In states that have opted to expand Medicaid, some public hospitals are seeing positive financial results for the first time in decades.
In those states, Medicaid expansion has provided millions of previously uninsured patients with coverage for medical care. For instance, Chicago-based Cook County Health and Hospital System in 2014 made its first profit in 180 years. Cook County Health served more insured patients than uninsured last year, substantially lowering its rate of uncompensated care, which the health system attributes to Illinois' decision to expand Medicaid under the Affordable Care Act, according to the Chicago Tribune.
In contrast, in states that chose to hold out on expanding Medicaid, the impact of the healthcare law on public hospitals has been trivial, according to Reuters.
There are approximately 4 million low-income, uninsured Americans residing in states that have not expanded Medicaid who would have qualified for coverage if their state had expanded it, according to Kaiser Family Foundation data cited in the report. Public hospitals in those states are likely to feel a tighter financial squeeze over time.
"Providers in these states are going to be at a disadvantage," Jim LeBuhn, senior director at Fitch Ratings, told Reuters. "It's going to make it that much more challenging for these providers to maintain their financial profiles."
In the 30 states that expanded Medicaid, nonprofit hospitals reported an average of 13 percent less bad debt from unpaid hospital bills in 2014, while "hospitals in on-expansion states saw bad debt increase through much of the year," according to Moody's Investors Services.
According to data from KFF, hospitals in Medicaid expansion states reported an average 32 percent drop in uninsured patients and a 40 percent reduction in charity care costs. The number of uninsured patients fell by just 4.4 percent in non-expansion states, while charity care costs decreased by 6.2 percent.