The Differential Effect of Medicaid Expansions under the Affordable Care Act on the Operations of U.S. Hospitals
Presented at the 2019 AAA Annual MeetingWe examine the effects of the Patient Protection and Affordable Care Act (ACA) and voluntary Medicaid expansions on state-level uninsured population rates and hospital-level operations. Using a balanced sample of U.S. hospitals from 2011 through 2016, we find that while both the passage of the ACA and Medicaid expansions lower states’ uninsured population rates, only Medicaid expansions reduce uncompensated care costs, increase net revenue and compensated care costs, and increase overall costs of care. Furthermore, in states that expand Medicaid programs concurrently with the ACA, the ACA is associated with less compensated and overall care. Further, consistent with their charitable mission, we find the reduction in uncompensated care costs associated with Medicaid expansions is smaller for nonprofit hospitals than for-profit hospitals. Finally, contradicting arguments made by popular press, we find no evidence that the ACA improves hospital profitability.
AAA Annual Meeting
Cannon, James, Melvin Lamboy-Ruiz, Olena Watanabe.
"The Differential Effect of Medicaid Expansions under the Affordable Care Act on the Operations of U.S. Hospitals."
Accountancy Faculty Presentations.