When patients are uninsured or underinsured, or unable to pay out of pocket for health care services, hospitals and other providers may incur the costs of the uncompensated care. Providers may shift these costs to other consumers. So, for example, insured patients may see their costs go up in the form of premium increases. Federal, states and local governments also allocate significant resources to offset these costs.
When more people have health coverage, the amount of uncompensated care declines. States that have expanded their Medicaid programs are seeing declines in their uninsured rates and are also documenting significant reductions in uncompensated care. According to the HHS Assistant Secretary of Planning and Evaluation, hospitals provided over $50 billion in uncompensated care in 2013; in 2014, there was a $7.4 billion reduction in uncompensated care costs, with 68 percent of the reduction coming from states that are expanding Medicaid. And of the 11 states with the greatest reductions in uninsured rates in 2015, 10 had expanded Medicaid eligibility.
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