ObamaCare proponents have long promised that expanding Medicaid to a new class of able-bodied adults would save struggling hospitals, create new hospital jobs, and improve hospitals’ overall financial health. The reality is that these false promises have never materialized.
Hospitals in expansion states have continued to struggle with closures, layoffs, financial losses, and even capacity shortages. As a result, expansion states have experienced the exact opposite of what they were promised by ObamaCare proponents. This is due in part to ObamaCare lobbyists only looking at one side of the ledger—how much new Medicaid revenues hospitals will receive—without looking at what hospitals’ offsetting Medicaid costs will be. The truth is that these Medicaid losses more than outweigh any savings from expansion.
On top of the existing overwhelming evidence suggesting that Medicaid expansion has not materially helped hospitals, never-before-released data reveals that hospitals in expansion states have experienced severe financial shortfalls—both in raw numbers and relative to their non-expansion counterparts. In addition to the documented closures, capacity shortages, and layoffs, this new information further underscores the harmful impact that Medicaid expansion can have on hospitals. And for later adopters of Medicaid expansion—including states contemplating expansion right now—the picture could be even worse.