May 9—The numbers of uninsured treated by for-profit health systems has dropped and admissions have increased as the first large insurance coverage expansions began this year under healthcare reform, company executives said.

Larry Cash, CFO of Community Health Systems, said in a recent investors call that it has seen a decrease in self-pay admissions since the beginning of the year, when private insurance and Medicaid coverage expansions under the Affordable Care Act (ACA) went into effect. Cash projected that the organization’s share of self-pay admissions will drop from 8 percent to 4 percent over a three-year period.

Similarly, Bill Carpenter, CEO of LifePoint Hospitals, said in a recent investor call that in the seven states that have both LifePoint hospitals and expanded Medicaid eligibility, as encouraged by the ACA, the share of Medicaid patients increased and numbers of self-pay patients decreased.

Cash said his system estimated at least a $10 million benefit from both the Medicaid expansion and the so-called woodwork effect, in which people eligible for Medicaid before the ACA expansion but who never enrolled finally signed up.

The Obama administration said 4.8 million more people have enrolled in Medicaid since October 2013 than signed up a year earlier, although officials acknowledged those numbers include reenrollments and woodwork enrollees.

Hospitals have led the push for ACA Medicaid eligibility expansion for all residents with incomes of up to 138 percent of the federal poverty level, which 26 states have undertaken.

In the earnings call, LifePoint executives estimated 80 percent of self-pay patients in states that have expanded Medicaid eligibility would qualify for coverage under the public insurance program, and about 80 percent of that eligible population enrolled.

Additionally, LifePoint reported 15 percent of its eligible patient population enrolled in a private health insurance plan offered through an ACA marketplace, which also helped reduce the number of uninsured patients.

Marketplace Impacts

In the four Medicaid expansion states where HCA has hospitals, the health system has seen Medicaid admission growth and a 29 percent decline in uninsured admissions. That compared with a 5.9 percent increase in uninsured admissions in HCA hospitals in non-expansion states.

Expansion of coverage to the uninsured through healthcare reform to-date is expected to cut hospital bad debt by 13 to 18 percent, according to a recent report by Bank of America Merrill Lynch.

Hospital officials said they expected a clearer picture of ACA impacts on patient volumes to emerge in the second half of the year.

Publication Date: Friday, May 09, 2014