Medicaid expansion linked with $2.8M decrease in uncompensated care per hospital

Hospitals benefited financially from the 2014 Medicaid expansion under the Affordable Care Act, a study published in the Journal of the American Medical Association found.

Specifically, in 2014 hospitals in 19 states that expanded Medicaid recorded significant decreases in uncompensated care costs and increases in Medicaid revenue compared to the 25 states that did not expand Medicaid. 

The study analyzed American Hospital Association and CMS data for nonfederal general medical or surgical hospitals in fiscal years 2011 through 2014. Hospitals in states where Medicaid was expanded prior to January 2014 were not included in the analysis.

Below are three study findings.

1. Between 1,200 and 1,400 hospitals per fiscal year in states with Medicaid expansion each saw a $2.8 million decline in annual uncompensated care.

2. Hospitals in states with Medicaid expansion saw a $3.2 million increase in annual Medicaid revenue per hospital.

3. Medicaid expansion was associated with improved excess margins, but not improved operating margins in 2014.   

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