One of the many rationales offered for the Affordable Care Act was that the previous system kept too many Americans uninsured for too long, resulting in part in higher utilization of hospital emergency departments as a substitute for better, lower-cost medical care. By reducing over-utilization of EDs by the uninsured, reformers hoped not only to reduce overall cost but also to save some EDs from closure, since less of their overall caseloads would be made up of uninsured patients who would either pay just part of their bill or none at all.
As with many of the predictions ACA advocates made in 2009-10, this one doesn’t seem to have come to pass. According to a new study published in the American Journal of Emergency Medicine, states that expanded Medicaid under Obamacare have actually experienced increases in ED closures, not decreases. It was always a fantasy to believe that giving the people “free” Medicaid would result in lower utilization rates and less expense to hospitals over time. When people move from having no health plan to having Medicaid, they tend to go to the hospital more often, not less often. For one thing, they are more confident that they won’t have to pay out of pocket for the services they receive. Plus, many docs don’t take Medicaid. So patients end up at EDs, anyway — running up bills that Medicaid reimbursements don’t come close to paying off. Finally, some newly enrolled Medicaid patients previously had private health plans, which reimburse at higher rates. That’s the often-mentioned crowd-out effect.
In short, another blown prediction. But to paraphrase America’s latest dynast, “At this point, what difference does it make?”
Obamacare's "Free" Healthcare Promises & Problems
