Texas Hospitals Face a Rising Tide of Unpaid Bills

Texas Hospitals Face a Rising Tide of Unpaid Bills
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Texas has seen a steady rise in yearly unpaid hospital charges, mostly accrued by uninsured patients, according to new data released by the state health commission. While the report only includes data up to 2014, when the bulk of Affordable Care Act regulations went into place, this costly pattern is expected to continue — partially due to Texas' disinterest in Medicaid expansion under the ACA. And taxpayers may continue to foot the bill.

According to the report, which was requested by the Texas Legislature in 2015, annual uncompensated hospital costs increased by more than $1 billion dollars between 2010 and 2014. Most of these costs came from the large number of uninsured patients streaming through the state's public and private hospital system — patients that hospitals are required by state law to care for. With 19 percent of the population living without insurance (making Texas the most uninsured state in the US), the charges add up quickly.

At the same time, funding to offset this growing number, which comes largely from state tax dollars and the federal government, has continued to fall short. In 2014, this funding only covered 58 percent of uncompensated costs — leaving some $3 billion left for hospitals to account for.

The ACA, however, promised to reduce the number of uninsured Americans, meaning this rising tide of hospital costs would have, ideally, abated by now. But since Texas conservative lawmakers decided against Medicaid expansion in 2014, leaving a "coverage gap" of more than 1 million Texans qualified for care in its wake, it's hard to expect much to change.

A recent study estimating Texas' unpaid hospital costs under the ACA predicted an even darker outcome: that state hospitals should expect $8.2 billion annually in unpaid hospital care costs, even if Texas decided to expand its Medicaid program.

"Texas’s uncompensated care burden is almost certain to grow," wrote the researchers commissioned by the Centers for Medicare and Medicaid Services. "While the implementation of a Medicaid expansion would blunt the impact to a certain degree, it would not come close to eliminating the
uncompensated care burden in the state."

At the moment, Texas hospitals are clinging to the Obama Administration's 1115 waiver, a program meant to cover the initial uncompensated hospital costs under ACA. But it's been extended far beyond its original purpose — to ease states into transitioning uninsured patients into Medicaid. Since Texas' leaders repeatedly rejected to expand Medicaid, health officials must repeatedly ask the feds for an extended safety net.

In a move to avoid an "inefficient" program, it seems Texas' sidestepping of Medicaid expansion has pushed the burden onto the laps of state taxpayers (who covered $1.5 billion in unpaid hospital costs in 2014) and the feds.
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