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Report: Unpaid Hospital Bills Drop by Nearly Half Since Medicaid Expansion

Expanding Medicaid has helped the financial health of Michigan's hospitals. (MetalliX/morguefile)
Expanding Medicaid has helped the financial health of Michigan's hospitals. (MetalliX/morguefile)
February 13, 2017

ANN ARBOR, Mich. – The Healthy Michigan Plan is living up to its name when it comes to the financial well-being of the state's hospitals, according to a new study from the University of Michigan's Ross School of Business.

The report found that uncompensated care, which includes both charity care given to uninsured patients without the means to pay, and bad debt from insured patients who can't pay their high deductibles, has dropped by nearly 50 percent since the Medicaid expansion in 2014.

Study co-author Tom Buchmueller says the change is particularly noteworthy given that many insurers have raised deductibles.

"That change in the insurance market is pushing in the direction of more uncompensated care, which makes the impact of the Healthy Michigan Plan all the more impressive," Buchmueller points out.

In 2013, the 88 hospitals in the study spent more than 5 percent of their budget on uncompensated care, absorbing $627 million in costs, but by 2015 the amount was down to $327 million, according to the report.

Buchmueller says both hospitals and households across the state stand to lose ground if the covered expansions are rolled back, adding that right now, both are reaping the benefits of an improved bottom line.

"You take away the stress of knowing that you're one medical event away from financial catastrophe and that gives you peace of mind, and there's a tangible mental health benefit there," he states.

About 646,000 low-income residents participate in the Healthy Michigan Plan, which is supported by state and federal funds under the Affordable Care Act.

Reach Buchmueller via Kara Gavin at 734-764-2220. Report is at

Mona Shand, Public News Service - MI