Ministry executives applaud passage of major legislation, still wish for more

September 15, 2022

Law takes on health care costs and climate issues, gives no financial relief to care providers


While executives within the Catholic health ministry agree there's much to celebrate in the Inflation Reduction Act, the measure signed Aug. 16 by President Joe Biden left a few of their hopes at least temporarily dashed.


Mike Slubowski, president and chief executive of Trinity Health, says he would describe his reaction to the act as "bubbling, overflowing enthusiasm." Nevertheless, he is disappointed that the measure doesn't provide any financial support for nonprofit hospitals like those within his system that have been financially drained by the demand for COVID-19 care and by the spike in labor costs.

He points out that most of the subsidies health care providers got during the pandemic dried up in early 2021, yet 50% of all COVID hospital admissions occurred from October 2021 through February of this year.

The Inflation Reduction Act addresses climate change by offering incentives to expand the use of clean energy, such as that generated by wind turbines like these in Livermore, California. In its many provisions, the act also addresses health care access and costs.
Godofredo A. Vasquez/Associated Press

"We were hoping, at a minimum, that Congress would've used the opportunity to provide financial assistance to us with some of the savings they were going to have on contracting with Big Pharma for better pricing, by way of example, and revenue from the minimum tax for corporations," says Slubowski, whose Livonia, Michigan-based system has 88 hospitals and operates in 25 states.

Slubowski is referencing two of the legislation's major provisions. One is to empower federal officials who oversee the Medicare program to negotiate the prices of some prescription drugs for the first time. The other provision imposes a corporate minimum tax of 15%, which the nonpartisan and nonprofit Institute on Taxation and Economic Policy says will raise $223 billion over a decade.


Tax credits extended
Lisa Smith, CHA's vice president of advocacy and public policy, said the association advocated for the federal government to be able to negotiate Medicare prescription drug prices and for the three-year extension through 2025 of the enhanced marketplace insurance premium subsidies contained in the act. The subsidies, which are issued as premium tax credits, were first adopted under the American Rescue Plan Act and had been scheduled to phase out at the end of 2022. Smith says the extension will stave off significant premium increases for millions of people.

"The estimates are that it will allow about 3.7 million individuals to retain affordable health insurance coverage, which is tremendous because right now we are at a record high enrollment in marketplace coverage and it's a time when there's also huge inflation, so people's ability to afford health insurance coverage is truly reduced," Smith says.

In its synopsis of the inflation act's effects, the Biden administration says the subsidies have reduced the nation's uninsured rate to a historic low of 8%.

Smith points out that many people have been able to keep their Medicaid coverage during the pandemic because of a federal rule that has prevented states from removing anyone from Medicaid enrollment during the public health emergency. Once that emergency declaration ends, Smith says, a couple million people could lose Medicaid coverage, many because states are unable to verify their continued eligibility and others because their incomes have gone up.

CHA and other Catholic health groups would have liked the Inflation Reduction Act to require states to extend postpartum coverage for women insured by Medicaid to a year from the current 60-day requirement. Twenty-four states have already done so. The Kaiser Family Foundation says 42% of births are financed by Medicaid.

Smith explains that the extension of the enhanced premium tax credits could help members of the latter group afford to buy insurance on the health care marketplace if they were to lose Medicaid coverage.

Promoting health equity
Smith notes that CHA and many Catholic health systems advocated for the extension of the enhanced tax credits in part because the subsidies help advance health equity, one of the goals that the organizations are pursuing as part of the CHA-led We Are Called initiative. "Ensuring affordable access to care is always a health equity issue because it impacts low-income and often minority communities," she explains.

Other aspects of the Inflation Reduction Act that Smith says address health equity and were priorities for CHA and Catholic health care providers include allowing federal officials, for the first time, to negotiate the prices of certain prescription drugs for the Medicare program to lower costs for patients. The act makes other changes to Medicare prescription drug policies too, such as implementation of cap of $2,000 on overall out-of-pocket drug spending for seniors, an increase in subsidies for seniors with incomes up to 150% of the federal poverty level and rebates if drug prices rise too quickly.

Slubowski points out that the act's attempt to drive down the skyrocketing cost of insulin aligns with what Civica Rx is trying to do. The nonprofit drugmaker jointly owned by Trinity Health, CommonSpirit Health, Providence St. Joseph Health, SSM Health and other nonprofits announced plans earlier this year to market three types of insulin at a fraction of what major manufacturers of the diabetes drug are charging.


Climate impact
Jacquelyn Bombard, executive director of federal relations for Providence, says her system advocated for and applauds the inflation act's tax credit extensions and other efforts to address health care costs and coverage. She says Providence also is thrilled with the historic investments within the measure to address climate change.

Bombard notes that U.S. health care has an outsize impact on the environment, contributing an estimated 8.5% of greenhouse gas emissions. Providence has made reversing its carbon footprint a priority, committing to offset or remove more greenhouse gases from the atmosphere than it emits by 2030.

Among the inflation act's provisions that address climate change are a $27 billion fund to help communities rapidly acquire and deploy low- and zero-emission products, technologies and services, including with private capital. Of that total, $20 billion is for competitive grants to nonprofit organizations that help communities adopt technologies and activities to reduce or avoid air pollution, including $8 billion for projects in low-income and disadvantaged areas.

The bill also provides $3 billion for "Environmental and Climate Justice Block Grants" to community-based nonprofit organizations, or nonprofit-led partnerships, to address the disproportionate environmental and public health harms caused by pollution and climate change in disadvantaged communities. The potential uses for the grants include pollution monitoring, prevention and remediation; investments in low- and zero-emissions technologies and infrastructure; and mitigating climate and health risks from urban heat islands, extreme heat, wood heater emissions and wildfires.

Bombard says Providence hopes to be among the partners that tap those funds to help improve the air quality in some of the communities it serves. "We feel like Providence can't do this alone, the Catholic ministry can't do this alone and government can't do this alone," she says.

She says the law acknowledges that having all stakeholders at the table and forming cross-sector partnerships will be essential to environmental progress.

More to be done
Bombard says the Inflation Reduction Act didn't check all the boxes on Providence's legislative agenda. Like CHA, the health system had urged members of Congress to require states to extend postpartum coverage for women insured by Medicaid to a year from the current 60 days. California and Oregon are among the 24 states that already have done this, but the other five states in Providence's footprint — Washington, Alaska, Montana, Texas and New Mexico — have not. The Kaiser Family Foundation says 42% of U.S. births are financed by Medicaid.

In addition, earlier iterations of the bill would have expanded funding for graduate medical education. That funding didn't make the final version, to the disappointment of Providence. Bombard says the system believed those expanded opportunities for advanced education would have enhanced retention and recruitment of certain clinicians, especially in the rural areas that Providence covers.

Bombard and the others are hopeful that subsequent legislation will address what they see as the Inflation Reduction Act's shortcomings. Smith says CHA will continue to champion expanded Medicaid postpartum coverage as well as the closure of a coverage gap in states that have not expanded Medicaid under provisions of the Affordable Care Act. Taken together, those nonexpansion states leave more than 2.2 million low-income individuals — 800,000 of whom are the nation's poorest women — without access to any health care coverage. She says CHA also will continue to push Congress to provide increased reimbursement for hospitals and long-term care facilities as the current payment system is not adequate or sustainable.

Slubowski says Trinity Health will continue to join other nonprofit health systems in advocating for financial assistance to keep safety net health care providers from going under. He worries, however, that the situation might have to become more dire before policymakers will act.

"When financial results come out and some providers are forced to shut down or limit services — which is already happening and will increase to a fever pitch — they will act," he says. "They will take some action when there's a crisis."


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