Medicaid Expansion Reduced Uncompensated Care Costs at Louisiana Hospitals: May be a Model for Other States

We examined changes in hospital uncompensated care costs in the context of Louisiana’s Medicaid expansion. Louisiana remains the only state in the Deep South to have expanded Medicaid under the Affordable Care Act and can serve as a model for states that have not adopted expansion, many of which are located in the South census region. We found that Medicaid expansion was associated with a 33 percent reduction in the share of total operating expenses attributable to uncompensated care costs for general medical and surgical hospitals in Louisiana in the first three years after expansion. Reductions varied by hospital type, with larger effects found for rural and public hospitals versus urban and for-profit or private nonprofit hospitals. As hospital operating expenses consistently increased during the sample period, our results imply that hospitals in Louisiana are treating fewer patients for whom no reimbursement was provided since the state expanded Medicaid.