Unpaid Medical Bills Reduced By ACA
According to HHS the expansion of Medicaid and the increased coverage under the ACA has led to a reduction in unpaid medical bills saving taxpayers and hospitals billions.
Highlights from the factsheets can be found below (for a list of citations see page 3 of this PDF).
NOTE: This information is from a 2015 report. Logically however it should be true moving forward that the ACA has led to a reduction in unpaid medical bills due primarily to Medicaid expansion (as Medicaid remains expanded). Thus this information is relevant in 2019 and beyond, even though it is from 2015.
Unpaid Hospital Bill Reduction Under the ACA
The Commonwealth Fund studied the relationship between the ACA’s Medicaid Expansion and hospital’s uncompensated care. Their study found that Medicaid expansion reduced the cost of uncompensated care in expansion state hospitals by $6.2 million. Only 0.3 to 0.4 percentage points were saved in non-expansion states.
Based on estimated coverage gains in 2014, ASPE estimates that hospital uncompensated care costs were $7.4 billion lower in 2014 than they would have been had coverage remained at its 2013 level, at $27.3 billion versus $34.7 billion. This represents a 21 percent reduction in uncompensated care spending.
• $5.0 billion of this reduction comes from the 28 Medicaid expansion states plus Washington DC, representing a 26% reduction in uncompensated care spending and 68% of total savings. $2.4 billion comes from the 22 Medicaid non-expansion states, representing a 16% reduction in uncompensated care spending and 32% of total savings.
• If non-expansion states had proportionately as large increases in Medicaid coverage as did expansion states, their uncompensated care costs would have declined by an additional $1.4 billion.
Positive Effects of Medicaid Expansion on People
Medicaid is the third largest poverty-reducing program in the country and the second-largest program in reducing the rate of Americans in extreme poverty (<50% of the federal poverty level).
• In the Oregon Medicaid experiment, researchers found a 25% decline in the probability of having an unpaid medical bill sent to a collection agency and almost eliminated catastrophic out-of-pocket medical costs.
• Pre-ACA Medicaid expansions have been associated with reductions in bankruptcy rates.
Positive Effects of Medicaid Expansion on States
Despite the talking points, studies have shown that expanding Medicaid can benefit states, and not just due to federal funding.
• States that choose not to expand their Medicaid programs as of July 2014 will forego an estimated $88 billion in federal funding from 2014-2016 and will reduce the Nation’s economic output by approximately $66 billion through 2017.
• States have gained savings from reductions in expenditures on behavioral health programs (mental health and substance abuse services).
• In Kentucky, the first state to release a post-expansion study with updated estimates on the impact of their Medicaid expansion, the estimated economic contribution is projected to be $30.1 billion from 2014 to 2021. Their report also finds that there will be a net positive impact on their state budget of $919.1 million and job growth of 12,000 jobs in the state fiscal years 2014 and 40,000 jobs from the state fiscal years 2014 to 2021.
From ASPE.HHS.Gov
“Expanding Medicaid has positive economic effects. These two fact sheets highlight information on the economic impact of Medicaid expansion on individuals’ financial circumstances, uncompensated care costs and state Gross Domestic Product (GDP). Research confirms that expanding Medicaid will benefit states both directly and indirectly by generating additional federal revenue, increasing jobs and earnings, increasing Gross State Product (GSP), increasing state and local revenues (via provider taxes and fees and increased prescription drug rebates), and reducing uncompensated care and hospital costs.”
Economic Impact of the Medicaid Expansion (PDF-3 Pages)
Insurance Expansion, Hospital Uncompensated Care, and the Affordable Care Act (PDF-1 Page)
Author: Thomas DeMichele
Thomas DeMichele is the head writer and founder of ObamaCareFacts.com, FactsOnMedicare.com, and other websites. He has been in the health insurance and healthcare information field since 2012. ObamaCareFacts.com is a...
Thomas DeMichele's Full Bio
Bonita houmita
I know a very nice man , whom was working several years for a company that did not offer health insurance, however his wife was covering him on her plan thru her employer, this is what happened to him, right after obama care became active, his wife company terminated the insurance coverage and decided it was cheaper to pay the penalty than pay for health insurance, inaddition the company this nice man worked for said the same and was under 50 employees a small company that refused and couldn’t afford to provide any sort of plan, shortly after his wife lost her health insurance plan he suffered a major heart attack, they are both uninsured, the cost of his treatment was more than they could afford, for now he was not working due to his health, the problem is that they both were uninsured at this time period and could not afford a health care plan, so came tax time and they were both hit with a penalty that cost them each 3’300.00 dollars, they were told that the penalty was based on income, they could not afford the health care bills after the heart attack, and feel thru the cracks of a unaffordable UN informed and neglect of a cobra plan thru the wifes insurance, and thru our government , it needs to be clear just how folks are penalized ACCORDING TO INCOME and it could be huge penalties, IN ADDITION after recovery from his heart attack he lefted a company he had worked for years and found a job with a company that offered health insurance, his name is Rick Morgan of portsmouth Va. He works for pallet and heating company and has been a heating and air conditioning mechanic for 30 years, he is very concerned about this penalties and feels it is unjust and unfair, that he and his wife have to pay this penalty that he had to leave a company he had been with for years and that folks like him are getting the shaft, some companies have a waiting period of 6 months for coverage ans some folks don’t work for a company that offers coverage and have no choice but to leave and start over with vacation seniority retirement etc? Lost of folks are very upset about this and it’s happened to them too, rick believes all folks should have health insurance and there should be a single payer source and the insurance companies need to be put out of business, medicare for all, it would have been better to have paid more tax a health care tax such as medicare and had health care coverage than to have had a heart attack and no health care coverage and than be penalized 3,300 each and now struggling to pay irs and his premiums for health care coverage
John S Rewinkel
Uninsured billing from hospitals should be required to be billed at the average negotiated rates of the top 3 carriers for each state.
Sarah
I really think some sort of cap needs to be put on what the people are being charged for medical care by healthcare providers. Healthcare should be a basic human right and not something you receive or don’t receive based on how much money one has. Why does it cost $3000 a day for “room and board” whenever one must be hospitalized?