ACA Will Save Hospitals $5.7B in Uncompensated Care, HHS Says
Hospitals in states that expanded Medicaid under the Affordable Care Act have experienced a significant decline in the amount of uncompensated care they provide, Obama administration officials said Wednesday, the New York Times reports.
The data are included of a White House report on trends in uncompensated care that the Obama administration is using to improve public perception of the ACA before mid-term elections and the second open enrollment period. For the report, federal officials examined data from hospital operators' financial reports and from 24 states (Pear, New York Times, 9/24). The projections assume that 10.3 million people gained health coverage in 2014 (Millman, "Wonkblog," Washington Post, 9/24).
According to the Times, uncompensated care accounts for the total of both unpaid medical bills and charity care hospitals provide for low-income patients (New York Times, 9/24). HHS has estimated that uncompensated care totaled as much as $52 billion for hospitals in 2012 (Dickson, Modern Healthcare, 9/24). According to The Hill, hospitals typically are responsible for about 60% of all uncompensated medical bills, while the rest is covered by federal and state governments and charities (Ferris, The Hill, 9/24).
HHS Secretary Sylvia Mathews Burwell said the ACA will save hospitals $5.7 billion in uncompensated care costs this year, and $4.2 billion of that total will be for hospitals in Medicaid expansion states (New York Times, 9/24).
Specifically, the report found that:
- Hospitals in states that expanded Medicaid will save about 25% of the uncompensated care costs they might have faced if the ACA did not take effect; and
- Hospitals in states that did not expand Medicaid will save about 9% of the costs they might have faced if the ACA did not take effect (Adams, CQ HealthBeat, 9/24).
Burwell noted that state hospital association surveys and reports from investor-owned hospitals show that Medicaid expansion has helped to reduce the number of uninsured patients who cannot pay for their care.
According to the report, officials said that hospitals experienced admissions by Medicaid beneficiaries increases of 17% to 32% in states that expanded the program. Meanwhile, states that did not expand their Medicaid programs saw no significant increases (New York Times, 9/24). Overall, the report estimated that unpaid medical care costs would decrease by about 16% across the country (The Hill, 9/24).
Push for Medicaid Expansion
Burwell and Jason Furman, chair of the President's Council of Economic Advisers, said the figures should help persuade more states to expand Medicaid. Administration officials have said they want to work with Republican governors in states that have not yet expanded the program to do so, much like they did with Pennsylvania Gov. Tom Corbett (R) on the state's alternative Medicaid expansion plan (New York Times, 9/24).
Burwell added, "We're now at a phase where we're actually going to start seeing the benefits" of Medicaid expansion and data show "that this provides benefits to states" (Morgan/Rampton, Reuters, 9/24). She said, "This is one of the reasons that you see hospitals and others supporting the expansion of Medicaid in a number of states" (The Hill, 9/24).
Federation of American Hospitals President Charles Kahn said that while the "increased payments for previously uncompensated care are a plus for hospitals," they must be placed in the context that hospitals are also "living with heavy cuts in Medicare, which were put in place by the [ACA]" (New York Times, 9/24).
America's Essential Hospitals CEO Bruce Siegel added, "Even in states that have expanded Medicaid, [hospitals] continue to face the burden of Medicaid payment rates that fall well short of the true cost of care" (Modern Healthcare, 9/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.