Medicaid expansion determines hospitals' health reform fate

As states decide whether to expand Medicaid under the Affordable Care Act, new research shows the benefits of newly covered Medicaid patients outweigh losses in privately insured patients, according to a study from the Urban Institute and the Robert Wood Johnson Foundation.

Researchers note that Medicaid expansion will shift some patients from private to public coverage. But hospitals will see a $2.59 increase in Medicaid revenue for every dollar they lose in private payments, RWJF researachers said yesterday in an announcement.

Moreover, if states choose to expand their Medicaid programs, hospitals would gain an additional $293.9 billion from 2013 to 2022. That represents a 22.8 percent increase in Medicaid reimbursements, the study noted.

However, the study notes hospitals must still help fund health reform's coverage expansion, even if their state opts out.

"Whether the ACA creates net economic pain or gain for hospitals will depend  significantly on whether states add Medicaid expansion to the remainder of the federal legislation," the study states.

State hospital associations have been using similar economic arguments to convince mostly conservative legislatures to expand Medicaid, FierceHealthFinance previously reported.

Demonstrating the financial benefits of expanding coverage seems to be working as more Republican governors are opting in to the reform provision, including those from Ohio and Michigan.

For more:
- here's the study abstract
- read the RWJF announcement and report (.pdf)