The Supreme Court’s decision that states can opt out of the Affordable Care Act’s Medicaid expansion without financial penalty puts in jeopardy another tenet of the law that aims to reduce uncompensated care costs for hospitals, Bloomberg/San Francisco Chronicle reports.
According to Bloomberg's BGOV Barometer, hospitals' uncompensated care costs totaled $39.3 billion in 2010. The figure, which includes charity care and unpaid bills, accounted for approximately 5.8% of hospitals' expenses for the year, according to the American Hospital Association. Further, recent industry data indicate that uncompensated care increased by 82% between 2000 and 2010.
The ACA is expected to expand insurance coverage to about 30 million uninsured U.S. residents, more than one-third of whom would gain coverage through the Medicaid expansion, the Bloomberg/Chronicle reports. According to Sheryl Skolnick, an analyst with CRT Capital Group, the state-based exchanges and the Medicaid expansion in the ACA "would eliminate almost all of the uncompensated care."
However, Republican governors in some states -- Florida, Louisiana, Mississippi, South Carolina and Texas -- have said they will not expand their programs. Skolnick said, "There is a very real connection between the Medicaid expansion and the amount of uncompensated care that would go away.
Hospitals in Mississippi report about $525 million annually in uncompensated care, the Bloomberg/Chronicle reports. Uncompensated care costs Texas hospitals about $5 billion annually, according to John Hawkins, a lobbyist for the Texas Hospital Association.
Gwen Combs, vice president for policy at the Mississippi Hospital Association, said opting out of the Medicaid expansion is the "difference between hospitals being in a really, really bad world of hurt and just a regular world of hurt."
Hawkins said Texas hospitals have not given up on convincing Gov. Rick Perry (R) to participate in the Medicaid expansion (Wayne, Bloomberg/San Francisco Chronicle, 8/2).
State Budget Directors' Expansion Opinions Unfavorable, GAO Survey Finds
State budget directors mostly view the Medicaid expansion as a significant cost that will generate few savings, according to a Government Accountability Office survey released on Wednesday, the Washington Post's "Wonkblog" reports. The survey, which received 42 responses from state budget directors, asked about the effect of the Medicaid expansion on state budgets, including related savings and expenses.
The survey found that most state budget directors thought that states would end up spending more to expand their Medicaid programs and update their systems to handle the influx of new patients. Few said that the expansion would deliver savings, with just eight directors saying that they believe their state would save because of reduced uncompensated care costs (Kliff, "Wonkblog," Washington Post, 8/2).