Moody's: AZ Medicaid expansion will benefit hospitals

Hospitals in Arizona fought hard for Medicaid expansion and their victory will also reap them significant financial benefits, reported the Arizona Daily Star.

According to a new report from Moody's Investors Service, the state's participation in Medicaid will cause the number of self-pay patients within the Grand Canyon State to drop dramatically.

Despite being one of the most politically conservative states in the U.S., Arizona Gov. Jan Brewer embraced Medicaid expansion earlier this year, and was able to get the Legislature to approve expansion with few restriction--most notably a circuit breaker that would reduce enrollment should funding from the federal government shrink. Under the Affordable Care Act, the cost of expanding Medicaid is fully covered for the first three years by the federal government, and 90 percent in year four and onward.

"Although Medicaid tends to be a weaker payer than Medicare and commercial insurers, reimbursing about 70 percent of costs, services provided to self-pay patients are often completely written off as charity care or bad debt," the Moody's report observed, according to the Star.

Moreover, the expansion of Medicaid will also reverse cuts previously made to the program that had dropped 300,000 from the state's rolls in 2011.

As a result, the report expected the finances of two of the state's leading hospitals-- the University of Arizona Medical Center and Yuma Regional Medical Center-- will strengthen because those facilities treat a large number of low-income and uninsured patients.

To learn more:
- read the Arizona Daily Star article
- check out the Moody's report (subscription required)