Hospitals and Insurers Oppose Reduced Penalties for Uninsured

Hospitals and insurers are opposing changes to the latest Senate healthcare reform bill that would reduce penalties for individuals who do not enroll in health plans, according to a report by the Wall Street Journal.

Providers and insurers are actively opposing a recent change to the bill that would reduce the number of Americans covered by an insurance mandate by 2 million. The Senate committee agreed to the cuts due to concern that a wider mandate would penalize individuals who could not actually afford insurance, according to the report. 

Hospitals argue that the increased number of expected uninsured threatens their financial viability. In July, hospitals agreed to a $155 billion cut in government reimbursements for services over the next 10 years. In return, lawmakers would pass a bill that would expand health insurance to 94-95 percent of all Americans, according to the report.

Hospitals currently absorb the cost of care for many uninsured, so a reduction in the number of uninsured Americans would increase hospital revenue, allowing the hospitals to remain viable with federal payment cuts. If the number of insured Americans does not reach previously agreed-upon levels, the hospital industry will be unable to consent to such federal payment cuts, according to the report.

Insurance companies also worry that younger and healthier individuals will forgo health insurance, choosing to the pay the penalty instead. Insurers claim that without healthy enrollees, the companies will be unable to offset the costs of accepting all individuals, regardless of preexisting health conditions, according to the report.

Read the Wall Street Journal's report on the oppositions against reduced penalties for the uninsured.

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