Hospitals in non-Medicaid expansion states continue to pay big price

Hospitals in states that have refused to expand Medicaid under the Affordable Care Act (ACA) are taking a financial hit, according to RevCycle Intelligence.

As of February, 17 states have yet to expand Medicaid eligibility up to the ACA-mandated 138 percent of the federal poverty level, which would be $11,770 for an individual or $33,465 for a family of four, the article noted. In some states, such as Mississippi, few single adults are actually eligible for coverage at all. Partly as a result, one out of three hospitals in that state are vulnerable for closure.

The amount of lost revenue is potentially enormous. In Kansas, which has a population of less than 3 million, its decision to forego Medicaid expansion is costing it roughly $1 billion a year, according to RevCycle Intelligence.

Meanwhile, in states that have expanded Medicaid eligibility, uncompensated care costs dropped by some $7.4 billion in 2014, according to data from the U.S. Department of Health and Human Services.

"In many expansion states, roughly 75 percent of the coverage increase came via Medicaid expansion states," Katherine Hempstead, a senior program officer at Robert Wood Johnson Foundation, told RevCycle Intelligence.

The Obama administration for now appears to be taking a wait-and-see approach. Last month, U.S. Department of Health and Human Services Secretary Sylvia Mathews Burwell said the disproportionate amount of financial distress hospitals are experiencing in non-expansion states means it is a matter of time before more states jump onto the expansion bandwagon.

President Obama has also offered additional incentives to the holdout states, putting in his proposed fiscal 2017 budget an extension of extra subsidies the federal government would offer to states that expand.

To learn more:
- read the RevCycle Intelligence article

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