Roosevelt Institute | Cornell University

Will Healthcare Reform Slash Community Benefits?

By Andjela CirkoPublished March 26, 2017

With a new era of healthcare reform on the rise, it is possible that community health needs could be pushed aside. The Affordable Care Act (ACA) requires nonprofit hospitals to assess, as part of their tax exemption status, local community health needs and create implementation plans to address them.

The federal tax exemption increases the number of nonprofit hospitals and saves billion dollars in public health expenditures. However, for-profit hospitals, which do not receive federal tax exemptions, have been against this policy, claiming that they also care for the community at the same magnitude that nonprofit hospitals do.

The 2010 ACA provision, which became a requirement in 2012, was created to hold nonprofits to a higher standard, and to penalize them more rigorously for noncompliance. Nonprofit hospitals that fail to create a Community Health Needs Assessment (CHNA) and implementation strategy are fined $50,000, and are examined to evaluate if they can keep their tax-exempt status.

The new healthcare law will create challenges for hospital financing, especially in the realm of community health. The new proposal could lead to 24 million more uninsured individuals, which would increase the demand for charity care hospital services . If hospitals are providing more charity care, the amount of funds they have for community outreach efforts, such as the CHNA, would decrease. The increase in charity care most likely lead to budget cuts in these community health outreach related areas.

After personally helping a nonprofit hospital in Chicago to draft their implementation plan as a summer intern, I understand the challenges of launching community health projects for nonprofits. It was difficult enough to receive funding to create and upkeep programs to alleviate violence and food insecurity issues in the city, even with the required budget set aside for the CHNA. For example, one of the programs, that was created to help individuals in a lower socioeconomic neighborhood understand the risks of heart disease and how to measure their own blood pressure, was cut because there was a lack of funding and volunteers to run the program.  Without any federal requirements, many more of these beneficial local programs would be eliminated.

According to the vice president for community health at Mass General, "There's no question the Affordable Care Act required us to bump up our game." Without the ACA requirements, will nonprofit hospitals continue to provide health benefits outside their doors, to the community at large? Or will public health take its turn on the backburner, as the number of uninsured requiring charity care will likely skyrocket?