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The expiration of the Affordable Care Act enhanced premium tax credits, cuts to Medicaid funding and the increasing cost of benefits for both employers and employees are adding to an increase in the number of self-pay patients and the amount they owe.
There is a rise in self-pay for medical services from individuals who are least able to afford it. Even commercially insured patients face higher deductibles and premiums, said Seth Cohen, president of Cedar, a company that offers an AI technology platform for billing and payment.
Hospitals are on the receiving end of uncompensated care, Cohen said. Health systems are projected to see a 10-15% increase in patient out-of-pocket costs, higher self-pay balances and uncompensated care.
To prevent margin erosions, health systems need to rethink how they identify financial risk, manage collections and prevent avoidable bad debt.
"Even if subsidies return in some form, there is only one direction patient out-of-pocket costs are going, and that's exceeding medical expenses," Cohen said.
For more, please listen to the conversation between Cohen and Susan Morse, executive editor of Healthcare Finance News.
Talking Points:
- Coverage status is becoming a poor predictor of payment behavior.
- Insured patients are increasingly behaving like self-pay consumers.
- Health systems need more sophisticated tools and workflows to detect coverage gaps and connect patients to financial assistance.
- Some employers use the ACA exchanges for healthcare coverage.
- High-deductible benefits, which used to represent 2% of plans, now represent the majority of plan design choice for employer coverage.
- Health Savings Accounts, even when funded, are not always accessed as patients must remember to bring their HSA card when they get care and, if not, to get reimbursed retroactively.
- About two-thirds of patients with an HSA account have never opened or accessed their account.
- Big bank HSAs aren't always incentivized for people to use their HSA.
More About this Episode:
Expired ACA subsidies would result in $32.1 billion in lost revenue for providers
Medicaid, ACA enrollment expected to decrease under One Big Beautiful Bill Act
Revenue and payer-mix pressures continue to weigh on long-term sustainability
Nearly 60% of hospitals report rise in non-labor expenses
AI gains traction as hospitals focus on operational efficiency
Email the writer: SMorse@himss.org