Medicaid Expansion: Effects On Hospital Finances And Implications For Hospitals Facing COVID-19 Challenges.

ABSTRACT

States' decisions to expand Medicaid may have important implications for their hospitals' financial ability to weather the coronavirus disease 2019 (COVID-19) pandemic. This study estimated the effects of the Affordable Care Act (ACA) Medicaid expansion on hospital finances in 2017 to update earlier findings. The analysis also explored how the ACA Medicaid expansion affects different types of hospitals by size, ownership, rurality, and safety-net status. We found that the early positive financial impact of Medicaid expansion was sustained in fiscal years 2016 and 2017 as hospitals in expansion states continued to experience decreased uncompensated care costs and increased Medicaid revenue and financial margins. The magnitude of these impacts varied by hospital type. As COVID-19 has brought hospitals to a time of great need, findings from this study provide important information on what hospitals in states that have yet to expand Medicaid could gain through expansion and what is at risk should any reversal of Medicaid expansions occur.