured people, creating an additional pressure on some to restrict charity care.

In St. Louis, Barnes-Jewish Hospital has started charging co-payments to uninsured patients, no matter how poor they are. The Southern New Hampshire Medical Center in Nashua no longer provides free care for most uninsured patients who are above the federal poverty line — $11,670 for an individual. And in Burlington, Vt., Fletcher Allen Health Care has reduced financial aid for uninsured patients who earn between twice and four times the poverty level.

By tightening requirements for charity care, hospital executives say, they hope to encourage eligible people to obtain low-cost insurance through the subsidized private plans now available under the law.

“Do we allow our charity care programs to kick in if people are unwilling to sign up?” said Nancy M. Schlichting, chief executive of the Henry Ford Health System in Detroit. “Our inclination is to say we will not, because it just seems that that defeats the purpose of what the Affordable Care Act has put in place.”

 

In the past, Southern New Hampshire Medical Center generally provided free or discounted care for patients who were at or below 225 percent of the poverty level, or about $26,260 for an individual. But starting this year, only patients below the poverty level will receive such charity care, said Paul Trainor, the system’s vice president of finance.

Patients “who refuse to purchase federally mandated health insurance when they are eligible to do so will not be awarded charitable care,” the hospital’s revised policy states.

 

The financial challenges are particularly daunting in the more than 24 states that have not yet expanded Medicaid, including Missouri. The Affordable Care Act reduces federal aid for uncompensated care on the assumption that hospitals would replace much of the lost income with payments for patients newly covered by Medicaid.

But the Supreme Court in 2012 gave states the right to opt out of the expansion. Now hospitals that treat the poor and uninsured in states like Missouri are losing federal aid without getting new Medicaid payments, a problem they say is threatening their bottom lines. Robert Hughes, the president and chief executive of the Missouri Foundation for Health, an independent philanthropic group, said BJC HealthCare was “in a tough spot” because of the state’s refusal to expand Medicaid.