Recent Studies Show That Medicaid Expansion Has Improved the Financial Performance of Hospitals and Other Providers, In Line With Prior Research
A KFF synthesis of recent studies finds that Medicaid expansion has been beneficial to the finances of hospitals and providers, driving decreases in the share of uninsured patients, increases in Medicaid-covered patients and declines in uncompensated care.
By financing coverage for low-income people who are likely to otherwise be uninsured, Medicaid expansion provides potential economic benefits to the health care providers who provide care to that population. Studies suggest that hospitals experienced higher reimbursements and decreased uncompensated care costs. Studies also find that other providers, including federally qualified health centers and community health centers, experienced increased revenue following expansion.
Some studies find that these economic effects vary by provider type. For example, a few studies find that despite declines in uncompensated care costs, improvements in financial performance were stronger for (or only observed among) rural and small hospitals. A small number of studies suggest that improvements in payer mix and uncompensated care costs at hospitals may have been partially offset by increases in unreimbursed Medicaid care and declines in commercial revenue.
The new KFF analysis, the latest installment in our ongoing effort to document what the research shows about the effects of Medicaid expansion, summarizes 24 studies published between April 2021 and December 2022 on the economic impact of Medicaid expansion on providers. Recent study findings are consistent with previous research in this area.
The findings are particularly relevant given the fiscal stress experienced by Medicaid providers during the coronavirus pandemic, including recent challenges for hospitals as federal relief funds expire. The research also provides context for ongoing policy debates about whether to expand Medicaid in states that have not done so already. State costs also remain a key issue in expansion debates.
Thirty-nine states plus Washington D.C. have adopted Medicaid expansion under the ACA, with the federal government covering 90 percent of the cost and states 10 percent, while 11 states have not.
Prior KFF reports published in 2020 and 2021 reviewed more than 600 studies and concluded that expansion is linked to gains in coverage, improvement in access and health, and economic benefits for states and providers.