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ACA ruling could cost hospitals $53B in added uncompensated care

Supreme Court ruling will leave more Americans uninsured, CBO says

Topics: Health Policy, Market Trends, Strategy, Payer and Regulatory Policy, Medicaid, Reimbursement, Finance, Payer and Regulatory Policy, Revenue Cycle, Uncompensated Care

October 29, 2012

A new study finds that hospitals may face more than $53 billion in additional uncompensated care costs because of the Supreme Court ruling on the Affordable Care Act, which allows states to forgo the law's Medicaid expansion.

The study—produced by the National Association of Public Hospitals and Health Systems (NAPH)—used data from the American Hospital Association, the U.S. Census Bureau, and the Congressional Budget Office (CBO) to calculate the effect of states opting out of the health law's Medicaid expansion.

In its study, NAPH notes that safety-net hospitals agreed to lower Medicaid disproportionate share hospital (DSH) payments beginning in 2014 because they expected more patients to obtain insurance through ACA's insurance markets and the Medicaid expansion. Over five years, the safety-net hospitals would lose about $14.1 billion in federal subsidies.

However, CBO in July forecast that an additional six million to 10 million individuals will be left uninsured by 2019 as a result of the Supreme Court's ruling on the ACA. As a result, NAPH estimated that hospitals will face as much as $53.3 billion in additional costs from uncompensated care by 2019.

"Now the cuts to DSH—unchanged by the Court's decision—will come against a backdrop of greater uncertainty regarding expanded coverage and the potential for significant shortfalls in federal support for safety-net hospitals," the report says (Zigmond, Modern Healthcare, 10/25 [subscription required]).  

Where does your state stand on Medicaid?

See our updated tracker of where states stand on the ACA's Medicaid expansion. Click to expand either a quick-to-scan graphic or an interactive graphic. (Note: interactive graphic may not be optimized for all mobile devices.)

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