2 AFFORDABLE CARE ACT TAKEAWAYS
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|Jeff Cooper, who heads Savills? US healthcare group and ULI?s Healthcare and Life Sciences Council, tells us that without the Affordable Care Act's individual mandate, which SCOTUS kept in place last week, the entire law would have been so expensive it would have been unsustainable. SCOTUS did nix a part that would?ve made states give up Medicaid support payments from the federal government if they didn't agree to an expansion of the program. Without that expansion, many of the low-income people who head to the ER instead of to physicians or outpatient centers because they don't have insurance will keep doing so, draining inner-city hospitals? resources. In fact, the law, because it assumed a Medicaid expansion, lowers federal reimbursements to those hospitals that serve low-income folks.|
|Jeff also says the law provides some support for low-income people to buy policies from the private insurers to satisfy the individual mandate, but many still will be unable to afford it. They'll end up paying a smaller-by-a-long-shot fine to the IRS (the tax that made SCOTUS Chief Justice John Roberts OK with the law). Still, the rolls of insured people will jump, pouring more premiums into insurance firms? coffers and motivating more demand for outpatient MOBs.|
|The law also changes how docs? Medicare (that's the one for the elderly) reimbursements are calculated. (Darn it! We?d justprogrammed our TI-84.) Congress has been delaying that while waiting for SCOTUS, and unless it acts further, physician incomes will go down (or fail to keep pace with the CPI). Thus, MOB landlords won't be able to increase rents. On the other hand, that may also accelerate acquisition of physician practices by creditworthy hospital systems. So for the length of doctors? existing MOB lease terms, landlords will inherit high-credit systems as tenants. It seems there?ll be plenty of work ahead for Jeff, but first, he's claiming some freedom and heading to his place on the Connecticut shore to celebrate the 4th.|