Speed Reads

Unintended consequences

Hospitals have made more money, spent less on charity care under ObamaCare

Supporters of the Affordable Care Act have often cast it as a blow against greedy companies in the health-care industry that are more concerned with their bottom line than Americans' wellbeing. It's a narrative significantly complicated by health insurance companies' experience of a "profit spiral" of rising income since ObamaCare went into effect and, now, a new Politico report which finds nonprofit hospitals have made more money and spent less on charity care, defined as "free treatment for low-income patients," since 2013.

The upshot, as Politico summarizes, is the "top seven hospitals' combined revenue went up by $4.5 billion per year after the ACA's coverage expansions kicked in, a 15 percent jump in two years. Meanwhile, their charity care — already less than 2 percent of revenue — fell by almost $150 million per year, a 35 percent plunge over the same period."

This happened, Politico reasons, because the ACA produced about 20 million new paying customers for hospitals nationwide while maintaining a system of tax exemptions, established for half a century, in which the hospitals pay lower taxes on the condition that they can demonstrate service to their communities, usually through the charity care. So post-ObamaCare, many not-for-profit hospitals have higher incomes, significantly in the form of tax dollars via the Medicaid expansion's shifting patients out of the charity care programs, but receive the same tax benefits as they did pre-ObamaCare.

Read the full Politico report here.