The affordable care act and the cost of uncompensated care

From 2011 to 2013, the total uncompensated costs of charity care and bad debt for U.S. hospitals amounted to $37.2 billion each year, resulting in a net loss of $24.6 billion dollars each year. The Affordable Care Act (ACA), signed into law in 2010, would presumably lead to reductions in uncompensated costs by expanding health insurance coverage in the U.S. Increasing the number of Americans with insurance would consequently decrease the number of those unable to cover their medical expenses. Two mechanisms were included in the ACA to help achieve the expansion of health insurance coverage: the individual mandate to purchase insurance, and the expansion of Medicaid. Six states expanded Medicaid around 2010, while several others followed in 2014. This study confirms that early Medicaid expansion reduces hospital uncompensated costs considerably. In addition, the Capstone team estimated that a one percentage point increase in the insured population reduces uncompensated costs as a percentage of hospital operating expenses by 0.3 percentage points.