Dive Brief:
- The Department of Health and Human Services released a brief this week estimating that 10.3 million fewer people will be uninsured and 8 million more will be covered under Medicaid in fiscal year 2014 because of the Affordable Care Act. Because of this, HHS expects hospitals' uncompensated care costs will be $5.7 billion less than they would have been without the implementation of the law.
- Nearly three-quarters of the savings will be in states that expanded Medicaid; those that didn't will see about $1.5 billion in lower costs.
- The report found that uninsured and self-pay volume is down and emergency department visits are down in this group as well, particularly in expansion states. Medicaid admission volumes are also up in states that expanded the program.
Dive Insight:
In general, hospitals are the ones that shoulder much of the burden of uncompensated care. According to the report, approximately 6% of hospitals' total operating expenses in 2012 came from uncompensated care. With disproportionate share hospital payments being reduced dramatically under the ACA, Medicaid expansion looks to be a major factor in recouping those costs for hospitals. Other reports have demonstrated that hospitals in states that have expanded Medicaid will see much smaller losses from uncompensated care and self-pay patients than those in states that did not choose to expand. To date, 27 states plus Washington, D.C. have expanded Medicaid.