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Healthcare providers react to Affordable Care Act

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LAKE COUNTY – Mission Valley healthcare providers say they have seen mixed results to their bottom lines and overall method of service delivery after the mandatory implementation of the federal Affordable Care Act went into place in 2014.

The major overhaul of the national healthcare system implemented a number of new requirements and regulations for the industry and individuals, including a major provision that stipulates most Americans have health insurance or face a tax penalty of up to $285 for filings on 2014 income or $975 per person for 2015 filings. The maximum fee will increase every year.

The provision that people enroll in a healthcare plan was lauded as a pivotal part of the legislation, and a year before the implementation of the measure, local officials were cautiously optimistic that the bill might help slow down the uncompensated and charity costs that were hitting the bottom lines of area hospitals particularly hard. Uncompensated and charity care costs result when individuals are unable to pay their bills and the hospital is forced to eat the loss.

Since the implementation of the legislation, St. Luke Community Hospital in Ronan has actually seen a rise in the amount of care provided at no charge because individuals can’t pay. CEO Steve Todd said this year’s charity care costs were expected to hit  $3.8 million , up significantly from $3.5 million last fiscal year.

“Those costs have to be picked up somewhere,” Todd said. “It’s one of those things that can lead to challenges in terms of the needs of rural hospitals.”

Todd couldn’t say exactly why the costs had gone up, but speculated that enrollment in insurance programs might not have been as much as predicted.

Todd said the new system has some significant tax benefits for Native Americans and low income individuals.

“Unfortunately, at this point, there aren’t a significant number of people who are enrolling and using that benefit,” Todd said.

Local hospitals may have suffered some loss in potential income because the 2013 state legislature failed to implement a key part of the federal government’s plan to expand Medicaid.

“The poorest of the poor are basically not assisted with the exchange because they are supposed to be part of the system that was created by Medicaid expansion,” Todd explained.

The Medicaid expansion plans for each state offered federal monies that would cover the cost of care for low-income individuals stuck in a gap between being too wealthy to qualify for coverage on the healthcare exchange, but still unable to fall under state Medicaid programs that deliver services to the poorest of the poor. The federal government offered to pay the entire cost of the expansion through 2016, with the state having to fund 10 percent of the cost of expansion through years 2016 through 2020.

The legislature is expected to debate expansion again in the ongoing 90-day session that began Monday, but the issue has largely been split along party lines pertaining to cost. Governor Steve Bullock’s office has projected expansion of the program will save taxpayers $7.7 million over three years, but the state’s Legislative Fiscal Division estimated that expansion would actually cost taxpayers $99.7 million for the same amount of time.

As the lawmakers gear up for debate, Lake County might be losing out on potential economic growth. The Montana Budget and Policy Center estimates 2,378 adults were in the coverage gap in 2013 in Lake County whose enrollment in Medicaid could have spent $18,548,400 on healthcare if they had been covered. The organization also projected the county could see an additional 480 jobs created if Medicaid were expanded, resulting in an additional estimated $19,829,000 spent on wages.

But additional employees can also create additional costs for employers.

To pay for those covered by federal subsidies, the new law places a $63 annual tax on each individual covered by insurance policies. The employer pays the tax, so for a business like St. Luke, with more than 400 employees covered with their families, costs add up.

“It’s significant,” Todd said.

At St. Joseph Providence Medical Center in Polson, CEO James Kiser said the hospital has seen an opposite impact in the past year. The number of self-pay individuals not covered by insurance has decreased from 8.8 percent to 5.5 percent.

Hospital officials also think more people might be enrolling in Medicaid in Polson despite the expansion. In the past year, the hospital has seen a1.5 percent decline in commercial insurance usage, but a 4.5 percent increase in Medicaid usage.

“We have theorized that at least indirectly the ACA had some impact as community members looked into whether or not they qualified for the exchange,” Kiser said in an email. “They may have been made aware that they qualified for Medicaid.”

Some other elements of care delivery have also changed under the new law.

Hospitals are required to digitize records. Both Todd and Kiser pointed out the benefits of having an electronic healthcare delivery system. It is easy to cut down on duplicated paperwork and transfer records, but it is also creates more work for doctors.

Todd noted that where doctors used to have face-to-face interaction with patients, there is now more face-to-screen interaction as physicians enter notes on a computer screen while the patient is in the examination room. 

Some doctors don’t like the new interface, Todd said.

“They have adjusted,” Todd said.               

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