Medicaid expansion in Michigan increased compensated care

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A new study by the University of Michigan at Ann Arbor has concluded that expansion of the state's Medicaid eligibility led to much better rates of compensated care at the state's hospitals.

The proportion of uninsured patients treated at the state's 130 hospitals dropped by 4 percent, while the proportion covered by Medicaid rose nearly 6 percentage points, according to the data, which was provided by the Michigan Health and Hospital Association and covered the last nine months of 2014.

Overall, 94 percent of the state's hospitals treated fewer uninsured patients, while the number of patients covered by Medicaid increased at 88 percent of the hospitals, according to the study, published in JAMA.

“This is evidence that broader availability of insurance coverage for residents of Michigan is translating into coverage at the time when people are most in need of it--namely, when they are sick enough to be in the hospital,” said Matthew M. Davis, M.D., the lead author of the study, in a statement. “The Healthy Michigan Plan appears to be shifting the balance for almost all Michigan hospitals, to have a higher proportion of patients who have insurance coverage.”

That Medicaid expansion has helped the finances of hospitals has been the conclusion of other studies, such as one undertaken earlier this year by the Center for Children and Families and the Georgetown University’s Health Policy Institute.

However, nearly 20 states have so far declined to expand Medicaid eligibility. Hospitals in those states, particularly rural facilities, have endured serious financial struggles as a result.

“When uninsured individuals are so ill they need to be hospitalized, it poses financial risks to them as well as to the hospitals that they’re admitted to,” Davis said in the statement. “Medicaid expansion in 31 states and the District of Columbia has reduced that risk. Meanwhile, uninsured individuals in states that haven’t expanded the program continue to face that risk--as do the hospitals there.”

- here’s the study
- read the statement