June 21—Arizona’s recent Medicaid expansion is a significant credit positive for Arizona hospitals according to an article in this week’s Moody’s US Public Finance Weekly Credit Outlook.

According to the article, the state’s Medicaid expansion is notable because the legislation restores Medicaid eligibility to approximately 300,000 residents who were removed from the Medicaid rolls following state budget cuts in 2011. As a result of these cuts, the payer mix at many Arizona hospitals worsened as people who lost Medicaid eligibility shifted to self-pay, which hospitals often had to write off as charity care or bad debt.

As a result of the Medicaid expansion, Moody’s expects that the number of self-pay patients coming in to Arizona hospitals will drop significantly over the next year, and the payer mix for most hospitals will return to fiscal 2011 levels.

Publication Date: Friday, June 21, 2013