Obamacare defeat in King vs. Burwell could cost hospitals billions, report says

An estimated $22 billion in healthcare spending would be lost due to those losing coverage under the Affordable Care Act, according to a new report by the Urban Institute of the Robert Wood Johnson Foundation.

Healthcare spending would drop by 35 percent by patients who would become uninsured if the U.S. Supreme Court finds for the plaintiff in King vs. Burwell, according to a new report by the Urban Institute of the Robert Wood Johnson Foundation.

An estimated $22 billion in healthcare spending would be lost due to those losing coverage under the Affordable Care Act, according to the report released this month.

Hospitals would lose an estimated $10 billion.

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On the other hand, if the Supreme Court keeps tax credits in place under the current ACA law, hospital spending for 2016 is estimated at $11.1 billion, according to the report.

The report claims the newly uninsured would spend $5.3 billion on their own care, with $1.1 billion of that going to hospitals. That means hospitals would be on the hook for an estimated $3.8 billion in uncompensated care.

The Supreme Court is scheduled to hear oral arguments in King vs. Burwell on March 4. In the case, the plaintiff argues that the ACA prohibits premium tax credits and cost-sharing reductions in states that have not established their own marketplaces.

The ruling affects 34 states that use the federal insurance exchange.

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Hospitals would suffer from a significant decrease in expenditures and the rise in the demand for uncompensated care, the report states.

The current ACA method reduces Medicare and Medicaid disproportionate share hospital payments, which are historical sources of funding for uncompensated hospital care.

Under the current law, a total of $27.1 billion would be spent by 8.2 million people in 2016, according to the report. Of that, $11.1 billion would be spent on hospital care, $4.5 billion for physician services, $5.3 billion for prescription drugs and $6.2 billion for other healthcare, according to the report.

But if King wins, healthcare spending for those losing coverage would fall from the estimated $27.1 billion to $5.3 billion, according to the report. The estimated 8.2 million who would become uninsured would include 6.3 million losing tax credits for marketplace coverage, 1.2 million purchasing in non-group coverage without tax credits, and 445,000 people enrolled in in Medicaid or the Children’s Health Insurance Program.

The ruling for the plaintiff would also result in another $12 billion in uncompensated care, the report estimates, with providers funding an estimated 37 percent of uncompensated care.

Twitter: @SusanMorseHFN