The ACA Cost Crunch: Why Hospitals are Deporting More High-Cost Patients

By Danny Hogenkamp

In 2000, a drunk driver in Stuart, Florida collided with Luis Jiménez, an undocumented gardener from Guatemala. After life saving surgery, Martin Memorial Hospital admitted Mr. Jiménez to inpatient rehabilitation for traumatic brain injury. Undercompensated by the government for the costly rehab, Martin Memorial spent years unsuccessfully attempting to discharge Mr. Jiménez to outpatient rehab. After a year of hemorrhaging money and exhausting all possible transfer sites, Martin Memorial rented an ambulance plane for $30,000 and medically repatriated Mr. Jiménez to his home in Jolomcu, Guatemala, where his complex and expensive treatment is left to his family.

Mr. Jiménez’s experience was a rarity in 2000—only the most exorbitant rehabilitation costs rendered government reimbursement inadequate. However, since the passage of the Affordable Care Act (ACA), American hospitals have begun deporting, or medically repatriating, 500 to 2,000 undocumented immigrants each year.

Why has the Affordable Care Act greatly increased the prevalence of medical repatriation? In short, the ACA places an exaggerated financial burden on hospitals in the states that denied federal Medicaid funding or that have large immigrant populations. In these cases, hospitals face a large financial incentive to medically repatriate patients rather than treat them.  Although medical repatriation may save the hospital money, it has devastating impacts on the patient’s health, the patient’s family’s well-being, and on the health outcomes of undocumented immigrants, who would rather suffer at home than go to a hospital and risk deportation.


Safety-Net EMTALA Funding, the ACA, and Strained Hospitals:

Under the Emergency Medical Treatment and Active Labor Act (EMTALA), enacted by Congress in 1986, American Hospitals are obligated, no matter a person’s legal or financial status, to provide emergency medical services until the patient reaches a stable, dischargeable condition. The federal government—through Emergency Medicaid, Charity Care and other programs—refunds hospitals up to a certain level for this emergency and inpatient care. Recognizing Emergency Medicaid and Charity Care funding is often inadequate, state governments are required to cover the remaining emergency and inpatient care by issuing annual Medicaid Disproportionate Share Hospital (DSH) funding to high-need hospitals.

Since the percentage of uninsured Americans was projected to dramatically decrease under the ACA, the 2010 law implemented drastic cuts to DSH funding. From 2016-2021, DSH funding, which accounts for 45 percent of federal uncompensated care cost (UCC) reimbursements, will be reduced by 75 percent—from $11.4 billion to $2.5 billion. In 2013, the government paid for 62 percent, or $30.3 billion out of $49 billion in UCC, leaving the remaining $18.7 billion to be paid for by hospitals. This accounts for 6.1 percent of American hospital expenditures. Though Congress has acknowledged this issue, thus far they have only delayed DSH cuts from 2014 to 2016 while doing nothing to fix the underlying problem.

The issue with these spending cuts is that some states will incur no significant decline in their uninsured population, as 1) some states refused federal Medicaid expansion funding, and 2) some states have large undocumented populations, which remain uninsured under the ACA. This means that particular hospitals, without Medicaid funding or laden with large undocumented populations, will have less funding to treat the same uninsured population—rendering them financially strained hospitals. As the National Association of State Mental Health Program Directors (NASMHPD) concluded, “some hospitals will lose DSH funds and still have the same portion of uninsured… This will be a substantial loss of funding”.  

Cost Analysis and Medical Repatriation

Financially strained hospitals have been forced to develop extreme, cost-cutting mechanisms. The most effective and popular of these mechanisms is the deportation of costly, undocumented inpatients, a process called medical repatriation. Although cruel, medical repatriation is a financial necessity for many hospitals. The cost of renting an ambulatory plane and medically repatriating a high need, undocumented inpatient costs the hospital approximately $30,000 per person. Providing long-term inpatient care to a high-need, undocumented inpatient would cost a hospital several million dollars per year. 

The Coler-Goldwater Hospital in New York estimated they intake 10-20 “undocumented immigrants in need of long-term care per year… which is both medically sub-optimal and can cost as much as $10,000 to $15,000 per day—that is, $3.65 million to $5.47 million per year per patient.” In total, this will cost the hospital $45.6 to $91.2 million dollars per year. Consequently, the $30,000 cost of medically repatriating each patient is rendered insignificant. At $300,000 to $600,000 dollars per year for the 10-20 patients, this is approximately 1 percent of the total cost of inpatient care.

The Ramifications of Medical Repatriation

The direct effect of medical repatriation is the deportation of 500 to 2,000 undocumented immigrants each year, deportation that can cause a severe drop in health outcomes for the medically repatriated. Revisiting the case of Mr. Jiminez, the Guatemalan national who received a traumatic brain injury, “access to appropriate long-term care was so uncertain even physicians from the country argued that repatriation virtually assured that Luis Jiménez was ‘going to die’”.

Medical repatriation can also cause an incalculable hardship for the family and friends of the repatriated. In 2013, Jacinto Cruz and Jose Rodriguez-Saldana were injured in a car accident in Des Moines, Iowa. The two Mexican nationals were put into medically induced comas at Iowa Methodist Medical Center and provided extensive, life-saving surgeries. Before either man could gain consciousness, consult with a lawyer, or speak to their families, Iowa Methodist hired a private jet and medically repatriated the two patients to a hospital in Veracruz Mexico.

However, the greatest consequence of medical repatriation is indirect: the undocumented fear American hospitals. Some sick or injured undocumented would rather risk death or long-term health effects than attend an emergency room where they could be deported.  

Policy Recommendations

There are three policy actions that can significantly reduce medical repatriation. First, states that have denied the expanded Medicaid funding under the Affordable Care Act must reverse their decision and accept federal Medicaid expansion dollars. The reversal will allow these states to provide health insurance to all citizens, to limit their uninsured population to undocumented immigrants, and to reduce their uncompensated care costs. Cost reductions will help alleviate hospitals’ financial crises, freeing up enough funding so that medical repatriation is no longer a financial necessity. Fortunately, this policy alternative is politically feasible—some states that originally rejected the funding are seriously reconsidering their decision.

Second, federal healthcare law must be changed to allow undocumented immigrants to access health insurance. If the undocumented are insured, they can access primary care, which allows cost-efficient clinics to address common illnesses, as opposed to exorbitantly expensive emergency rooms. Access to preventive care will also lead to improved health outcomes.

A third option, immigration reform, is not currently politically feasible—providing public resources to undocumented immigrants remains an extremely divisive issue.