But in addition to presenting a barrier to health coverage, the lack of Medicaid expansion in some states has also been a barrier toward driving down the level of so-called “uncompensated care.” That care is health services provided by hospitals to people who lack Medicaid or any other kind of insurance coverage, leaving the hospital unpaid.
Garfield noted that after Obamacare kicked into high gear in 2014, “we saw substantial declines nationally in uncompensated care.” But Garfield added, “Almost all of this decline was in expansion states.”
At the same time, Garfield said, the Affordable Care Act “actually reduced the amount of uncompensated-care reimbursement to the states.” In other words, hospitals in non-expansion states were not seeing much, if any, reduction in their uncompensated-care costs at the same time their states were getting less money from the federal government to offset those costs.
The amount of money at stake can be dramatic.
“You’re looking at the uncompensated care in Texas still up in the $4- billion- to $5-billion-a-year range,” said Lance Lunsford, spokesman for the Texas Hospital Association. “A large portion of that [uncompensated-care burden] would be relieved” if Texas expanded Medicaid, Lunsford said.
Hospitals end up eating some of those costs. But the remaining share, Lunsford noted, is covered by property taxes in the counties where the hospitals are located, as well as by “higher premiums” for insured people, whose health plans end up being charged higher rates for services than they would otherwise be if more people had health coverage.
Despite that, Lunsford said, “a lot of folks think they’re not affected by the high rate of uninsured” in the state. “They don’t really see it as their problem, sometimes.” Although Texas hospitals have tried to make the case that lack of coverage for hundreds of thousands of people is indeed a problem for all state residents, they haven’t been successful in convincing Gov. Gregg Abbott to abandon his staunch opposition to expanding Medicaid.