Nancy Nielsen, MD, PhD.

Medical policy expert Nancy Nielsen, MD ’76, PhD, says the burden of uncompensated care will no longer be borne by hospitals or offset through higher premiums for all.

Service Gaps, Needs May Affect Newly Insured’s Choices

Published January 10, 2014

As providers prepare for an influx of new patients due to the Affordable Care Act, regional differences in service availability may affect how the newly insured receive care, says University at Buffalo medical policy expert Nancy Nielsen, MD, PhD, senior associate dean for health policy.

“Lacking health insurance is hazardous to your health, so the 2.1 million newly insured Americans are in a much better place now than they were before Jan. 1.”
Nancy Nielsen, MD, PhD
Senior associate dean for health policy

More people being insured for the first time results in higher demand for medical services, she notes, yet access issues in different geographic areas are more complex.

“It remains to be seen where increases in service will occur,” says Nielsen, a past president of the American Medical Association.

Increased ER Visits May Signal Lack of Care Options

In response to reports that newly insured Medicaid patients in Oregon made more emergency room visits than the uninsured, Nielsen emphasizes that the act’s impacts may play out differently in different areas.

“If there is a shortage of available primary care or specific specialty areas in a region, then, indeed, hospital emergency departments may initially show an influx of patients. Hopefully, those folks can then be linked with more appropriate settings for follow-up care.”

However, in areas with ready access to primary care, the newly insured who aren’t acutely ill will seek those services, she adds.

She notes that Massachusetts did not see a rise in emergency room use after instituting its statewide health insurance mandate.

Demand May Increase Initially, Then Drop Off

Nielsen, a former senior adviser for the U.S. Department of Health and Human Services’ Center for Medicare and Medicaid Innovation, points to the example of a retired, uninsured 63-year-old.

“Typically, this person will delay seeking health services until Medicare coverage begins at age 65, and then receive an increase in services during his first year of eligibility,” she says. Afterward, his demand for health services returns to a more normal level.

“That experience would predict a similar, initial uptick in demand from those newly insured under Obamacare, with a return to more typical levels fairly soon afterward,” she says.

Copays Deter ER Care; Care Burden Shifts

Nielsen adds that other factors should be taken into account when assessing the act.

For example, privately insured people who buy plans through state or federal exchanges will have a financial incentive to seek lower-cost care.

In exchange for lower monthly premiums, they may pay hefty copayments, especially for emergency room care.

“Those charges will deter people from going to a higher-cost site like a hospital emergency room unless it’s really necessary,” Nielsen says.

Also, "prior to the implementation of Obamacare, acutely ill people without insurance got hospital care that the rest of us paid for,” she says.

“Now a third-party payer takes the burden for uncompensated care away from hospitals and everyone else who paid higher premiums to cover the cost of that care.”

Clearer Picture of Needs Will Soon Emerge

Regional needs and service gaps may be clarified in about six months, shortly following the March deadline by which Americans must either be insured or pay a tax penalty, Nielsen explains.

For example, it is still not known what proportion of the newly insured have chronic conditions.

“Once that becomes clear, we can better evaluate the pressure points in a region’s health care service network,” she says.

Yet, Nielsen is confident that the act — despite the problems that will surely arise — will ultimately benefit Americans.

“What has been shown over and over is that lacking health insurance is hazardous to your health, so the 2.1 million newly insured Americans are in a much better place now than they were before Jan. 1.”