July 31—For-profit healthcare systems have reported that growing Medicaid enrollment boosted their bottom lines in both states that have expanded eligibility under healthcare reform and those that have not adopted the expansion.

Similar to first-quarter reports on the financial effects of the Affordable Care Act (ACA), several for-profit systems recently reported in second-quarter earnings calls that their revenues were boosted by an increase in Medicaid patients and a decrease in self-pay patients. However, some of the systems reported that Medicaid coverage boosts also bolstered their bottom lines in nonexpanding states.

For instance, officials at HCA Holdings Inc., the largest for-profit chain, said the health system treated more patients in Texas who were enrolled in Medicaid and fewer uninsured. Texas is one of 24 states that have not approved an expansion of eligibility under the ACA to all residents with incomes of up to 138 percent of the federal poverty level.

Same-facility Medicaid admissions and equivalent admissions increased 7.8 percent and 8.8 percent, respectively, throughout the HCA system compared with increases of 1.4 percent and 2.4 percent in the first quarter of the year.

“This was driven by continued growth in our four Medicaid expansion states, as well as growth in a number of our non-expansion states as well,” William B. Rutherford, CFO, principal accounting officer, and executive vice president for HCA, said in a July 29 earnings call.

Similarly, Universal Health Services officials also noted coverage expansions among the patient populations of its Texas hospitals.  

Expansion Varied  

The Obama administration reported that at least 6.7 million more people were enrolled in Medicaid programs in May (the most recent month for which figures are available) than before the full Medicaid expansion, representing an increase of 11.4 percent. Overall, Medicaid programs grew by 17 percent in expanding states and 3 percent in non-expanding states.
Overall, HCA had a 32 percent increase in Medicaid admissions and a 48 percent decline in uninsured admissions this year in its four expansion states. But it also had a 2 percent drop in uninsured admissions in non-expanding states.

More than 550,000 Medicaid enrollees gained coverage in non-expansion states in the first quarter, healthcare consultancy Avalere Health found in an analysis. Seventeen  states that did not expand Medicaid in the first three months of 2014 increased their Medicaid rolls, some by up to 10 percent. The increasing enrollments in non-expanding states likely are driven by attention surrounding the law that leads those who already were eligible to sign up for the program, according to health policy experts.

The reports of benefits for some hospitals in non-expansion states followed warnings from many healthcare analysts that the lack of expansion would hurt hospitals financially as ACA-mandated payment cuts go into effect.

Publication Date: Thursday, July 31, 2014