Hospitals across the country will save at least $5.7 billion this year because of the millions of people who gained insurance under ObamaCare, senior administration officials announced Wednesday.
With more patients using health insurance to pay for care, fewer hospitals are left with the bill. As a result, officials predict that unpaid medical costs will drop by about 16 percent nationally, according to a report by the Department of Health and Human Services (HHS).
About three-quarters of those savings will come from the 36 states that expanded Medicaid, the low-income health insurance program. About 8 million people have enrolled in the program under the new law, an increase of about 14 percent.
“This is one of the reasons that you see hospitals and others supporting the expansion of Medicaid in a number of states,” HHS Secretary Sylvia Mathews Burwell said in a briefing.
Reducing the burden on hospitals and other healthcare providers has been a major piece of the Affordable Care Act. Burwell said the reforms were intended to create “a system where payment is for quality and you actually pay for services.”
Uninsured patients have long strained U.S. healthcare systems, costing about $84.9 billion in uncompensated care last year, according to a report by the Kaiser Family Foundation. People without insurance make up a majority of the uncompensated care.
Hospitals are left with about 60 percent of all unpaid medical bills, in addition to community health services and primary care doctors.
Most healthcare providers have received help from the federal government to pick up unpaid medical costs. About two-thirds are covered by the federal government, while state governments and charities chip in the rest.
The federal government was already expecting to pull back billions of dollars in reimbursements to hospitals and other healthcare providers. Under the Affordable Care Act, hospitals and other healthcare providers are slated to receive about 10 percent fewer federal dollars to cover unpaid medical bills – amounting to billions of dollars in cuts over the next five years.
Some hospitals, mostly those in states that have not expanded Medicaid, have criticized the drop in federal spending, because the cuts were made before the Medicaid expansion became voluntary for states.
Twenty states have resisted the expansion, and hospitals there could lose federal dollars without seeing the same savings as those in states that have expanded Medicaid. Nearly all states that have rejected Medicaid expansions are run by Republican governors or legislatures.
Burwell said the remaining governors might be enticed to change their mind after they compare their state’s savings with those that have expanded Medicaid.
“I think the more that we are able to attract conservative Republican governors, the more that those who have very strong feelings will, perhaps, listen,” she said.