Study examines Affordable Care Act's impact on uncompensated care

December 27, 2012, Vanderbilt University Medical Center

The decision by several states not to expand Medicaid health insurance for the poor may create unintended cuts for hospitals that provide uncompensated care, according to a study by John Graves, Ph.D., a Vanderbilt policy expert in the Department of Preventive Medicine.

Graves used financial data from U.S. hospitals and insurance data in each state to predict cuts in Medicare and disproportionate share (DSH) funds paid to the nearly three-fourths of U.S. hospitals that serve low-income patients. The results, published in the Dec. 20 issue of the , put numbers behind the impact of funding changes and predict what the difference would be if Medicaid is, or is not, expanded in each state.

"Expanded insurance through the exchanges alone will trigger lower DSH payments to hospitals," Graves said. "The problem comes in where much of the uncompensated care provided will remain the same if Medicaid is not expanded, yet DSH cuts will still occur. Hospitals will need to recoup these DSH losses either by providing less uncompensated care, or by shifting the costs onto everyone else."

As planned under the Act (ACA), Medicare DSH cuts will begin with a 75 percent across-the-board reduction in 2014 as new insurance exchanges come on line across the country. To reduce the impact of the cuts, the government has devised a calculation to add some DSH funds back, based on the proportion of citizens who are uninsured in each state. But because of the Supreme Court determination that states could not be compelled to expand Medicaid, who becomes covered in each state will vary widely.

Graves found that some states that do not expand Medicaid will be offering coverage to a greater number of people in their insurance exchanges, while continuing to leave most low-income, uninsured people without coverage. DSH cuts will still move forward in those states, placing a burden on hospitals that provide the most uncompensated care.

On the flip side, Graves found states that are planning to expand Medicaid coverage could end up covering as much as 60 percent of their uninsured citizens, significantly increasing the amount of care covered by public and private insurers and offsetting the reduction in DSH funds.

Graves said of the top five states his calculations show will experience the most unintended DSH reductions, three—Texas, Louisiana and Florida—have already announced they will not expand Medicaid.

The federal government has set no time limit on states opting in or out of Medicaid expansions, but DSH cuts are currently set to begin in 2014.

Explore further: Gov. Perry says Texas won't expand Medicaid

Related Stories

Gov. Perry says Texas won't expand Medicaid

July 10, 2012
(AP) — The Republican governor of Texas said Monday that his state won't establish an online marketplace for patients to shop for insurance or expand the government health care program for the poor and disabled — ...

Expanding Medicaid to low-income adults leads to improved health, fewer deaths: study

July 25, 2012
A new study from Harvard School of Public Health (HSPH) finds that expanding Medicaid to low-income adults leads to widespread gains in coverage, access to care, and—most importantly—improved health and reduced ...

Poorest Americans at risk if states opt out of Medicaid expansion

August 6, 2012
Health coverage for the poorest Americans could be in jeopardy in many states as a result of the U.S. Supreme Court's ruling last month on the Affordable Care Act, according to a new legal analysis. The report examines federal ...

Feds rule on health care law's Medicaid expansion

December 10, 2012
(AP)—The Obama administration says Republican-led states must commit to fully expanding their Medicaid programs to take advantage of generous funding in the federal health care law.

Higher Medicaid payments to dentists associated with increased rate of dental care among children

July 12, 2011
Children and adolescents from states that had higher Medicaid payment levels to dentists between 2000 and 2008 were more likely to receive dental care, although children covered by Medicaid received dental care less often ...

Recommended for you

Number of older people with four or more diseases will double by 2035, say researchers

January 23, 2018
A study published today in Age and Ageing, the scientific journal of the British Geriatrics Society, reports that the number of older people diagnosed with four or more diseases will double between 2015 and 2035. A third ...

Placental accumulation of flame retardant chemical alters serotonin production in rats

January 22, 2018
A North Carolina State University-led research team has shown a connection between exposure to a widely used flame retardant chemical mixture and disruption of normal placental function in rats, leading to altered production ...

Marijuana use does not lower chances of getting pregnant

January 22, 2018
Marijuana use—by either men or women—does not appear to lower a couple's chances of getting pregnant, according to a new study led by Boston University School of Public Health (BUSPH) researchers.

Women run faster after taking newly developed supplement, study finds

January 19, 2018
A new study found that women who took a specially prepared blend of minerals and nutrients for a month saw their 3-mile run times drop by almost a minute.

Americans are getting more sleep

January 19, 2018
Although more than one in three Americans still don't get enough sleep, a new analysis shows first signs of success in the fight for more shut eye. According to data from 181,335 respondents aged 15 and older who participated ...

Wine is good for you—to a point

January 18, 2018
The Mediterranean diet has become synonymous with healthy eating, but there's one thing in it that stands out: It's cool to drink wine.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.