Recommended reading
Medicaid Expansion Opt-Outs and Uncompensated Care, New England Journal of Medicine
Medicaid Expansion: Framing and Planning a Financial Impact Analysis
The Financial Benefit to Hospitals from State Expansion of Medicaid
Under the Affordable Care Act (ACA), hospitals are likely to gain $2.59 in revenue from newly enrolled Medicaid beneficiaries for every dollar they lose from private health insurance, according to research conducted by the Urban Institute.
Beginning in January 2014, the ACA’s Medicaid expansion extends public coverage—which is reimbursed at a lower rate than private insurance—to adults making below 138 percent of the federal poverty level (FPL). This expansion increases hospitals’ public insurance revenue by creating a larger Medicaid coverage pool. At the same time, it will mean some people currently paying for private coverage will drop it and enroll in Medicaid, resulting in lower payments when they receive hospital care. Whether or not hospitals will ultimately fare better or worse financially has long been debated.
This report looks at whether hospitals stand to gain more revenue under the ACA's Medicaid expansion compared with if no states expand Medicaid eligibility.
