Winston Salem Times

The Foundation for Government Accountability (FGA) released a report in February that suggests the expansion of Medicaid programs would not create jobs and improve economic conditions for state hospitals.

The study found that Medicaid expansion did not improve the financial standing of struggling hospitals; that the expansion did not actually create jobs, in fact, states that did not expand their Medicaid coverage added jobs in hospitals more quickly than states that expanded their programs; and the number of enrollees coming from private insurance created a financial strain on hospitals as it exceeded expectations.

FGA cited six years’ worth of hospital financial data, which it analyzed, and more than 1,700 hospitals.

It noted that Medicaid reimbursement rates have not covered the full costs of care for enrollees, and that hospitals have faced payment shortfalls because of that.

Medicaid advocates have touted an increase of several thousand jobs with Medicaid expansion, but FGA found that 40% of the hospitals in the states where Medicaid programs expanded lost jobs in the first year of the expansion. In Arkansas, hospitals shed 732 jobs, while Iowa hospitals lost 1,000 jobs after a year of the expanded Medicaid program.

FGA reported that “over a period of nearly five years, non-expansion states enjoyed annual hospital job growth of 1.55% on average, compared to just 1.36% for Obamacare expansion states.”

Many Medicaid enrollees came from private insurance, adding pressure and causing economic distress for hospitals

The shift of patients moving from private insurance to Medicaid meant that hospitals saw reductions of their reimbursements – Medicaid reimburses 63% of the rate of private insurers, and that is below hospitals’ cost of care, according to the Civitas Institute.

Civitas suggested that instead of lobbying for greater governmental control over health care, undoing the restrictions that drive up prices and restrict competition is an avenue that should be explored.