Study looks at impact of Medicaid expansion on hospital finances

States’ decisions to expand Medicaid may have important implications for their hospitals’ financial ability to weather the COVID-19 pandemic, according to a study published yesterday in Health Affairs.

The study found that the early positive financial impact of the Affordable Care Act’s Medicaid expansion was sustained in fiscal years 2016 and 2017 as hospitals in expansion states continued to experience decreased uncompensated care costs and increased Medicaid revenue and financial margins.

“As COVID-19 has brought hospitals to a time of great need, findings from this study provide important information on what hospitals in states that have yet to expand Medicaid could gain through expansion and what is at risk should any reversal of Medicaid expansions occur,” the authors said.