The question of whether health insurance equals healthcare access is complicated in the roughly two dozen states that have chosen not to expand Medicaid—an option granted by the U.S. Supreme Court in its June 2012 decision that upheld the law’s main tenets. Even with the federal government paying the full cost for the first three years (decreasing to 90% by 2020), some states have argued that the economic burden will be too great.
According to a recent analysis by the Kaiser Family Foundation, roughly five million uninsured adults may now fall into a “coverage gap” as a result. In essence, they will earn too much to be covered under the highly variable Medicaid caps established by individual states but too little to receive any federal tax credits to help pay for insurance in the exchanges. With limited options, the report suggests, they are likely to remain uninsured.
Safety net hospitals also may be squeezed between conflicting state and federal Medicaid priorities. During the initial Affordable Care Act (ACA) negotiations, hospitals agreed to $155 billion in cuts over 10 years, including sharp reductions in Disproportionate Share Hospital (DSH) payments, in anticipation of seeing a significant decrease in uninsured patients. Despite lower DSH payments, the hospitals expected to recoup the money through more Medicaid or private insurance reimbursements.
"The Medicaid expansion being optional throws a kink in all of that,” says Leighton Ku, PhD, MPH, director of the Center for Health Policy Research at George Washington University School of Public Health and Health Services in Washington, D.C.
The ongoing open enrollment in insurance exchanges will make up part of the total. But in states that are not expanding Medicaid, the number of newly insured patients may not compensate for the DSH reductions. Robert Berenson, MD, a senior fellow at the Washington, D.C.-based Urban Institute, a nonpartisan think tank focused on social and economic policy, says the resulting net loss could put some hospitals under additional financial strain.
"There will be pressure within the states from hospitals and from the business community to expand Medicaid because, otherwise, they’re bearing the burden of it,” he says.
Bryn Nelson is a freelance medical writer in Seattle.