Safety-net hospitals, haven for the uninsured, are seeing more covered patients since the expansion of Medicaid

By Melissa Patrick
Kentucky Health News

Hospitals that most often treat the poor and uninsured  are seeing fewer uninsured patients since the new health law’s expansion of Medicaid, Phil Galewitz reports for Kaiser Health News. Kentucky’s safety-net hospitals have also seen a drop in their uninsured patients.

Safety-net hospitals, which are often not paid for the billions of dollars it costs to care for the disproportionate share of poor and uninsured people they care for, will benefit most from the health law’s expansion to more than 13 million people this year, Galewitz writes.

Hospitals across the country had expected this outcome, but told Galewitz in interviews that it has happened “faster and deeper” than anticipated — “at least in the 25 states that expanded Medicaid in January.”

Kentucky is one of the states that agreed to the Medicaid expansion and has expanded health coverage to some 413,000 people, with 75 percent of them reporting that they did not have coverage before signing up on Kynect, the state’s health insuance exchange.

Michael Rust, president of Kentucky Hospital Association, said figures from his members won’t be available until July, but “Anecdotally, I can tell you that more people do have coverage,” adding later that “most are on Medicaid.”

The University of Kentucky has seen a decrease in uninsured patients. “The number of uninsured patients seeking care at UK HealthCare since Medicaid expansion took effect in January has decreased,” said Mark D. Birdwhistell, UK vice president for health system administration. “Even though we have seen a double-digit increase in the number of services provided, request for financial assistance is down when compared to this period last year.”

Investor-owned hospitals are also being affected by the expansion of coverage. HCATenet Healthcare Corp.Community Health Systems, some of which own safety-net hospitals, told Galewitz “they saw their rates of uninsured patients drop by as much as a third in the first quarter of 2014 in hospitals located in Medicaid-expansion states,” he writes.

“An Urban Institute study published in the May edition of Health Affairs estimated the costs of uncompensated care to hospitals were as high as $45 billion in 2013, with government programs defraying an estimated 65 percent of those costs,” Galewitz reports. That made the hospital industry one of the first to support the Affordable Care Act, he notes, agreeing to take funding cuts “exceeding $150 billion over a decade” in return for more paying patients.

However, because the Supreme Court ruled that states could not be forced to expand Medicaid, hospitals in the 24 states that didn’t are suffering the funding cuts, without the “corresponding reduction in uncompensated care,” Galewitz writes.

Hospital officials told Galewitz that the biggest impact of the expansion of Medicaid is that patients can now go to a primary-care doctor instead of the emergency room for routine care. Kentucky ERs have reported a surge in patients since the law took effect. Galewitz notes that a study in Massachusetts following its Obamacare-like expansion showed an initial surge in ER use followed by a decline over several years.

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