One of the biggest provisions in the healthcare reform law affecting providers — the expansion of Medicaid — went into effect Jan. 1.
Under the Patient Protection and Affordable Care Act, states have the option of expanding their Medicaid programs to cover adults earning up to 138 percent of the federal poverty level. Originally, the law mandated the provision, but in June 2012, the Supreme Court ruled Medicaid expansion was optional.
Hospitals hailed the policy, as an expansion of health insurance to the nation’s poorest individuals meant less bad debt and a large stream of revenue to keep operations steady. However, the ability for states to opt in could disproportionately affect safety-net providers in states that decide to not expand. In October, Fitch Ratings issued a report noting that hospitals and health systems in states not expanding Medicaid are expected to lose out on more than $200 billion in additional revenue during the next decade.
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