Coverage Cuts are Looming: Don’t Face It Alone

As we step into June, the Senate is preparing for a 4-week sprint to meet the president’s July 4^th deadline for the reconciliation package. The One Big Beautiful Bill Act, or OBBBA promises to rock the healthcare landscape; the Congressional Budget Office (CBO) projects that over 16 million people will lose health coverage due to the bill’s provisions and related changes. This is largely due to increased paperwork requirements across the board for patients paired with almost $1 trillion in cuts to healthcare programs and infrastructure. The changes range from new, burdensome reporting requirements for Medicaid enrollees to manual re-enrollment hurdles for Affordable Care Act (ACA) plans. This burden also extends to providers. Changes to retroactive eligibility, redetermination checks and limitations on how states can finance Medicaid will require a seismic shift in hospital workflow – and for some hospitals, it could lead to closure. Other provisions of the bill seek to shift more people into high-deductible health plans and to purchase their health coverage independently, without renewed subsidies to make comprehensive marketplace insurance available.  

To be clear, cuts to coverage means more medical debt 

According to one estimate, the total medical debt burden could increase by $50 billion, or 10%. As the uninsured rate rises, premiums will follow suit as health systems absorb more uncompensated care. According to the Urban Institute, these numbers could reach $278 billion. As noted by American Hospital Association leadership, “This affects everyone, not only those relying on Medicaid, leading to overcrowded emergency departments, longer wait times and increased costs for care, which acts as a ‘hidden tax’ on all.” 

One key change will be the steady growth of the uninsured – many of whom will qualify for hospital financial assistance. In recent years, states have taken steps to more closely guide hospital financial assistance policies and practices and limit downstream actions such as patient lawsuits and wage garnishment for unpaid medical bills. Hospitals themselves have stepped into the void to support individuals who are underinsured, providing them with a pathway to financial assistance in the absence of affordable health coverage. Hospitals will bear the brunt of these federal policy shifts, supporting their communities through a panoply of healthcare coverage and access crises.  

There are steps that hospitals can take now to prepare 

At Undue, we partner with hospitals to relieve medical debt, and we see firsthand how complex and confusing the medical billing process is and how it harms both patients and providers. Where we see progress is when hospitals take steps to address the challenges of medical billing more holistically by collaborating with other patient-facing leaders, working on community needs and patient experience. Knowledge sharing across these groups – and their data platforms – can highlight areas for efficiency, savings and improved patient experience. For example, matching zip codes for the highest rate of financial assistance and/or unpaid medical bills can guide community benefit investment to meet unmet preventive care needs and/or supports for health insurance literacy. By meeting patients sooner in their healthcare journey and facilitating coverage access, less patients will wind up in the ER with critical needs. 

Even as hospitals, patients and various stakeholders work to hold Congress accountable, there is work to be done in preparing for an inevitable shift in practice. Three things that providers can do right now: 

1. Set up an internal team that includes leaders from revenue cycle, community benefit and patient experience to review your financial assistance policy and practice. Many hospitals are huddling right now with their revenue cycle teams, working to forecast what these federal changes will mean for balance sheets. However, they may not think to include other teams. Community benefit teams and patient experience leaders understand (and hold the data) on geographic pain points and patient perspectives. Including these teams provides a key opportunity to work more seamlessly together.  
2. Review your assets and refresh your stakeholder list. Just as revenue cycle leaders are reviewing their financial assets and forecasting needed savings, it will be important to broaden the definition of assets. Including community-based organizations, community health organizations and others that serve as a network of groups aligned in protecting patients from harm will be critical to survival. In the aftermath of coverage loss and reduced access to care, patients will need additional support that hospitals alone cannot provide. Hospitals must ask themselves, who is missing from the table? Who else do we need to support our patients? Hospitals should look for unlikely and non-traditional allies.  
3. Outreach to local foundations and other community support that can be thought and action partners in helping people bridge coverage gaps. States that have not expanded their Medicaid programs have used creative approaches over the years to meet patients falling through coverage gaps, whether by having foundations support patients by purchasing ACA plans for them or creating county-level coverage opportunities, such as local access to care programs (LACPs). There are also opportunities to build and deepen relationships with donated care networks and community health collaboratives such as those affiliated with Communities Joined in Action.

 As we draw closer to fall, we will have a clearer picture and timeline of the changes to the health insurance and healthcare system landscape. In the interim, identifying areas for synergy, partnership and strong two-way communication is the best way we can protect patients, keeping them at the center of our work.