With more states expanding Medicaid coverage under the Affordable Care Act, hospital operators are reporting fewer unpaid medical bills and falling charity and uncompensated care expenses.
Under the health law, states have the option to expand Medicaid at little cost to the states. And more are doing so with Montana Gov. Steve Bullock last week signing a bipartisan legislation to expand Medicaid under the health law to more than 70,000 people.
This, coupled by an improving economy, is boosting revenues for hospital companies like Community Health Systems (CYH),
“We certainly have seen a decline in uninsured patients and an increase in insured patients mostly in Medicaid and commercial exchange patients,” University Health chief financial officer Steve Filton told analysts last week.
Universal Health said the “provision for doubtful accounts” decreased to $124 million during the first quarter of this year compared to $182 million in the fourth quarter of 2014. Meanwhile, Universal Health’s expenses for charity care and discounts to uninsured patients fell to $287 million in the first quarter of this year compared to $320 million in the fourth quarter of last year.
“During the several years of the recession beginning in 2009 . . . through 2013, we had multi-year pressure from the recession from uncompensated care, which put a burden on our volumes,” Filton added. “And then beginning in 2014 with the benefits of the Affordable Care Act providing insurance to millions of people, who didn’t have it before as well as the improving economy allowing people to go back to work and get reinsured, all that’s been helpful in our markets I think because the decline was a multi-year decline.”
The federal government traditionally picks up a little more than half the cost of Medicaid. But funding under the health law is unlike past efforts to expand Medicaid in that the federal government will pick up the full tab this year as well as 2016. The state gradually has to pick up some costs in 2017, but by 2020, the federal government is still picking up 90% or more of the Medicaid tab.
Though Montana’s expansion still faces federal approval, there are still 28 states plus the District of Columbia that have expanded the health insurance program for poor Americans under the health law. This year, for example, Indiana’s Medicaid expansion began Feb. 1 and Pennsylvania’s began Jan. 1.
Tenet Healthcare reports its first quarter earnings on Monday. HCA and Community Health report first quarter results Tuesday.
Wondering how Medicaid expansion under the Affordable Care Act will affect your health care? The Forbes eBook Inside Obamacare: The Fix For America’s Ailing Health Care System answers that question and more. Available now at Amazon andApple.
