The expansion of healthcare coverage to millions of previously uninsured Americans under the Affordable Care Act has helped produce an overall decline in nationwide uncompensated care from $34.9 billion to $28.9 billion in 2014, according to an analysis by the Kaiser Family Foundation.
Here are three things to know about the reduction in uncompensated care under the ACA.
1. Almost all of the decline occurred in states that expanded Medicaid, where uncompensated care costs were $10.8 billion in 2014 — a 35 percent or $5.7 billion decline from 2013 — the year before ACA coverage expansions came into full effect, according to the report.
2. However, based on financial data and stakeholder interviews, hospitals expect some of the financial gains associated with lower rates of uncompensated care to be offset by higher volumes of Medicaid payments that may be lower than hospital costs.
3. Many hospitals and health systems are concerned that the increase in patient revenue under the ACA will not fully offset the reduction in federal Medicaid disproportionate share hospital payments. Under the ACA, DSH allotments — which totaled $11.7 billion in 2014 — will decrease by $2 billion in fiscal year 2018 and decline by a total of $43 billion between 2018 and 2025, according to the report. Safety-net hospitals are particularly vulnerable because of their high dependence on Medicaid DHS payments, high volumes of uninsured patients, few commercially or Medicare-insured patients and generally a weaker financial condition, according to the report.