Hospitals in 25 states that chose to expand Medicaid under the Affordable Care Act treated fewer uninsured patients and charity cases in the first quarter ended March 31, according to a study released this week.
The study, conducted by the Colorado Hospital Association (CHA), looked at 465 hospitals in 30 states, 15 of which had expanded Medicaid and 15 that did not. It showed more people are 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.
The net result of Medicaid expansion is a reduction in uncompensated care, which could help reduce health care costs, according to the CHA's Center for Health Information and Data Analytics. The average increase in Medicaid volume is 29% in hospitals in states that expanded Medicaid, the study said.
"These findings not only affirm that more people are finding health care coverage who didn't have it before, but also that it is having a positive impact by reducing the levels of uncompensated care at hospitals, which could further efforts to reduce health care costs," said Steven Summer, the CHA's chief executive officer.
Among other requirements, the Affordable Care Act expands Medicaid eligibility to include those adult Americans making up to 133% of the poverty level who aren't eligible for Medicare.
The study further found a 25% decrease in self-paying patients, which often results in bad debts. It also found a 30% drop in charity care for the uninsured.
Uncompensated care is the cost of hospital care for which providers receive no payment from either the patient or insurer. In Colorado alone it totaled about $500 million in 2012, according the CHA.
Those losses are absorbed by the hospitals, which decrease services or access to services, or shifted to private insurers. Health policy analysts say this "cost shifting" is one of the driving forces behind rising health care costs.
The Congressional Budget Office estimates the federal government will cover nearly 93% of the costs of the Medicaid expansion through 2022. Critics of expansion, such as conservative think tank Heritage Foundation, have stated that the already overburdened program could draw some younger, presumably healthier people who otherwise would have to buy private insurance.
To read the full Colorado Hospital Association report, "Impact of Medicaid Expansion on Hospital Volumes," click here.