If the ACAshould be overturned, it would end up costing hospitals a lot ofmoney and exacerbate the problem of rural hospitals closing.(Photo: Shutterstock)

Politicians and the public are still arguing about the relativebenefits of the Affordable Care Act for the health care system, butpublic hospitals should be very grateful forthe ACA's existence.

According to a study on municipal hospitalcosts funded by the University of Illinois in Chicago's GovernmentFinance Research Center, since the ACA was upheld by the SupremeCourt in 2012, yields for short and medium-term health care bondshave fallen by 39 basis points.

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That adds up to $3 million in interest savings per bond issue,totaling $1.74 billion across the economy. The study added thaturban and private hospitals derived even moreimpact.

According to Dermot Murphy, coauthor of the study and a UICassociate professor of finance, there wasn't a whole lot ofinvestor confidence in the beginning. "For all they knew, the ACAmight be repealed next month. After the Supreme Court ruling in2012, however, investors got a shot of confidence that the[legislation] was more likely to remain the law of the land."

Public hospitals get much of their funding from municipal bonds;the study found that $203 billion in health care municipal bondswere outstanding in 2011, and in 2017 alone bonds for hospitalfinancing in the amount of $33.4 billion were issued.

Yield on the bonds fell substantially after the Supreme Courtruling, making it easier and cheaper for hospitals to borrow, andthen dropped another 17 basis points in the wake of Medicaidexpansion in the states that chose to expand it.

At this point, if the ACA should be overturned, it would end upcosting hospitals a lot of money and exacerbate the problem ofrural hospitals closing, the report said. A scaling back orreversal of the ACA could result in the reversal of some $6.2billion in savings for hospitals—and although uncertainty haslessened, it certainly hasn't disappeared.

The authors of the study wrote, "The numerous repeal effortssince 2010 suggest that there are significant long-run politicalrisks associated with investing in the health care sector."

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