[Editor’s note: The following is the first in a three-part series examining the local impact of the Patient Protection and Affordable Care Act, or Obamacare.]

Bill Allegre said he knows some people can’t afford medications because they don’t have health insurance.

Allegre sees the symptoms of a still-recovering economy on a regular basis as a pharmacist at Walgreens, 1445 S. Main St., Ottawa, he said.

“There are plenty of people who cannot afford to buy medicines because they don’t have health insurance or are underinsured,” Allegre said.

Allegre is optimistic the federal Patient Protection and Affordable Care Act, also known as Obamacare, which was signed into law by President Obama March 23, 2010, will alleviate some of those concerns for Americans who currently cannot afford health insurance, he said.

It’s not unusual for hospitals, doctors and pharmacies to write off some of their costs because people can’t afford to pay, some local health officials said.

Allegre thinks the health reforms will be beneficial for consumers, he said.

“A blood pressure medication might cost $150 [for example], so hopefully [the Affordable Care Act] will help people be able to afford their medicines,” Allegre said.

The Affordable Care Act contains more than 1,000 pages of reforms to the insurance industry and the health care industry to help cut health care costs and to provide affordable health insurance to all Americans, according to the Obama administration. Many of those reforms are set to be implemented in 2014, as the current legislation stands.

About 44 million Americans are unable to get health insurance, according to federal government estimates. Obamacare is designed to help these individuals get health insurance through expanding Medicaid and Medicare and offering assistance to Americans who cannot afford health care, proponents of the legislation have said.


While the act is designed to provide millions of Americans with affordable health care, it might not be the cure-all for the country’s health care industry.

Larry Felix, chief executive officer of Ransom Memorial Hospital, 1301 S. Main St., Ottawa, has concerns about how the reforms will affect hospitals that are struggling to maintain operating margins, he said.

“We do about $4.5 million per year of uncompensated care for the poor,” Felix said. “What the Affordable Care Act does is not fully determined yet, because the state has to decide if they are going to expand the state Medicaid program. If the state does not expand Medicaid, the hospital is still not going to be paid for those indigent patients.”

 For people who cannot afford health insurance, the federal government will pay states to add them to Medicaid, according to the Affordable Care Act. States are required to set up insurance exchanges — or allow the federal government to do so — to make it easier to shop for insurance plans, according to the legislation.

Under the law’s proposed Medicaid expansion, states would have been required to expand their Medicaid program to cover all individuals up to 138 percent of the federal poverty level or risk losing all of their federal Medicaid funds, according to The Heritage Foundation.

But a recent U.S. Supreme Court ruling made it possible for states to opt out of expanding Medicaid. Felix and other health care observers said indications are that Kansas will decide not to expand Medicaid.

The Supreme Court ruling struck down the Medicaid mandate on the states as unconstitutionally coercive, and opponents of the health care law are predicting the court’s decision likely puts the law on a faster pace to collapse, according to media reports.

Compounding the fractured promise of payments for indigent care if Medicaid is not expanded, Felix said, are federal reimbursement cuts to hospitals introduced under the Affordable Care Act

“The idea being that the expanded Medicaid program would offset the reimbursement cuts,” Felix said.

As the legislation currently is written, Ransom Memorial Hospital stands to see $14.5 million in cuts over the next 10 years, Felix said.

“Some of those cuts have already been implemented,” he said.


The change comes at a time when hospitals across Kansas and the nation are having difficulty maintaining operating margins, Felix said.

“The auditors were here in May, and they told me of all the hospitals they were auditing, none have positive operating margins,” Felix said.  Felix thinks Ransom Memorial is in a healthier position than many medical centers, he said.

“Suffice it to say some hospitals already are suffering greatly from the reimbursement cuts,” Felix said. “We will face our challenges, but we are in better shape than most. Our facilities are recapitalized, and we have no debt. Plus, I think we are in a growth corridor ... Additional patients hopefully will help offset some of the losses.”

Ransom Memorial Hospital completed its accreditation process with “flying colors” last week, Felix said. The accreditation, conducted by The Joint Commission, is considered the “gold standard” for the industry and only about 20 percent of the hospitals in the state are accredited, he said.

Though he did not provide figures, Felix said the accreditation process can be expensive, and some hospitals are dropping their accreditation because they cannot afford to pay The Joint Commission “to come out and conduct their accreditation survey.” The Joint Commission is an independent, not-for-profit organization that accredits and certifies more than 20,000 health care organizations and programs in the U.S., according to the organization’s website.

“The Joint Commission’s standards are much more stringent than the Medicare standards, so the accreditation [from The Joint Commission] is really the gold standard of the industry,” Felix said. “I’m afraid some hospitals are going to let their accreditation drop because of the cost, and I could also see an erosion of medical infrastructure and the quality of care degrade at some hospitals across the country [that already are financially strapped] because of these tremendous reimbursement cuts. That worries me.”

The reimbursement cuts are not going to change Ransom Memorial Hospital’s philosophy of caring for the poor, Felix said.

“Some hospitals render care to poor, and some do not,” Felix said. “The law is all hospitals have to apply emergency care — it’s against the law to not stabilize patients with emergent conditions. But in terms of elective and non-emergent procedures, some hospitals do not provide those services to the indigent. Ransom Memorial Hospital will continue to care for the poor.”

While the merits of the Affordable Care Act are being examined by the medical community — several doctors declined to comment on the topic because some aspects of the legislation still have not been implemented — the so-called Obamacare has drawn a mixed diagnosis from local residents.

“It will help us with our disabled son — he can stay with his family doctor for a while longer, thank God!” Cindy Bartko wrote on The Herald’s Facebook page about the Affordable Care Act.

Herald reader Dea Sitlington countered that her health care insurance costs and insurance plan already have taken a turn for the worse because of “Obamacare.”

“I can truthfully say it has and will hurt me,” Sitlington said. “... I have to find a new doctor after 20 years.”

Both readers’ experiences are not unusual because there will be gains and sacrifices, depending on each individual’s circumstances, under the Affordable Care Act, according to the non-partisan Congressional Budget Office and other fact-checking organizations. The CBO and other fact-checkers listed several advantages and disadvantages about the legislation.


Some of the advantages of the Affordable Care Act listed by the Congressional Budget Office are:

• It was designed to reduce overall health care costs by making services available to those who currently can’t get insurance. They often use a hospital emergency room as their primary care physician, increasing costs for everyone. This starts in 2014.

• It requires all plans cover 10 essential health benefits. Preventive services are free, which will lower health care costs by treating diseases before they reach an expensive crisis.

• Insurance companies cannot deny children coverage for pre-existing conditions. This benefit applies to everyone in 2014. Insurance companies can no longer drop anyone from coverage once they get sick. If a company denies someone coverage, that person can go to an external appeals process. Parents can put their children up to age 26 on their health insurance plans.

Some of the disadvantages included:

• Increased coverage may actually raise health care costs, because many people will receive preventive care and testing. The Congressional Budget Office found in a recent study that additional testing, such as cancer screening and cholesterol tests, will lead to higher net medical spending.

• Those who don’t purchase insurance, and don’t qualify for Medicaid or subsidies, will be assessed a tax of $95 (or 1 percent of income, whichever is higher) in 2014. It increases to $325 (or 2 percent of income) in 2015, and $695 (or 2.5 percent of income) in 2016.

• About 30.1 million people who currently buy their own private health insurance. Some of them might have to get another plan if their insurance doesn’t meet the 10 essential health benefits, according to Factcheck.org

The Affordable Care Act gives U.S. employers with more than 50 full-time employees the choice between providing insurance that meets the standards of the legislation or paying a penalty. Obamacare is designed to expand Medicaid to more than 15 million uninsured low income Americans, according to government estimates.

The act’s effect on local businesses and residents will be examined in the second and third parts of The Herald’s series on health care reforms.

Meanwhile, members of the medical community continue to dissect the many aspects of the Affordable Care Act as they try to determine how it will affect their hospitals and private practices.

“The legislation could change, so we are along for the ride just like everyone else,” Felix said. “The community has confidence in this hospital, and we will weather this storm. Had we known this [Affordable Care Act] was coming, I don’t think we would have done anything differently.”