Filed Under:Health Insurance, Individual Health

Hospitals could lose $500M in federal funds

MIAMI (AP) — Hospitals nationwide could lose half a billion dollars in federal funding for uninsured patients next year under the national health overhaul — a loss that will hit especially hard in states that decided against expanding Medicaid coverage. Cuts could jump to $4 billion in 2020, according to estimates released Monday by federal health officials.

Hospitals that treat a large number of uninsured residents have relied on federal funding in the past to offset the cost. But the Patient Protection and Affordable Care Act (PPACA) assumes that more residents will have Medicaid or private health insurance, meaning hospitals would see fewer uninsured patients and need less assistance.

The formula determining cuts in each state is complicated, but generally states that have a smaller number of uninsured patients will receive larger reductions than states with high numbers of uninsured patients. States have broad discretion to distribute the payments to hospitals and the allotments also vary greatly among states, so part of PPACA "reforms federal payments to states to help pay for uncompensated care for uninsured and low income populations," federal officials said in a statement.

They also noted Monday that some states are still trying to decide whether to expand Medicaid, which will impact the formulas used to decide how much money to cut from each state. Because of that, federal health officials only proposed formulas for cuts for the next two years.

Copyright 2016 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Nichole Morford

Nichole Morford
Managing Editor

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