N.J. Hospitals Sustained Nearly $1.5 Billion in ACA Funding Cuts Repeal Without Replacement Will Add $1.1 Billion More Cuts

Hospitals and health systems in New Jersey have already absorbed nearly $1.5 billion in funding cuts since the Affordable Care Act was enacted in 2010, with the promise of expanded healthcare coverage to mitigate these losses. As the 115th Congress advances legislation to repeal major provisions of the ACA, healthcare providers are concerned the cuts will remain despite the coverage of 796,291 state residents being jeopardized.

Individual hospitals have experienced funding cuts as high as $74 million from 2010 to 2017, according to modeling performed by the New Jersey Hospital Association.

Hospitals aren’t the only providers affected by these cuts; New Jersey’s post-acute facilities have seen more than $430 million cut from their funding, according to NJHA.

NJHA’s modeling also showed the cuts yet to come if Congress and the new Administration do not pass an appropriate replacement plan. New Jersey hospitals will see added cuts totaling $1.1 billion through 2019, while post-acute care providers will sustain another $325 million in cuts.

NJHA is calling on lawmakers to pass a simultaneous replacement plan if the ACA is repealed. Barring that, these deep funding cuts should be returned to providers to allow them to care for the people who face the loss of newfound coverage, says NJHA.

“The impact of repeal without replacement – or restoration of these funding cuts – would be devastating to hospitals and other healthcare providers,” said Betsy Ryan, president and CEO of NJHA. “So many of the strides we’ve made in expanding access to healthcare – and in reforming our healthcare system for the future – are now in danger of being walked back.”

At stake in New Jersey are issues of access to quality care and financial stability for facilities and the state government, including:

  • A total of 796,291 New Jersey residents have been covered under Medicaid and the Health Insurance Marketplace since the ACA’s coverage provisions took effect in 2014.
  • A stark reduction of insured New Jerseyans would create a dramatic increase in the demand for charity care services. That would be a double blow to hospitals that have seen state charity care funding cut by $350 million in the last two state budgets.
  • More residents of New Jersey would access care through the emergency department, which is not effective for patients, increases wait times for all and increases healthcare costs.
  • The state could lose federal matching dollars under Medicaid expansion, to the tune of $4.4 billion annually.
  • New Jersey residents could lose $795 million in federal subsidies that helped them pay for their insurance premiums.
  • Individuals’ access to services such as mental health and substance use disorder care and preventative care could be jeopardized.
  • Further impacts include reduced investment in population health, quality improvement and health information technology; an unraveling of the healthcare safety net; and deep payment cuts to nursing homes and other post-acute providers that care for the most vulnerable and frail New Jerseyans.
  • The additional strain on hospital budgets of caring for more indigent patients would force extremely difficult – and often unpopular – choices about availability of services, staffing and reinvestments and modernization.
  • The state could lose 86,400 jobs, according to an analysis by the Commonwealth Fund. These job losses would be felt in the healthcare sector as well as other industries including construction, real estate, retail and insurance.

New Jersey’s healthcare sector is the state’s second largest employer; hospitals alone provide more than 142,000 jobs and $22.7 billion in total contributions to the economy. Hospitals also provide more than $2 billion in added community benefits – beyond healthcare services – in their local municipalities.

“We have always been grateful to Gov. Chris Christie and his Administration for strengthening the safety net of the state and expanding Medicaid,” noted Ryan. “I look forward to working with our state and federal lawmakers to continue to keep the well-being of New Jersey’s residents and its healthcare system as a priority.”