Medical bill People are stillhitting the emergency room instead of seeing a doctor regularly,raising their own out-of-pocket costs as well as hospitals'financial exposure.

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Hospitals' costs for uncompensated care and unreimbursedexpenses are still increasing, although the pace of that increasehas slowed a bit since 2016.

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According to a Definitive Healthcare analysis of 3,855hospitals. the grand total for uncompensated care and reimbursementshortfalls—including free and discounted care for low-incomepatients, unpaid bills and unreimbursed costs from Medicaid andChildren's Health Insurance Programs—came to agrand total of $12.8 million in 2018. That's up from $11.2 millionin 2015.

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From 2015 to 2016, the rate of growth in uncompensated care rose8 percent, although after that it slowed down to approximately 3percent annually.

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Related: Medicaid expansion takes a bite out of medicaldebt

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A lot of the blame for that can be laid at the feet of high-deductible health plans and coinsurance,according to Kevin Holloran, senior director with Fitch Ratings.Holloran says, "Hospital CFOs I talk with say a $5,000health plan is $5,000 in bad debt—most don't have the capacity topay that back."

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While the Affordable Care Act's individual mandate coming intoeffect in 2014 led to a rise in the number of insureds—in 2015 itwas 90.9 percent, while in 2016 and 2017 it hit 92.1 percent,according to census figures—it started trending down again in 2018to 91.5 percent, which could be owed to a range of reasons: therepeal of financial penalties tied to the individual mandate, adecline in Medicaid coverage and cuts in theACA marketing budget by the CMS while it pushes association healthplans.

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And lots of people are still hitting the emergency room as theirfallback, raising their own out-of-pocket costs as well ashospitals' financial exposure.

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According to the Kaiser Family Foundation, the averagedeductible of $1,655 in 2019 has tripled over the last 10 years,and Moody's Investors Services warns that the level of bad debtcarried by hospitals will probably continue to increase.

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Holloran said in the report that if DHS cuts of $4 billion tohospitals' Medicaid disproportionate-share hospital paymentsactually take place, hospitals will be on the hook for yet moreunpaid bills and take a hit in profitability, since DSH funds coverabout 51 percent of their uncompensated-care costs.

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Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.