Impact of Insurance Expansion on Hospital Uncompensated Care Costs in 2014


United States hospitals provide roughly $50 billion in uncompensated care to uninsured and underinsured patients annually. Under the Affordable Care Act, a major insurance coverage expansion is taking place; this expansion is anticipated to reduce uncompensated care as more and more Americans gain insurance coverage. First, this brief examines earnings reports from major for-profit U.S. hospital chains and finds that volumes of uninsured admissions have fallen by 50-70% in states that have expanded Medicaid, and by 2-14% in states that have not expanded Medicaid. Next, the brief uses cost report data to estimate the change in hospital uncompensated care costs as a result of insurance expansion, and finds that U.S. hospitals are projected to save $5.7 billion in uncompensated care costs in 2014. About three-quarters of these savings ($4.2 billion) will accrue to states that have elected to expand Medicaid, and about a quarter ($1.5 billion) to states that have chosen not to expand Medicaid.

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