Under ACA, some cities' hospitals fare better than others

The Affordable Care Act's impact on U.S. cities--and by extension, their hospitals--has varied dramatically, according to a new study by the Urban Institute and the Robert Wood Johnson Foundation.

Major cities in states that chose to expand Medicaid eligibility have fared better under the ACA than cities in states that have elected not to expand Medicaid, although the rate of uninsured dropped in both, according to the study.

The study examined 14 cities throughout the U.S., equally divided between states that expanded Medicaid and those that did not. It predicts that in cities in states supporting the ACA, the number of residents entering Medicaid and the Children's Health Insurance Program will expand by 38.5 percent in the next few years. In cities in non-ACA states, the program expansion would be 10.7 percent, driven primarily by the individual mandate.

Twenty-four states have not expanded Medicaid, and political battles over expansion in Pennsylvania and Virginia rage on. In states where expansion is not taking place, hospital systems, such as Carolinas Healthcare, expect their bottom lines to take significant hits.

In those cities in pro-ACA states, the study estimated the total number of uninsured will drop by an average of 57 percent, with the decreases ranging from 49 percent in Denver to as much as 66 percent in Detroit by 2016. That's primarily due to the number of poor people in each city; in Detroit, for example, nearly two-thirds of residents live below the federal poverty line.

By contrast, in Charlotte, N.C., where Medicaid is not being expanded, the rate of uninsured will decline by about 36 percent. In Houston, it will decline about 25 percent.

New federal spending will range from $4.1 billion in Seattle to $27 billion in Los Angeles, the nation's second-most populous city.

But in Houston, the nation's fourth most-populous city, new spending will be less than $10 billion. Had Texas expanded Medicaid eligibility under the ACA, it would reach $16 billion, the study concluded. In Philadelphia, it will increase by about $4 billion, in contrast to nearly $13 billion if Pennsylvania had expanded Medicaid eligibility.

"Cities in states not expanding Medicaid would face other challenges in addition to having more uninsured residents and foregoing additional revenue," the study said. "There will be reductions in Medicare reimbursement and Medicare and Medicaid disproportionate share hospital payments under the ACA, which could be particularly difficult for urban safety-net providers serving uninsured people across a wider region. Also, many states require counties to maintain indigent care programs or pay part of the costs of Medicaid."

To learn more:
- read the study (.pdf)

Suggested Articles

Account reps from Epic have told customers that the medical records giant will not be pursuing further integrations with Google Cloud, CNBC reported.

Healthcare CEOs admit they thought they’d be farther along in the transition to value-based care than they are today, a new survey shows. 

An analysis found that spending on hospital shoppable services, the subject of a CMS transparency rule, are minimal.