Expanded Medicaid Eligibility is Decreasing Charity Care

The Affordable Care Act’s (ACA) Medicaid eligibility expansion provision has reduced charity care and self pay in hospitals in states that have adopted the provision, according to a new study by the Colorado Hospital Association’s Center for Health Information and Data Analytics.


Authors of the study reviewed monthly financial and volume data for the first quarter of 2014 for 465 hospitals in 30 states. Analysts and leaders of publically traded health systems reported similar results last month.


“This is more evidence of the financial impact on hospitals of state decisions regarding Medicaid eligibility expansion,” said an HFMA executive. “These financial effects will only increase as the disproportionate share hospital payments cuts included in the Affordable Care Act continue to roll out.” (“Study: Less Self Pay, Charity Care in Expansion States,” HFMA Weekly News, June 6, 2014)


Study Details


Of the 30 states studies, 15 had expanded Medicaid and 15 had not. The authors

explored volume trends through changes in charges and payer mix. The results show that:


  • The Medicaid proportion of patient volume at hospitals in states that expanded Medicaid increased substantially in the first quarter of 2014.
  • The Medicaid proportion of total charges increased over three percentage points to 18.8 percent in 2014 from 15.3 percent in 2013. (In contrast, the amount of Medicare volume varied little in the same timeframe.)
  • The increase in Medicaid volume, which occurred only in expansion states, is due to Medicaid expansion. The parallel decrease in self-pay and charity care shows that previously uninsured patients are now enrolled in Medicaid.
  • Expansion states had a 30 percent reduction in average charity care per hospital—from $2.8 million to $1.9 million.
  • At the same time, self-pay care declined by 25 percent in expansion state hospitals—from 4.7 percent to 3.1 percent.
  • Medicaid, self-pay and charity care showed no change outside normal variation for hospitals in non-expansion states in 2014:
  • In non-expansion states, average charity care spending slightly increased between the two quarters, to $4.2 million from $3.8 million.
  • The share of self-pay charges at non-expansion state hospitals increased to 5 percent from 4.8 percent.

(Impact of Medicaid Expansion on Hospital Volumes, Colorado Hospital Association/Center for Health Information and Data Analytics, June 2014; “Study: Less Self Pay, Charity Care in Expansion States,” HFMA Weekly News, June 6, 2014)


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