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The Affordable Care Act & State Budget

The Affordable Care Act & State Budget

February 2017

Two topics I want to share a little bit about are the potential repeal and replacement of the Affordable Care Act (or repeal without replacement depending on who you listen to) and the lack of a state budget here in Illinois right now. If there are things I am tired of hearing about, it is these two topics.

As the administration in Washington changes, we hear a lot about how the Affordable Care Act will be repealed, with or without replacement. First of all, over the past several years there has been so much work done from regulators and hospitals alike, to comply with the ACA that there are certain aspects of the plan that cannot be repealed. It would require an absolute about-face from the way things have recently been going. Secondly, there are also parts of the plan that are extremely popular but costly, i.e., coverage for those with pre-existing conditions and children staying on their parents’ plan until the age of 26. It has been mentioned these are two aspects of the plan that would not be repealed. However, if you are going to retain these costs, you must have other aspects of the plan that generate revenue to offset these costs. The Illinois Hospital Association is actively advocating against a repeal of the ACA without an adequate and simultaneous replacement. Nationwide the ACA has provided insurance coverage for some 20 million people, including one million in Illinois. All the hospitals in Illinois recently received a letter from the U.S. Senators from Illinois – Richard Durbin and Tammy Duckworth – asking what the impact would be on the hospital if the ACA was repealed without a replacement. This is a big issue and will be for a while. Therefore, we are certain to hear much more bantering back and forth before any definitive movement is made on this, so we must continue to watch this closely.

As far as the State of Illinois Budget goes, there has been very little progress in establishing a state budget for about two years, and from some interested parties, the word is we could go the Governor’s entire first term without a budget. Last week the state government adjourned without a state spending plan established for this current fiscal year. Although there has been talk and perhaps a little movement in setting aside funding to pay off some of the backlog of bills at the state level, e.g., paying for state government operations, supporting human services and higher education, and paying for the state group health insurance. At RCH we are fortunate that we have the financial stability to handle the slow and low reimbursement from the state for Medicaid payments and the state health insurance program. However, I know there are hospitals in Illinois that desperately need these payments, with the state owing smaller facilities several million dollars and the larger facilities upwards of 100 million. This is another endeavor that will be slow moving, and we will watch to see the impact it continues to have on so many agencies in Illinois.