Slowing financial gains from ACA to affect smaller hospitals: 5 things to know

Quarterly results from some of the major for-profit hospital operators in the U.S. suggest financial gains from the Affordable Care Act are slowing, according to a recent Bloomberg report.

Here are five things to know about the trend and what is causing financial gains under the health reform law to fade.

1. The factors, such as Medicaid expansion, that have caused the uninsured rate to fall under the ACA are weakening. "We don't really have any new states adopting Medicaid so you don't have that expansion," Mikhail Foux, the head of municipal strategy at Barclays in New York, told Bloomberg. Montana is the only state set to expand Medicaid in 2016.

2. Rising health plan premiums may cause some consumers to go without health insurance or lose their policies for not paying their bills, which could cause financial gains under the ACA to slow. "It's very safe to bet that a lot of hospitals across the country are not going to see as many people getting insurance as they expected," said Jason McGorman, an analyst with Bloomberg Intelligence.

3. Consumers may also drop their marketplace health insurance plans if they do not include their preferred provider, according to Mr. McGorman.

4. The diminished effects of the ACA were highlighted when Nashville, Tenn.-based HCA Holdings and Dallas-based Tenet Healthcare reported their most recent financial results. HCA saw its charity care costs increase as uninsured admissions grew 13.6 percent from a year earlier. Tenet also reported higher charity and uninsured admissions than in the same period of last year.

5. Although large hospital operators are feeling the effects of less financial growth under the ACA, smaller hospitals may be impacted the most by the slowing gains. That's because small facilities lack clout to negotiate prices for drugs and medical equipment, according to the report.

More articles on healthcare finance:

Geisinger to begin offering refunds to unsatisfied patients
31 Mississippi hospitals at risk of closing
How CHS, Tenet, UHS, LifePoint and HCA fared in Q3

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