Nashville hospital chains document Obamacare subsidy fallout
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Expiring Affordable Care Act subsidies have had an even bigger impact on hospitals than executives initially expected.
Why it matters: The expiration of enhanced Affordable Care Act subsidies at the end of 2025 didn't eliminate patients' need for care. But new reports from Nashville-area hospital giants show it is changing how they seek it.
State of play: Nashville-based HCA Healthcare, the nation's largest for-profit hospital chain, has seen an uptick nationwide in uninsured patients turning to emergency rooms for care this year.
By the numbers: Emergency room visits increased 3.6%. At the same time, inpatient surgeries fell 2.3% and outpatient surgeries declined 3.4%
- Executives said lost exchange coverage was a major contributor to a sharper decline in elective procedures, which are easier to postpone.
Zoom out: Community Health Systems, a Franklin-based hospital chain, reported a similar pattern: Uninsured hospital use is growing, emergency demand is holding up and elective care is weakening.
Follow the money: Ahead of a call with investors last week, HCA tied an influx of uninsured patients to a $400 million hit on revenue in the second quarter.
- Executives attributed the shift to the lapse in subsidies.
Catch up quick: Pandemic-era enhanced subsidies for ACA plans helped more people get discounted health insurance. But when those subsidies expired last year, premiums shot up.
What they're saying: "The effects, as expected, were that many people became uninsured and still needed emergency care from hospitals," HCA CEO Sam Hazen said during a call with investors on Friday.
- "As we look at the first half of the year, our expectations proved accurate, although the impact was greater than our estimates."
The intrigue: HCA initially assumed some people leaving the exchanges would obtain coverage elsewhere. The company also expected patients who became uninsured to use less hospital care.
- Neither assumption held, HCA CFO Mike Marks said.