The end of the Medicaid continuous enrollment provision will add to the operating pressures of nonprofit hospitals and could affect their credit quality over time, Fitch Ratings said April 12.
Any increase in the uninsured population will be another negative factor adding to the already high burden of increased expenses and elevated inflation, Fitch said. Certain hospitals, such as safety-net facilities and those in states where there is no Medicaid expansion, are likely to fare the worst.
"Hospitals with a greater percentage of Medicaid patients tend to have thinner margins, and an increase in uninsured patients would disproportionately pressure operating results," Fitch said.
Continuous enrollment added approximately 15.5 million people to Medicaid programs between February 2020 and December 2021, Fitch said, with the number of uninsured people dropping to a "historic low" of 8 percent.
States are now subject to outreach and reporting requirements over the next 12 months as they attempt to determine patient eligibility in return for continuing to receive additional federal payments.