US hospitals optimistic they’ll dodge bullet with Obamacare ruling – Reuters

Posted: Thursday, March 05, 2015

NEW YORK (Reuters) – U.S. hospital executives said on
Wednesday they were optimistic they will avoid the toughest
consequences of a Supreme Court decision on whether millions of
Americans can continue to purchase subsidized health benefits
under Obamacare.

The high court heard oral arguments in the case challenging
the federal tax credits that help residents in at least 34
states afford medical benefits under President Barack Obama’s
healthcare law.

Investors interpreted commentary by Justice Anthony Kennedy,
a potential swing vote among the nine judges, as favorable to
the Obama administration’s defense, boosting hospital shares.

Since the subsidies were introduced last year, they have
helped hospitals reduce the debt accumulated by covering the
costs of uninsured patients.

If the subsidies are deemed illegal for states that rely on
the federal HealthCare.gov insurance exchange, as many as 8
million people may no longer be able to afford coverage,
according to healthcare consultants. An additional 13 states and
the District of Columbia have set up their own exchanges and
would not be affected.

“I am hopeful that the court will recognize and uphold the
intent of Congress, which was to expand coverage as broadly as
possible,” Bill Carpenter, chief executive of LifePoint
Hospitals, said in an interview.

If the court rules that the federal government cannot
provide the subsidies, Carpenter and other executives
interviewed by Reuters said they expected the justices would
allow for a transition period before patients lose access to
healthcare.

Carpenter said LifePoint is talking to members of Congress
from the 21 states where it has hospitals, warning of the
devastating effect on patients, particularly in the rural areas
it serves. A ruling on subsidies would affect 44 of its 65
hospitals in 13 states.

Alan Miller, CEO of hospital chain Universal Health Services
, expects the Obama administration would reach an
agreement with Republican opponents of the law to keep subsidies
in place through the end of 2015. He believes that is enough
time to create a workaround to the Supreme Court ruling.

“The Republicans are already talking about providing
coverage until the end of the year, until something else can be
worked out,” Miller said, pointing toward the alternative plan
being presented by Republican Sen. Orrin Hatch and others.
“Nobody wants to be in the position of denying healthcare to at
least 8 million people.”

Miller said his company was also speaking with members of
Congress about the importance of the coverage. Universal Health
Services runs hospitals in 37 states, about two dozen of them in
states relying on HealthCare.gov.

Carolinas HealthCare System has about 40 hospitals in North
Carolina and South Carolina, where the federal government
provides subsidies. President Joe Piemont said lawmakers would
have to act to ensure the newly insured are not left to their
own devices if the subsidies are thrown out.

“We won’t let the care fall apart, but this is not an
uncertainty that we could endure for a very long time,” he said.

“We’re going to lobby through hospital associations and
medical associations to admonish everybody that there needs to
be a soft landing here.”

Ascension Health, which has hospitals and clinics in 16
states using HealthCare.gov, has published opinion pieces in the
press advocating the need for the subsidies. But it sees little
it can do to influence the Supreme Court.

“We are not planning for alternatives because we remain
optimistic and hopeful,” said Ascension Health CEO Robert
Henkel.

Universal Health shares rose 2.7 percent and LifePoint rose
3.6 percent on Wednesday. Community Health Systems, HCA
Holdings and Tenet Healthcare all jumped more
than 5 percent. Graphic link: (reut.rs/1zYuW3f)

(Additional reporting by Sharon Begley in New York)

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