Mount Sinai Health System President and CEO Kenneth Davis predicted that a "death spiral" could occur if the Supreme Court decides to invalidate the health insurance subsidies currently being provided to millions of Americans through the federal insurance marketplace under the PPACA, according to his interview with CNBC's "On The Money."
According to Mr. Davis' estimation, 80 percent of the patients who purchase health plans from the insurance exchanges get subsidies, putting them on a spending average of about $300 per month or $3,600 per year. If the subsidies are eliminated, patients are "going to say, 'I can't afford this', so they're going to drop out." According to Mr. Davis, this could cause approximately 8 million patients to leave the exchanges, putting the insurance pool in a "death spiral."
Hospital systems could also be in danger. Mr. Davis said hospitals agreed to "take $300 billion less over the next 10 years, with the assumption that we'd be picking up all these new patients that would no longer come to the emergency room and be in the hospital for uncompensated care."
Everyone will suffer if the ruling is repealed, including hospitals that will have less reimbursement for charity healthcare. "It means everybody hurts. The patients hurt and don't get care. Hospitals hurt because these people come again with uncompensated care and they've got to be taken care of. That's the law. We have to hospitalize people until they're stabilized," Mr. Davis said.
Mr. Davis also commented on saving on healthcare spending through curbing the U.S. obesity epidemic. He said the Food and Drug Administration's decision to ban cholesterol-heavy trans fats a "great first step."