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���������� Note: Evidence of declining uncompensated care and multi-year savings may contribute to more states taking on Medicaid expansion, as the 2016 presidential election promises to hold the ACA as a major policy indicator.

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As States Expand Medicaid, Unpaid Hospital Bills��Disappear

Forbes; Bruce Japsen, 5/3/2015

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With more states expanding Medicaid coverage under the Affordable Care Act, hospital operators are reporting fewer unpaid medical bills and falling charity and uncompensated care expenses.

Under the����law, states have the option to expand Medicaid at little cost to the states. And more are doing so with��under the health law to more than 70,000 people.

This, coupled by an improving economy, is boosting revenues for hospital companies like Community Health Systems (CYH),����(THC),������(HCA) and ����Services (UHS) that are all seeing major reductions in numbers of uninsured patients.

“We certainly have seen a decline in uninsured patients and an increase in insured patients mostly in Medicaid and commercial exchange patients,” University Health chief financial officer Steve Filton told analysts last week.

Universal Health said the “provision for doubtful accounts” decreased to $124 million during the first quarter of this year compared to $182 million in the fourth quarter of 2014. Meanwhile, Universal Health’s expenses for charity care and discounts to uninsured patients fell to $287 million in the first quarter of this year compared to $320 million in the fourth quarter of last year.

“During the several years of the recession beginning in 2009 . . . through 2013, we had multi-year pressure from the recession from uncompensated care, which put a burden on our volumes,” Filton added. “And then beginning in 2014 with the benefits of the Affordable Care Act providing insurance to millions of people, who didn’t have it before as well as the improving economy allowing people to go back to work and get reinsured, all that’s been helpful in our markets I think because the decline was a multi-year decline.”

The federal government traditionally picks up a little more than half the cost of Medicaid. But funding��under the health law is unlike past efforts to expand Medicaid in that the federal government will pick up the full tab this year as well as 2016. The state��gradually has to pick up some costs in 2017, but by 2020, the federal government is still picking up 90 percent or more of the Medicaid tab.

Though Montana’s expansion still faces federal approval, there are still 28 states plus the District of Columbia that have expanded the health insurance program for poor Americans under the health law. This year, for example, Indiana’s Medicaid expansion began Feb. 1 and Pennsylvania’s began Jan. 1.

��quarter earnings on Monday.��d����report first quarter results Tuesday.

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