Most hospitals and hospital associations have advocated for the expansion of Medicaid under the Patient Protection and Affordable Care Act because it would help boost revenues in a time when uncompensated care continues to grow. But some new findings suggest Medicaid expansion could actually hurt some hospitals' bottom lines.
According to a study from The Lewin Group (pdf), this would be the case in New Hampshire.
The group said expanding Medicaid in New Hampshire would reduce the state's uninsured population from more than 170,000 currently to 71,000 by 2020. In addition, the 26 hospitals in the state would record less uncompensated care and more overall revenue.
However, hospitals' net income would actually be less under a Medicaid expansion scenario. According to the report, health systems would see an increase in net income of roughly $113.1 million under Medicaid expansion, but without the expansion, net income is expected to increase by $158.2 million — a difference of more than $45 million.
The reason? Lewin Group analysts said they expect "there will be more people newly covered by private insurance if the state does not expand Medicaid," and commercial payor rates are higher than Medicaid.
The Lewin Group noted, though, that New Hampshire has "unique characteristics" — including a low uninsured rate compared with the national average and the state's "especially low Medicaid reimbursement rate" — that make this type of analysis incomparable for other state Medicaid expansions, according to an Advisory Board report.
According to a study from The Lewin Group (pdf), this would be the case in New Hampshire.
The group said expanding Medicaid in New Hampshire would reduce the state's uninsured population from more than 170,000 currently to 71,000 by 2020. In addition, the 26 hospitals in the state would record less uncompensated care and more overall revenue.
However, hospitals' net income would actually be less under a Medicaid expansion scenario. According to the report, health systems would see an increase in net income of roughly $113.1 million under Medicaid expansion, but without the expansion, net income is expected to increase by $158.2 million — a difference of more than $45 million.
The reason? Lewin Group analysts said they expect "there will be more people newly covered by private insurance if the state does not expand Medicaid," and commercial payor rates are higher than Medicaid.
The Lewin Group noted, though, that New Hampshire has "unique characteristics" — including a low uninsured rate compared with the national average and the state's "especially low Medicaid reimbursement rate" — that make this type of analysis incomparable for other state Medicaid expansions, according to an Advisory Board report.
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