An Industry Squeezed by Obamacare’s Mandates
Writing in the New York Times this past weekend, Robert Pear reports on the plight faced by nursing homes around the country. The story notes that many nursing homes cannot afford to pay for their employees’ insurance premiums, or offer coverage that will likely not meet the bureaucrat-imposed standards under the health care law. As a result, “a midsize nursing home” could face new penalties “easily exceed[ing] $200,000 a year.”
To make a bad situation worse, as the article points out, nursing homes are also being squeezed by the payment reductions in the law – nursing homes generate most of their revenue from governments, and therefore don’t have the capacity to pass the higher costs from the mandate on to their customers (which in this case are ultimately taxpayers). The Medicare actuary previously concluded that the health care law’s Medicare payment reductions to skilled nursing facilities were “difficult to achieve,” and could cause as many as 40 percent of facilities to become unprofitable in the long term. Meanwhile, nursing homes paid by state Medicaid programs are also facing payment reductions due to the states’ budgetary crises – which have been significantly worsened by at least $118 billion in unfunded mandates imposed by the health care law.
Imposing penalties on firms that cannot afford them, and squeezing provider payments to unrealistically low levels, does not represent real health care reform – and further illustrates the painful side effects of Democrats’ unpopular health care law.