Among the many benefits of the Affordable Care Act has been an impressive nationwide drop in unpaid medical bills. An International Business Times article illustrates that as more Americans sign up for healthcare coverage, hospital companies have seen their charity-related and unpaid (also known as uncompensated) expenses fall.
These reductions are due to higher numbers of enrollees in both private plans and Medicaid, which provides health coverage for lower-income individuals and families. Bruce Japsen, a Forbes columnist, states that multiple hospital companies should be reporting these lower expenses in the coming weeks.
These savings are expected to benefit the entire hospital industry, especially as more states expand their Medicaid coverage. A Kaiser Family Foundation (KFF) study (below) shows that, under Obamacare, 31 states and the District of Columbia have accepted federal support to expand Medicaid programs over the last 18 months.
As of the middle of 2016, the total for U.S. acute care hospitals’ charity care and uninsured discounts is $550 million. The first six months of 2014 saw $586 million spent; this represents a nearly 7 percent decrease. One good example of these financial benefits is Universal Health Services Inc., one of the nation’s largest hospital management companies.
For the first half of 2014, the firm’s acute care hospitals’ expenses related to charity care, uninsured discounts and provision of “doubtful accounts” came out to $331 million. But for the first half of 2016, this amount dropped 17 percent, to $274 million. “Doubtful expenses” are those that aren’t expected to be paid back.
In fact, Steve Filton, the company’s chief financial officer, said that the company’s uncompensated care costs have declined for the last six quarters. A good part of Universal’s recent savings is actually due to a larger number of Medicaid patients and the program’s expansion. That’s because the firm has acute care facilities in California, Nevada and the District of Columbia, all of which have expanded Medicaid.