Affordable Care Act Reduces Hospitals' Unpaid Bills

Hospitals will save $5.7 billion in uncompensated care costs this year because of the Affordable Care Act, with those found in states that have expanded Medicaid projected to save up to $4.2 billion of the total amount, according to a report from the Department of Health and Human Services.

The report is based on surveys from several state hospital associations and financial reports from hospital operators including Tenet Healthcare and HCA Holdings. They show that Medicaid expansion has reduced the number of patients who cannot pay their bills, said Sylvia Mathews Burwell, the secretary of Health and Human Services.

Twenty-seven states have expanded Medicaid. Many of those that had balked are likely to reconsider the issue when state legislatures convene next year.

The study was part of an Obama administration campaign to strengthen public perceptions of the Affordable Care Act before the midterm elections in November and the start of the next annual open enrollment period for people to buy health insurance, which starts Nov. 15.

The first enrollment period ended five months ago and the White House orchestrated an extensive effort to enroll seven million people in private health plans through the federal and state insurance exchanges.

The percentage of the U.S. population that was uninsured had been growing for more than a decade before the Affordable Care Act. But the subsequent expansion of coverage through the Health Insurance Marketplace and Medicaid brought the uninsured rate to record lows, resulting in the volume of uncompensated care provided in hospitals and emergency departments falling greatly in the last year, particularly in Medicaid expansion states, according to Health and Human Services.

The Obama administration cited the report on Wednesday as new evidence that hospitals gain financial benefits and more paying customers when states expand eligibility.

Reducing uncompensated care costs among hospitals, particularly those serving large populations of poor people, is a key goal of the Affordable Care Act. The Medicaid expansion extends coverage to nearly everyone living near the federal poverty line.

Overall, 10.3 million uninsured Americans have gained medical coverage since the law's enrollment provisions took effect a year ago, according to researchers and various reports.

In June, a quarterly report from the Colorado Hospital Association reviewed 465 hospitals in 30 states, 15 of which had expanded Medicaid and 15 that did not. The study showed more people were finding coverage who previously didn't have any, rather than people with private insurance switching to public insurance under Medicaid's eased eligibility requirements.

Researchers concluded that the previously uninsured represented the large majority of new Medicaid enrollees.