The expansion of Medicaid and the availability of subsidized coverage through health insurance marketplaces will generally increase the demand for medical care at safety net hospitals and reduce the amount or proportion of care provided by these institutions to uninsured persons. The most recent estimates from the Congressional Budget Office (CBO) predict that there will be 25 million fewer uninsured persons by 2023 compared to what would have happened without health reform, and that Medicaid will account for about half of the newly insured (CBO 2013). Increased demand could potentially come from both newly insured patients who used safety net hospitals when they were uninsured, as well as newly insured patients who previously had little or no health care utilization.
The extent of the increase in demand for care at safety net hospitals will vary considerably depending on a number of factors, but especially on the size of the increase in the insured population in the community. States and communities vary considerably in the size and proportion of their population uninsured prior to the ACA, due to differences in local socioeconomic characteristics, variations in the local economy that affect enrollment in private insurance coverage, and differences in state Medicaid eligibility policies (Buettgens and Hall 2011).
Even within states, communities will vary in terms of how many uninsured people gain coverage. Many safety net hospitals will continue to serve large numbers of uninsured people. CBO estimates that about 31 million people will remain uninsured by 2023; the size of the uninsured population will vary across communities for a number of reasons (CBO 2013). An especially important consideration will be the size of the uninsured immigrant population in the community: undocumented immigrants are barred from enrolling in Medicaid or receiving subsidized coverage in the health insurance marketplaces, whereas legal immigrants are permitted to purchase subsidized coverage and are eligible to enroll in Medicaid if they have been in the country for at least five years. Communities that have relatively large undocumented immigrant populations will therefore continue to have large uninsured populations (Hoefer et al.
Safety net hospitals may be able to increase demand from newly insured patients to the extent that they are able to assist and encourage uninsured patients to enroll in Medicaid or private insurance coverage, which they become eligible for on January 1, 2014. Many safety net hospitals have considerable experience in providing application assistance and enrolling eligible individuals in Medicaid and CHIP, but it is unclear whether additional support will be needed to facilitate private insurance enrollment through the health plan marketplaces (Snyder et al. 2012). The rate of “churning”—the extent to which people switch back and forth from public and private coverage because of changes in their eligibility status—could also pose a challenge to safety net hospitals in their ability to track patients and bill insurers for services.