A new report from Fitch Ratings predicts nonprofit hospitals in states that have chosen not to expand Medicaid will experience increasing financial challenges in 2014, and in years to come, while hospitals in states that have expanded Medicaid have already begun to realize the benefits of increased insurance coverage.
Here are six key things to know about Medicaid expansion under the Patient Protection and Affordable Care Act and how the decision to implement or forgo Medicaid expansion will affect states across the county, according to the report.
1. Twenty-six states and D.C. have implemented expanded Medicaid eligibility. In those states, 5.2 million people have gained new insurance through Medicaid or the Children's Health Insurance Program.
2. States that participate in Medicaid expansion are expected to receive an additional $83.6 billion in federal funding from 2014 to 2016, while states choosing not to expand Medicaid will be giving up roughly $88.1 billion over that period.
3. Fitch suspects that hospitals and health systems in states that have expanded Medicaid have been able to offset the negative impact of weak volumes and reduced Medicare reimbursement.
4. This year, Fitch has downgraded 10 hospitals. Five of the hospitals downgraded are in states that have not expanded Medicaid, and several of those downgrades were driven by operating performance declines related to funding and reimbursement pressures, which may have been lessened by Medicaid expansion.
5. Fitch has upgraded nine hospitals this year, and eight were in states that have expanded Medicaid.
6. Due to continued reimbursement cuts to Medicare payments and an expected federal Medicaid funding reduction, Fitch expects hospitals in states that have expanded Medicaid to continue to benefit from the increase in coverage, while hospitals in non-expanded states will continue to feel the burden.
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