One of the most obvious and important benefits of the Affordable Care Act is that it should reduce the number of people who go to hospitals and can’t afford to pay their bills. In fact, that has already begun to happen, especially in states that passed the Medicaid expansion portion of the law.
Community Health Systems CFO Larry Cash told investors and analysts during the company’s first-quarter earnings call Wednesday that the ACA should decrease self-pay admissions from about 8 percent to about 4 percent over a three-year period. The company has seen some early moderate impacts, especially in Medicaid expansion states where self-pay admissions have already begun to drop, Cash said.
“We believe we have recognized, although on a roughly calculated basis, at least $10 million from the ‘woodwork effect’ [in which people currently eligible for Medicaid but who had yet to sign up will now do so because of the ACA] and the Affordable Care Act for additional Medicaid business,” Cash said.
Brentwood-based LifePoint was also high on the ACA’s impacts during its first-quarter earnings call last week, with company leadership emphasizing Medicaid expansion’s effects in many of the states where it operates hospitals.
Another hospital group, HCA, said that in the four states in which it operates that have expanded Medicaid, they’d seen a 29 percent decline in admissions of people without insurance, but a 5.9 increase in the non-expansion states.
A 29 percent decrease is pretty huge, meaning big savings for the hospitals, but also big savings for the local and state governments that won’t have to figure out how to help the hospitals pay for all that uncompensated care.
It should also reduce both hospital and insurance costs because that unpaid medical care gets passed on to everyone else.