By JIM SMITH

We are all now aware the Supreme Court recently upheld a key part of the Affordable Care Act that provides health insurance subsidies to all qualifying Americans. The Affordable Care Act has resulted in the expansion of private health insurance through state and federal insurance exchanges and has expanded the Medicaid program. According to a recent study by the Kaiser Family Foundation, the ACA is having a major impact on the nation’s hospitals. The upsurge in the number of people with health insurance will increase overall demand for healthcare at hospitals. It will raise revenues from previously uninsured patients and reduce the amount of uncompensated care that hospitals are required to provide. Simultaneously, the ACA will reduce Disproportionate Share Hospital (DSH) Payments to hospitals that serve a large number of Medicaid and uninsured persons, such as the former Vidant Belhaven facility. The impact on specific hospitals will depend upon many factors but the crucial factor will be whether or not the hospital is located in a state that expanded Medicaid. As of April 2015, 21 states, including North Carolina, had chosen not to expand Medicaid through the ACA. Nonetheless, as a consequence of all aspects of the ACA, the number of uninsured decreased by 36 percent in states that expanded Medicaid compared to 24 percent in states that did not expand Medicaid.

The number of Medicaid hospital patients continued to increase in the second quarter of 2015, but at a slower rate than 2014. Medicaid patient numbers for hospitals in non-expansion states showed a smaller increase and self-pay volumes decreased. Charity care costs did not decrease as much among hospitals in non-expansion states as they did among hospitals in expansion states. Hospitals in states that did expand Medicaid experienced a net decrease in low-income patient costs. These hospitals benefitted from increased overall patient revenue from Medicaid, offsetting lower Medicaid payment rates, and from reduced charity care costs. Together these led to an overall decrease in the cost of care to the poor. The increase in Medicaid shortfalls among hospitals in states that did not expand Medicaid resulted in a net increase in the costs of caring for low-income patients. Hospitals in non-expansion states compensated for these higher costs by increasing charges to other patients, especially privately insured and Medicare patients. Medicaid expansion can offset the cost of care to the poor and serve as a growing source of hospital revenue. The data strongly suggests the North Carolina Legislature should agree to accept expanded Medicaid now and not wait until later.

Jim Smith is the first vice chairman of the Beaufort County Democratic Party.