Debt collection dropped in states that expanded Medicaid

Can be used for finance/insurance stories.

A new study by the Federal Reserve Bank of New York shows a drop in the levels of healthcare-related debt that collection agencies retrieve. 

There is just one catch: Those hospitals have to operate in states that expanded the eligibility of the Medicaid program under the Affordable Care Act.

Medicaid eligibility expansion has occurred in 31 states to date. There have been a variety of impacts on hospitals in states that have expanded the program versus those that have not. For example, states that have expanded Medicaid have reported a reduction in uncompensated care costs but more rural hosptials have closed in states that did not expand Medicaid eligibility.

The per capita collection balances in states that expanded Medicaid coverage among patients with high levels of being uninsured peaked at the second quarter of 2014 at around $300, according to the Federal Reserve data. It has since dropped to about $225 as of the third quarter of last year. But among states that did not expand Medicaid, it continued to rise from around $400 to roughly $425.

Among those individuals who were more likely to be insured, the collection balances were slightly higher in non-expansion states, but the curves in both kinds of states remained about the same.

“We offer suggestive early evidence that the Medicaid expansion is fulfilling the goal of health insurance: providing 'peace of mind' by protecting against financial hardship. Future decisions by states to expand or curtail Medicaid coverage will yield additional evidence on the financial impact of health insurance,” the report said.

To learn more:
- read the study

Related Articles:
Medicaid expansion slashed uncompensated care costs for hospitals
Rural healthcare crisis: 13% of rural hospitals could close