Without Medicaid Expansion, Hospital Uncompensated Care Would Grow

If states decide not to expand Medicaid in 2014, the uncompensated care provided by hospitals could ballon by more than $53 billion by 2019, according to a new analysis from the National Association of Public Hospitals and Health Systems (NAPH).
by | October 26, 2012
 

If states decide not to expand Medicaid in 2014, the uncompensated care provided by hospitals could ballon by more than $53 billion by 2019, according to a new analysis from the National Association of Public Hospitals and Health Systems (NAPH).

Hospitals and other health-care providers are expected to be influential figures in statehouses next year as legislatures debate whether or not to expand Medicaid under the Affordable Care Act (ACA). The law originally envisioned every state increasing Medicaid eligibility to 133 percent of the federal poverty level, expected to add 17 million people to state rolls.

But the Supreme Court ruled that the federal government couldn't force states to expand Medicaid, instead giving them a choice. While there has been plenty of posturing in the last few months, the final decisions will be made during the 2013 legislative sessions. Data points like the one offered by NAPH are likely to be mainstays in legislative hearings and backroom debates.

NAPH estimated that hospitals would provide $53.3 billion more in uncompensated care by 2019 than originally expected under the ACA. That figure is based on several factors: the Congressional Budget Office has projected that 6 to 10 million fewer people will be insured because the Medicaid expansion is now optional. Hospitals also already provide a significant amount of uncompensated care: in 2010, 87 hospitals surveyed by NAPH accounted for $8.4 billion. The group represents 200 hospitals and health systems nationwide.

Lastly, the ACA included a provision that cut Medicaid disproportionate share hospital (DSH) payments, which go to hospitals that perform a greater share of uncompensated care, by $14.1 billion. That piece was drafted under the assumption that more people would receive insurance coverage -- but if states opt out of the Medicaid expansion, then hospitals could provide more uncompensated care than expected and be paid less for it.

"Congress certainly didn't foresee this level of uninsured and uncompensated care when it enacted the ACA," NAPH president and CEO Bruce Siegel said in a statement. "In this light, the deep cuts to disproportionate share hospital payments over the same period are simply untenable and will prove devastating to society's most vulnerable and to the providers who care for them."

The association urged Congress to restore the DSH payments and, while stopping short of outright advocating for the Medicaid expansion, asked policymakers to "devise a safety net funding policy that ensures access to care for all who need it."

The map below details each state's uninsured population that could be eligible for Medicaid and each state's expected spending for the ACA's Medicaid expansion. Darker states have higher percentages of uninsured residents who are potentially Medicaid eligible. Click a state for additional information.

 

Zoom out to view Alaska and Hawaii data.

SOURCE: Medicaid eligibility estimates obtained from Urban Institute analysis of American Community Survey and Integrated Public Use Microdata Series data. State spending figures obtained from Medicaid Coverage and Spending in Health Reform: National and State‐by‐State Results for Adults at or Below 133% FPL, published May 2010 by the Kaiser Family Foundation.

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