Delay of Employer Mandate Impact on Healthcare Providers Remains Unknown

Earlier this month the Obama administration announced that the mandate requiring employers of 50 or more to offer health insurance to employees will be postponed one year to 2015.

What impact will that decision have on healthcare providers?

For employers, it is good news for the postponement allows them to postpone their own decision on healthcare insurance for another year. Insurers who sell policies to companies might have to scale back revenue projections for next year. The federal government will lose out on more than $3 billion in revenue it anticipated receiving in penalties from employers who would elect not to cover their respective employees.

But little, if anything, has been said about the impact on healthcare providers.

The American Hospital Association called the decision to postpone the mandate “troubling.” AHA President and CEO Rich Umbdenstock released a statement in which he claimed “the goal of the ACA was to extend coverage to the uninsured, which required a shared responsibility from all stakeholders. We are concerned that the delay further erodes the coverage that was envisioned as part of the ACA.”

The decision to delay the employer mandate comes on the heels of the US Supreme Court’s decision to make the Medicaid expansion mandate optional. All were negotiated as part of a package that would ensure hospitals would not lose substantial revenue when other programs were cut or eliminated, such as the Disproportionate Share Hospital (DSH) program. “While the administration has already recognized that some of the Medicaid and Medicare Disproportionate Share Hospital (DSH) programs cuts should be delayed because the level of coverage envisioned in the ACA is not being met, this announcement clearly shows the need to eliminate the cuts for two years,” AHA’s Umbdenstock wrote.

CMS will publish its final decision on proposed DSH cuts now that the comment period has closed.