What does the recent literature say about Medicaid expansion?: Economic implications for providers

A large body of research has investigated the effects of Medicaid’s expansion of the Affordable Care Act (ACA), adopted by all but 11 states as of January 2023. Previous KFF reports published at 2020 And 2021 reviewed more than 600 studies and concluded that expansion is associated with gains in coverage, improved access, and health and economic benefits to states and service providers; These generally positive outcomes persist even as recent research considers findings to be increasingly complex and specific. This research provides context for Ongoing discussions about whether to expand Medicaid in states that haven’t already, where coverage options for many low-income adults are limited. In non-expansion states, more than 2 million individuals fall into a coverage gap. Before efforts At the federal level, closing the coverage gap temporarily in 2021 and 2022 has not worked, and Republican control of the House following the November 2022 midterm elections makes it highly unlikely that Congress will do so in the near future. So, Attention It returns again to non-expansionary states, with many officials citing economic concerns Medicaid Expansion Adoption.

While states are required to cover 10% of the cost of expanding Medicaid, the federal government covers the remaining 90%, providing an infusion of federal money for expanding states. By funding coverage for low-income people who would likely be uninsured, the Medicaid expansion offers potential economic benefits to health care providers who provide care to that population.

This brief edition updates previous reviews of the KFHD literature by summarizing 24 studies published between April 2021 and December 2022 on the economic impact of Medicaid expansion on providers. These studies determine the positive effects of expanding Medicaid on the finances of hospitals and other providers, consistent with the Before Research. These findings are particularly relevant given the country’s fiscal pressures Medicaid Providers during the coronavirus pandemic. While Federal relief funds helped prop up hospital margins in the first two years of the pandemic, Hospitals It is beginning to face increased challenges in 2022 due to the ongoing pandemic effects, reduced government relief, and broader economic trends such as pressure on wages.

Our methodology is consistent with the methodology Advance analytics. The results of the study are divided into two themes: the effects on payer mix and the financial performance of service providers (Figure 1). In each topic area, we first briefly summarize findings from previous research (published between January 2014 and March 2021) and then highlight key findings from recent research that add to this body of evidence. For more information on previous studies, see 2021 And 2020 Literature review sections on economic impacts on service providers. For citations from January 2014 through August 2022, see the bibliography.

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Previous studies have overwhelmingly found that Medicaid expansion has led to improvements in the payer mix (a decrease in uninsured patients and/or an increase in Medicaid-covered patients). Outcomes include improvements in payer mix for hospitalization, emergency department visits, and visits to community health centers and other safety net clinics. Studies identify improvements in motivation mix overall and among patients being treated for a range of specific conditions, including various types of cancer, traumatic injury, and substance use disorder. Consistent with payer mix improvements, studies also found lower uncompensated costs of care (UCC) in general and for certain types of hospitals, including those in rural areas.

Consistent with previous research, nearly all recent studies have found that expansion led to improvements in motivation mix, including among patients treated for certain conditions, as well as decreases in UCC. Of the eighteen studies examining the effect of expansion on the motivation mix, eleven found Both Decrease in the percentage of uninsured patients And increases in patients covered by Medicaid,AndAndAndAndAndAndAndAndAndAnd Five additional studies found increases in Medicaid patients but did not examine or find any effect of the expansion on the proportion of uninsured patients.AndAndAndAndAnd Consistent with these improvements, three studies also found a decrease in UCC for hospitals and other providers.AndAnd Notably, all of the studies that looked at emergency department visits found improvements in motivation mix. Studies continue to look at and find motivation mix improvements for patients who have been treated for specific conditions, such as different types of surgery and behavioral health admissions. Although studies evaluating payer mix most often look at hospitals, two recent studies looked at coverage of primary care patients; Both found that Medicaid-covered visits to primary care providers increased.AndAnd Only two recent studies found no effect of expansion on payer mix but focused narrowly on the important reach and safety net provider.And

Financial performance of hospitals and other service providers

Previous research has found that expanding Medicaid has improved the financial performance of hospitals and other providers, although these effects may vary somewhat by type of hospital. Studies indicate that expansion contributed to an increase in hospital revenues in general and from specific services. Some studies suggest that expansion has reduced the number of annual hospital closures. Although studies have found that expansion has improved provider operating margins and profitability, these results vary by provider type. For example, some studies have found that despite declines in UCC, improvements in financial performance were strongest (or were only noted among) rural and small hospitals. A small number of studies indicate that improvements in payer mix and UCC in hospitals may have been partially offset by increases in Medicare reimbursement and declines in commercial revenue.

Recent studies continue to find mostly positive financial effects of expanding into certain types of hospitals, clinics, and other providers. Of eight studies in this area, six found that expansion led to positive financial outcomes for a range of types of service providers,AndAndAndAndAnd Two recent studies indicate that these positive effects did not extend to critical access hospitals or free and charitable clinics.And

  • Hospitals. Studies show that hospitals have seen higher reimbursement and that decreases in unpaid care costs outweigh increases in Medicare reimbursement for a net positive effect.And One study found that expansion was associated with a significant decrease in hospital closures, but that effect was concentrated among hospitals without maternity units, while the expansion did not have lasting effects on the closure of maternity units in hospitals. Federal law requires all states, including those that have not expanded Medicaid, to provide Medicaid coverage to pregnant women with incomes of at least 138% of the poverty level.
  • Clinics and primary care providers. Studies have found that federally qualified health centers and community health centers experienced an increase in revenue after expansion.And Also, one study found higher salary growth for primary care providers in expansion versus non-expansion situations.

I look forward

These new studies add to the body of Before Research Finding significantly positive economic effects of expansion on service providers. Such results are especially important in light of the financial pressures they are experiencing Medicaid Providers During the coronavirus pandemic, including recently challenges hospitals face as federal relief funds expire. This research also provides context for Ongoing discussions about whether to expand Medicaid in states that haven’t already. in addition to, Previously literature On the financial impact of expanding on States It found positive effects, including budget savings, revenue gains, and overall economic growth. Although research in this area appears to have slowed, these findings are still relevant: state costs continue to be a major issue in expansion discussions and there have been fluctuations in the economic conditions of the country during the COVID-19 pandemic. Future research could also capture the effect of the add-on Temporary financial incentive included in The American Rescue Plan Act (ARPA) of 2021 (It is estimated to more than offset the state’s costs of expansion for the first two years after implementation.)

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