The Affordable Care Act and its Impact on the Fiscal State of Hospitals
The patient protection and affordable care act reforms were anticipated to influence positive change for hospital finances. The expansion of state financed Medicaid programs promised to lower the uncompensated care costs that were incurred by hospitals. The expansion of the Medicaid programs included accommodating children below 26 years to gain medical coverage under a caregiver’s insurance plan. The age where a child was considered dependent and covered by the parent’s insurance was previously 18 years or 22 years if the child was a full-time college learner. Medicaid also influenced a significant increase in the number of Newly Insured as the state targeted to insure all Americans. The uncompensated care costs resulting from the expansion of Medicaid is significant, these uncompensated care costs are the responsibility of private sponsors, as well as governments. Medical institutions offload higher uncompensated care costs when more people get insured under the Affordable care act.
The impact of uncompensated care is a reduction in hospital spending. After the Affordable Care Act or Obama care act was passed, hospitals saw a noticeable reduction in uncompensated care costs. It is however important to note that, while uncompensated care costs are lowered for hospitals, the costs are transferred to the healthcare consumers, employees, and taxpayers. Relying on such avenues necessitates the use of reimbursement where hospitals offer medical services and send the bill to those responsible for covering the medical costs. Such reimbursement is done at a large scale following the increased health care coverage, and an economic depression for instance may impose a strain on government resources leading to shortfalls in reimbursements. Recent research shows that Medicaid payment shortfalls have increased as the Affordable Care Act continues to be enacted across states in the United States, and as more people get insured (Young et al.,2019). The increasing shortfalls have started to offset the savings realized as the Affordable Care Act was enrolled, and Health Care institutions are the most affected as they incur the costs of health care, in case of a shortfall in reimbursement.
References
Young, G. J., Flaherty, S., Zepeda, E. D., Singh, S., & Rosenbaum, S. (2019). Impact of ACA Medicaid Expansion on Hospitals’ Financial Status. Journal of Healthcare Management, 64(2), 91-102.