A tale of two levels of uncompensated care

It's the best of times and the worst of times for uncompensated care in the United States.

Hospitals in states that expanded Medicaid eligibility under the Affordable Care Act (ACA) reap huge financial benefits. Despite the mess Oregon made of its health insurance exchange, uncompensated care in that state is down about 40 percent from the start of the year, according to the Portland Business Journal. Arizona's level of uncompensated care has dropped by about a third, with some institutions seeing drops of as much as 45 percent.

Meanwhile, the worst of times continue in the 24 states that have yet to expand Medicaid. Politicians believe they can still score short-term political points by denying healthcare access to poor people, and it appears unlikely that that equation is going to change soon.

Virginia had the best chance of breaking out of the Medicaid box and expanding coverage to about 373,000 of its poorest residents, but feckless Gov. Terry McAuliffe managed to torpedo any chances of that with breathtaking speed.

McAuliffe, a Democrat, had a chance to expand Medicaid in his state by refusing to sign a new budget into law unless it included funds to start the Medicaid expansion process. Based on the demographics in the Virginia statehouse, an override of his veto was unlikely. But he allowed himself to be outmaneuvered by a few procedural votes in the GOP-dominated General Assembly , the Richmond Times-Dispatch reports and a truly sleazy job offer to a Democratic senator who was enticed to resign, giving Republicans control of that body as well, according to the Washington Post. 

Even though McAuliffe campaigned on the promise of expanding Medicaid in his state--and was elected in part on that promise--he apparently was spooked by the potential fallout from a shutdown in Virginia based on the negative reaction of last year's federal shutdown over funding for the ACA. But McAuliffe ignored a few facts in his decision to roll over: A shutdown over giving people access to healthcare is a lot less toxic politically than trying to take away access to healthcare. The GOP is poised to take over the U.S. Senate in the mid-term elections, meaning if there was any political damage from last year's shutdown, it was temporary at best. And McAuliffe is limited to one term as governor under Virginia law, meaning reelection worries played no role in his decision.

Oh, and we've had plenty of government shutdowns in California over the decades when lawmakers came to an impasse over budgets, forcing state workers to accept "warrants" instead of actual money. Absolutely no one remembers them.

Obviously, I don't have all the facts that McAuliffe had, but if Republican governors such as Jan Brewer in Arizona and Rick Snyder in Michigan were willing to stick their necks out to get Medicaid expanded in their states, McAuliffe should have done the same. They're both still in office, with absolutely no harm done to their careers.

And the fallout? Virginia's hospitals expect the number of uninsured to continue to rise over the next year, the Daily Progress reports. And they also stand to lose about $386 million in payments from the Disproportionate Share Hospital (DSH) program between 2017 and 2022.

This same scenario is playing out in 23 other states. Hospitals have to juggle still-high rates of uninsured patients along with impending DSH cuts. Just one hospital system, Carolinas Healthcare, expects to lose $500 million over the next decade as a result.

And the Obama administration apparently isn't happy with those states' decision to stay put, which may be why the U.S. Department of Health and Human Services is strong-arming $276 million in Medicaid overpayments from Florida's hospitals sooner rather than later, according to the Tampa Bay Times. 

Had McAuliffe stood his ground, Medicaid expansion could have become a national story again, and other statehouses might have come under more pressure to change their minds. But he didn't, and this issue is likely going to fade into the background again. Five years from now, I am certain there will be little change in the best of times/worst of times scenario on uncompensated care. – Ron (@FierceHealth)

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