While our representatives in Washington debate the nuances of broader healthcare policy, uninsured Iowans are turning to local hospitals to access basic care, and they are on the hook for covering those costs. If Congress doesn’t act by the end of September, funding for the program that helps keep these hospitals open will lapse, affecting multiple hospitals that thousands of Iowans rely on.
Costs of care not covered by Medicaid, Medicare, or private insurance have a significant financial impact on hospitals. This impact is mitigated in large part thanks to the Medicaid Disproportionate Share Hospital (DSH) program, which provides crucial funding to hospitals to help offset those uncompensated care costs. Without this critical funding, hospitals might have to stop providing services, lay off staff, or raise costs.
Though the DSH program is a crucial part of keeping safety-net hospitals open and running, Congress has neglected to make funding for it a legislative priority. If Congress does not act soon, $7 billion in cuts to the DSH program will go into effect on October 1, 2019.
When the Affordable Care Act (ACA) passed, it called for a reduction in DSH program funding, with the assumption that Medicaid expansion would reduce the number of uninsured Americans. The logic was that hospitals would need less DSH funding as the uninsured rate dropped. However, Republican controlled states opposed the expansion of Medicaid. This was not what Congress initially intended, necessitating a postponement of the scheduled reduction.
In Iowa, DSH cuts would have an enormous impact on hospitals serving lower income community members. Iowa’s current annual DSH allotment is $77.5 million, which eleven major hospitals in Iowa rely on to keep their doors open and provide quality care to low-income patients. If Congress fails to delay cuts soon, Iowa hospitals stand to lose $6.6 million in funding the first year and double that amount the following year.
These cuts are simply unsustainable for safety-net hospitals, and would force them to cut services, raise rates, or both, resulting in higher premiums, job losses, and in some cases, hospital closures. Iowans who depend on their local hospitals will be forced to find care elsewhere or pay more for the care they need, and communities whose economies rely on local hospitals would suffer. Health care leaders, advocacy groups, and industry experts all widely oppose DSH cuts and agree that Congress must take action to delay them.
In just a few months, the most vulnerable of Americans and the hospitals they rely on will have to reckon with the adverse effects of bipartisan inaction. With continued uncertainty about funding worrying consumers and providers alike, Sen. Joni Ernst and Sen. Chuck Grassley must work with their colleagues immediately to ensure continued funding for the DSH program and its vital support for Iowa hospitals and patients.
Timi Brown-Powers of Waterloo is a Democratic state representative of Iowa House District 61.