Uncompensated care accounts for charity care and bad debt. Hospitals generally provide charity care (free or discounted care) to patients living below 150-200% of the Federal Poverty Level (FPL). Meanwhile, bad debt accumulates from patients who fail to pay their medical bills – whether they are uninsured or have private coverage.
According to the Goldwater Institute, the answer is ‘No’. Charity care represents an iota of total uncompensated care costs. Rather, the ultimate driver of skyrocketing uncompensated care comes from bad debt:
Bad debt will be unaffected by Medicaid expansion because the people in this category will still not be eligible for Medicaid coverage because they will be above the income limit. Furthermore, hospitals report bad debt at their “charge rates” rather than their actual cost…making their uncompensated care costs appear much higher than they actually are.
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