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In These States, Hospitals and Patients Could Be in for a Rough Ride
Posted By Tamara Lytle On September 16, 2013 @ 4:21 pm In Washington Watch | Comments Disabled
Hospitals and health-care systems in the 21 states that aren’t expanding Medicaid, the health program for low-income Americans, may be in for an especially rough financial ride.
With hospitals in those states facing the prospect of providing even more uncompensated care, Bloomberg.com says, the municipal bonds they put up for sale may very well have diminished appeal.
As Bloomberg’s Brian Chappatta explains:
“Health-care related bonds are already posting the biggest losses among revenue debt in the $3.7 trillion municipal market, losing about 6 percent over the past three months, Standard & Poor’s data show. In states that have rebuffed extending Medicaid, securities of hospital systems have less appeal, said Todd Sisson, a senior analyst at Wells Capital Management in Charlotte, N.C.
“‘We’re going to see spread widening on hospitals in states that are not expanding versus states that are expanding,’ said Sisson, whose company oversees about $31 billion in munis. ‘States that aren’t expanding Medicaid are still going to have a high percentage of the uninsured. The hospitals are going to lose a lot of money.’”
Under the the health care law, states can expand their Medicaid programs so as to cover families earning up to 133 percent of the poverty level (about $30,657 for a family of four).
To offset the cost of insuring more people under Medicaid, which is financed jointly by states and the federal government, the Affordable Care Act reduces funding for a program that helps health systems that treat low-income patients. George Huang, a senior analyst at Wells Fargo Securities, told Bloomberg that, as a result, “hospitals are going to be whacked with reimbursement cuts.”
What’s more, uninsured patients in states that haven’t expanded Medicaid are likely to see higher bills as hospitals pass along their higher borrowing costs, according to National Commission on Health Care President and CEO John Rother, who spoke with AARP.
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