Research from the HHS Office of the Assistant Secretary for Planning and Evaluation anticipates lower hospital uncompensated care costs from expansion of health insurance under the Affordable Care Act.

“Early hospital financial reporting and member surveys from hospital associations indicate that, through second quarter 2014, payer mix is shifting in ways that will likely reduce hospital uncompensated care,” report authors say.

Uninsured and self-pay admissions have substantially fallen, as have uninsured/self-pay emergency department admissions, particularly in states that expanded Medicaid. Hospital admissions for Medicaid-covered patients have increased, but only in expansion states.

Coverage expansion via Medicaid and health insurance exchanges result in initial estimates of a 10.3 million decrease in the uninsured population and an 8 million increase in individuals covered under Medicaid. Consequently, “ASPE estimates that hospital uncompensated care costs will be $5.7 billion lower in 2014 than they otherwise would have been,” according to the report. “This represents a 16 percent reduction from baseline uncompensated care spending.”

New Hampshire and Pennsylvania, which originally did not expand Medicaid but now are doing so, had not yet enrolled individuals by the end of the second quarter and are excluded from the findings.

The complete 26-page report, “Impact of Insurance Expansion on Hospital Uncompensated Care Costs in 2014,” is available here.

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