Uncompensated Care Subsidies: Where Does the Money Go?
Federal payments to states to cover the cost of uncompensated care for uninsured or low-income populations through the Medicaid Disproportionate Share Hospital (DSH) program will be phased out.
Given their primary purpose, the distribution of federal Medicaid DSH payments should closely mirror the rate of uninsured in each state. This is not the case. In 2005, Florida received $52 in Medicaid DSH payments per uninsured person, whereas New Hampshire received $1,214 per uninsured person, according to data on DSH allotments from the Kaiser Family Foundation and data on uninsured rates from the United States Census Bureau.
Full article on uncompensated care costs at the Health Affairs Blog.
This is going to be very bad news for all the safety net institutions.
Twenty-three million people (probably many more) will lack coverage in 2019. Reducing DHS payments because everyone is supposed to have health coverage may sound like a smart idea. But I expect that many of the safety net hospitals that depend on DHS payments to stay afloat will find they aren’t attracting the fully insured patients but are still attracting the uninsured ones.
It has not been good for Massachusetts hospitals, where basically the same thin has happened.
Beyond anyone’s memory, government has always distributed subsidies to supporters and important constituencies. They used to have the honesty to call it patronage. Now they hide it behind formulas and schemes that are meant to appear fair, but are far from equitable.
It sounds like places like Parkland Hospital in Dallas will be required to continue to give care to the uninsured, but have no federal funds to do it with.