The cost to hospitals uncompensated care was reduced by an estimated $7.4 billion in 2014, according to the Department of Health and Human Services.
The agency also found that expansion of Medicaid under the AcA had a positive economic impact in the states that participated in the expansion; in Kentucky alone the economic benefit was estimated at over $900 million and 12,000 jobs in 2014.
The reduction in uncompensated care– the care provided by hospitals to patients who are uninsured or underinsured – was over $50 billion in 2013, HHS said. The ACA reduced this by $7.4 billion in 2014, the agency estimates. That includes a $5.5 billion reduction in charity care and $1.9 billion less of bad debt.
Of the total reduction, $5 billion was in states that expanded their Medical programs, while $2.4 billion was saved in non-expansion states.
The HHS review of the economic impact of Medicaid expansion looked at the program’s effect in the 28 states and the District of Columbia that took advantage of the federal government’s 100% of the cost of expanding Medicaid through 2016, decreasing to 90% by 2020.
The financial impact on low-income families makes Medicaid the third-largest poverty-reducing program in the country, and the second-largest in reducing the rate Americans in extreme poverty, HHS said.
A 10-state study found that the Medicaid expansion was financially advantageous in each of the states, while states that chose not to expand their programs will forego $88 billion in federal funding from 2014-2016, and will reduce their economic output by approximately $66 billion through 2017.
In Oregon, Medicaid expansion has resulted in a 25% decline in the likelihood of an unpaid medical bill being sent to a collection agency, according to HHS, and “almost eliminated catastrophic out-of-pocket medical costs,” which are a frequent cause of bankruptcy.
Kentucky, the first state to release a post-expansion economic impact study, estimated the economic contribution at $30.1 billion from 2014 to 2021. In 2014 the net positive impact on the state budget was $919.1 million, with 12,000 new jobs; by 2021, some 40,000 new jobs will be created, the Kentucky study estimates.
