Safety Net Hospitals Face Crippling Cuts without Medicaid Expansion

NE_Appleseed_Icons_Medicaid-128One of the cost-saving measures in the Affordable Care Act was the reduction in disproportionate share hospital (DSH) payments to the states. DSH payments are federal money that goes to hospitals serving a large (or disproportionate) number of uninsured or underinsured patients, to offset those costs.

The ACA was constructed so DSH payments wouldn’t be needed anymore because nearly everyone in the U.S. would be covered either through the private insurance market as a result of some of the new consumer protections, or as a result of the Medicaid expansion.

But, the U.S. Supreme Court ruled last summer the new Medicaid program is now optional for states, so many of these folks will remain uninsured, and hospitals will continue to provide them with care that goes uncompensated.

For hospitals that provide care to large numbers of poor and uninsured patients, the reduction in DSH payments combined with the continued need to care for the uninsured, means that they will be losing lots of money.

A recent New York Times article highlighted the problems that hospitals receiving DSH payment reductions will face without Medicaid expansion.  And, while Nebraska is a low-DSH payment state — meaning that our hospitals do not receive as much in DSH payments as states like Georgia do — safety net hospitals are still facing a financial crunch. Rural hospitals and providers, in particular, will be affected.

If the Nebraska Legislature votes to accept the new Medicaid program, it will bring more than $2 billion back to our state, helping to sustain our hospitals and provider networks so they can ensure that all Nebraskans have access to affordable, quality health care.

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