<0> Fitch: Hospitals in States Not Expanding Medicaid Under ACA Face Financial Challenges </0>
<0> Fitch RatingsAdam Kates, +1-312-368-3180DirectorFitch Ratings, Inc.70 W. Madison StreetChicago, IL 60602orJames LeBuhn, +1-312-368-2059Senior DirectororMedia RelationsBrian Bertsch, +1-212-908-0549 (New York) </0>
Hospitals and healthcare systems operating in states not expanding Medicaid under the Patient Protection and Affordable Care Act (ACA) will likely face greater financial challenges and rating pressure than those operating in states expanding Medicaid, according to a Fitch Ratings report.
"Hospitals operating in states not expanding Medicaid, which usually have higher uninsured and poverty rates, will have to absorb the full impact of the ACA reimbursement cuts without the full benefit of increased insured volumes," said Adam Kates, Director in Fitch's Public Finance group.
Texas, Florida, Georgia, Louisiana, Mississippi, and South Carolina are not expanding Medicaid and have among the highest uninsured and poverty rates, and some of the most stringent Medicaid eligibility requirements. Fitch believes hospitals in these states, particularly those with weak payor mixes, will be particularly vulnerable.
Hospitals located in affluent areas with stronger payor mixes are likely to absorb non-expansion of Medicaid better than hospitals with weak service area demographics.
Several mitigating factors exist, however, including the ability of a state to expand Medicaid in the future, the fact that reimbursement reductions will be implemented over a period of time, and the redistribution of disproportionate share hospital funds to hospitals with the highest uncompensated care rates.
For more information, a special report titled "Adverse Expansion: Hospitals, States and Medicaid" is available on the Fitch Ratings web site at , or by clicking on the link.
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Applicable Criteria and Related Research: Adverse Expansion: Hospitals, States, and Medicaid