MIAMI (AP) — Hospitals nationwide could lose half a billion dollars in federal funding for uninsured patients next year under the national health overhaul — a loss that will hit especially hard in states that decided against expanding Medicaid coverage. Cuts could jump to $4 billion in 2020, according to estimates released Monday by federal health officials.
Hospitals that treat a large number of uninsured residents have relied on federal funding in the past to offset the cost. But the Patient Protection and Affordable Care Act (PPACA) assumes that more residents will have Medicaid or private health insurance, meaning hospitals would see fewer uninsured patients and need less assistance.
But hospitals in states that declined to expand Medicaid — such as Florida, Texas and Pennsylvania — stand to lose the federal funding without a corresponding increase Medicaid-covered patients to offset it. The decision not to expand means potentially millions of residents in those states who would have been eligible for the expanded Medicaid coverage will continue going to the emergency room when they are sick — and hospitals will be stuck with the bill.
As originally written, PPACA required states to accept the Medicaid expansion as a condition of staying in the program. But a Supreme Court decision last summer gave each state the right to decide.
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So far, 21 states plus Washington, D.C., have accepted the expansion, while 14 states have turned it down. Another 15 states are still weighing options.
Among the states that aren’t expanding Medicaid, Texas hospitals could lose more than $56 million next year, Pennsylvania’s could lose nearly $34 million, Missouri’s could lose about $26 million, Alabama’s may lose $17 million and Florida hospitals could stand to lose more than $10 million, according to rough estimates from the Department of Health and Human Services.
“You have continuing high levels of uncompensated care but the funding you had designated to address it is shrinking so the amount of unmet costs will grow,” said Bruce Rueben, president of the Florida Hospital Association.
The formula determining cuts in each state is complicated, but generally states that have a smaller number of uninsured patients will receive larger reductions than states with high numbers of uninsured patients. States have broad discretion to distribute the payments to hospitals and the allotments also vary greatly among states, so part of PPACA “reforms federal payments to states to help pay for uncompensated care for uninsured and low income populations,” federal officials said in a statement.