CHA News Article

Report Examines Medicaid Payments at Risk for Hospitals Under Public Charge Proposed Rule

Today, Manatt, Phelps & Phillips, LLP released an analysis that estimates the overall Medicaid and Children’s Health Insurance Program (CHIP) funds and hospital payments at risk if the Department of Homeland Security’s (DHS) public charge proposed rule is finalized. 

Because the proposed rule does not alter eligibility for Medicaid and CHIP, it is not possible to know exactly how many people would forgo coverage in response to concern about the immigration consequences of using Medicaid. As such, the analysis estimates overall Medicaid and CHIP enrollment, funding and hospital payments could be affected if the rule is finalized. Key findings include: 

  • Nationally, the potentially affected Medicaid and CHIP population is estimated at 13.2 million as of 2016. This includes 4.4 million noncitizen adults and children who receive Medicaid or CHIP coverage, as well as 8.8 million citizen adults and children with Medicaid or CHIP coverage who are the family members of a noncitizen. This does not count all legal immigrants and family members who are eligible for Medicaid or CHIP, but only those who actually receive coverage. 
  • These enrollees accounted for an estimated $68 billion in Medicaid and CHIP health-care services in 2016, including enrollees who are noncitizens ($26 billion) and those who are citizen family members of a noncitizen ($42 billion). Among the Medicaid and CHIP spending at risk, more than one-third is attributable to children, and the children’s share is largest among the citizen family members of a noncitizen.
  • Of all states, California has the largest percentage of Medicaid and CHIP spending at risk (26 percent). In California, these enrollees accounted for nearly $22 billion in Medicaid and CHIP health care services in 2016, including enrollees who are noncitizen ($9 billion) and those who are citizen family members of a noncitizen ($13 billion).  
  • Because hospitals provide a substantial share of the care delivered to Medicaid and CHIP enrollees, their payments at risk under the public charge proposed rule total an estimated $17 billion in 2016 ($7 billion for noncitizen enrollees and $10 billion for citizen enrollees who have a noncitizen family member).  
  • In California, the estimated payments at risk are more than $5 billion in 2016 ($2.2 billion for noncitizen enrollees and $2.9 billion for citizen enrollees who have a noncitizen family member). In the Los Angeles area alone, payments at risk total nearly $2 billion, with other area impacts as follows: 
    • Riverside – San Bernardino – Ontario: $572 million 
    • San Francisco –Oakland – Hayward: $506 million 
    • San Diego –Carlsbad: $387 million 
    • San Jose – Sunnyvale – Santa Clara: $365 million
    • Fresno: $214 million 
    • Sacramento – Roseville–Arden- Arcade: $198 million 
    • Yuba City: $115 million 

The analysis notes that the health care needs of the individuals and families who drop coverage or forgo enrollment as a result of this immigration rule would not disappear. While they are likely to forgo preventive and routine care, some people would still turn to hospitals for services — particularly for expensive acute care and inpatient procedures, as people defer or delay care due to lack of insurance coverage — thereby increasing uncompensated care costs. 

The analysis also notes that, overall, the public charge proposed rule would have a significant negative impact on hospitals and the communities that rely upon them, particularly in areas with large immigrant populations. As uncompensated care costs rise, the destabilizing impact of the rule could threaten the investments hospitals make in serving their communities.

CHA is currently reviewing the proposed rule in collaboration with its state and national association colleagues and will submit comments requesting that DHS withdraw the proposed rule. Comments on the proposed rule are due Dec. 10. CHA will make its comment letter available to members via CHA News in advance of the comment deadline. 

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