Wonky Word Wednesdays: Uncompensated Care

Jan 14, 2015

We are back! After the Holidays (and a nasty cold last week) Wonky Word Wednesdays is back in action. For the past three years, MBPC has made Medicaid expansion one of our top priorities. We know that Medicaid expansion is critical for the up to 70,000 Montanans, the majority of whom are caught in the coverage gap and are without access to affordable health care coverage. We also know that Medicaid Expansion is good for Montana’s economy. Did you know that Montana looses $1.96 million dollars every day in federal funding without Medicaid expansion? These funds will help bring 12,000 good paying jobs into our state. Another important reason to expand Medicaid is to help health care providers across the state. Each year, Montana’s health care providers – including doctors, nurse practitioners, and hospitals – treat thousands of low-income people who can’t pay for their care because they can’t afford health insurance. This is why we picked uncompensated care as our Wonky Word this week, because it costs providers, as well as the state and local communities, millions upon millions of dollars. When a patient or insurer does not pay for medical services it is known as uncompensated care. There are two types of uncompensated care: charity care and bad debt. Both charity care and bad debt typically occur when the patient is indigent or does not have insurance. Charity care is defined as services that the hospital offers without expectation of reimbursement, because the hospital has determined, in consultation with the patient, that the patient is unable to pay. Bad debt occurs when the hospital provides care but does not receive payment because the patient is unwilling or unable to pay their bill and has not applied for charity care. Just so you know, it is not just big hospitals that face uncompensated care costs; smaller, rural hospitals are feeling the pinch too, as are Indian Health Services and the State of Montana. In 2013, Montana hospitals alone incurred nearly $400 million in uncompensated charges! Can you believe that? These costs impact us all because providers somehow must absorb theses costs. This decreases the quality of services they are able to give or can result in higher health care costs for everyone with insurance. Want more facts? Hospitals in states that expanded Medicaid experienced significant drops in the number of uninsured patients. These reductions were between 48 and 72 percent. In addition, nationwide, Medicaid expansion reduced uncompensated care for hospitals in 2014 by $4.2 billion. MBPC recently released a full report on uncompensated care – calling it A Drag on Montana’s Economy. Its only 4 pages long, and it does a great job of explaining why uncompensated care hurts Montana. Uncompensated care results in high costs for Montana hospitals, state and local governments, and our communities as a whole, but expansion will help reduce the burden of uncompensated care across the state. The 2015 Legislative Session kicked off last week, and we are following it closely. We will keep you updated with everything pertaining with Medicaid expansion, Pre-Kindergarten, the state budget, and the many bills dealing with responsible tax policy in Montana and tell you how you can get involved. Follow us on Twitter, Facebook, and our blog to stay connected to all that is happening.
Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.