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Michigan study latest to suggest Medicaid expansion led to fewer uninsured hospital stays

Effect only seen in expansion states, researchers from the University of Michigan said.

Jeff Lagasse, Associate Editor

A group of researchers from the University of Michigan have found that Medicaid expansion nationally under the Affordable Care Act significantly reduced uninsured hospital stays in 2014, the latest in a slew of reports to suggest the reforms have resulted in fewer numbers of uninsured.

The early analysis suggests that coverage expansion increased access to physicians and cut down on some of the cost-related barriers to care, with the largest effects occurring in the 29 states -- including Washington D.C. -- that expanded Medicare by the first quarter of 2015.

[Also: West Virginia hospitals see uncompensated care drop after Medicaid expansion]

Sayeh Nikpay, part of the university's research team, said the reduction should help out hospitals financially.

"If it's the case that a lot of people were uninsured and they now gained Medicaid … that's good for the hospital, because they're bringing in more revenue for that patient than if they were uninsured," said Nikpay.

However, from the hospital's standpoint, there's a complicating factor, she said: Someone who's eligible for both Medicaid and private insurance may opt for Medicaid coverage because of the costs associated with private insurance. Since insurance reimburses at a higher rate than Medicaid, that could constrain the savings experienced by hospital systems by limiting their revenue.

[Also: Feds fund efforts to help hospitals link Medicare/Medicaid patients to social services]

"But it's too soon to know if that dynamic is happening," said Nikpay.

The findings suggest that while states that expanded eligibility for Medicaid in 2014 saw dramatic decreases in uninsured hospital stays and increases in Medicaid-covered stays, those that didn't expand the program saw little change in the mix of patients for inpatient care.

Expansion states experienced a 7 percent  jump in the Medicaid share and 6 percent drop in the uninsured share, representing a 20 percent increase and a 50 percent decrease, respectively. Meanwhile, changes in Medicaid and uninsured discharges were small in non-expansion states -- less than 1 percent -- and so were not statistically significant.

Financially, said Nikpay, hospitals are not the only ones who stand to benefit from expansion.

[Also: More low-income women get mammograms in Medicaid expansion states, study says]

"If I was a single woman and I made $12,000 a year and I lived in Michigan, maybe before 2014 I wouldn't have qualified for Medicaid because I didn't have kids, and most likely I couldn't have gotten insurance," she said. "And my employer probably wouldn't have offered coverage, so I would have walked into a hospital and would have had to pay out of pocket.

"After the ACA," she said, "it means I can get Medicaid coverage, and I can go to the hospital without having to pay a huge bill. That reduces the financial strain on me, which is very good for individuals, and could also improve my health. The financial protection aspects are very good and very valuable."

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The findings saw no significant change in the share of inpatients with private insurance in expansion states relative to non-expansion states, but the study authors caution that it should not be taken to mean that the ACA did not expand private coverage -- previous work, they say, suggests that it has.

"A more likely explanation," according to the report, "is that the majority of uninsured individuals who were sick enough to need hospital care in 2013 gained Medicaid, instead of private coverage, in 2014 because they had very little income." The authors also state that initial problems with the Marketplace enrollment websites meant that much of the enrollment in private health plans occurred at the end of the first quarter of 2014.

Data for the analysis was culled from HCUP Fast Stats, an online database query tool from the Agency for Healthcare Research and Quality.

Twitter: @JELagasse

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