Health and Science

Obamacare giveth, Obamacare taketh away from hospitals

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The Obamacare program of expanding Medicaid is helping hospitals' bottom line in many states—but looming cuts that are also related to the Affordable Care Act could be snatching some money right back, soon.

An NPR "Marketplace" story that aired Wednesday highlighted that situation—and noted that large urban hospitals that have traditionally served the poor with charity care could be facing a financial squeeze as those people gain coverage from Medicaid and possibly seek care elsewhere.

One such hospital, Our Lady of Lourdes in Camden, New Jersey, has realized $3.5 million in savings over the past year as its uninsured patient population has plummeted from 8.5 percent to just 3 percent.

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Many of those people who previously would have relied on charity care from Our Lady of Lordes now are covered by Medicaid, because New Jersey was one of 27 states to agree to expand eligibility for the government-run insurance program to nearly all poor adults.

The story cited a report by the Colorado Hospital Association that found that there had been a 30 percent increase in Medicaid charges, and a 30 percent drop in charity care costs for hospitals in 30 states—equivalent to billions of dollars worth of savings for providers.

But that "comes with a caveat," Ellen Kugler, the executive director of the National Association of Urban Hospitals said in the story.

Kugler noted that under the ACA, the federal government plans to reduce its contributions to hospitals for the charity care costs they incur.

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At the same time, "Marketplace" noted, there is a risk that these "safety net" hospitals that traditionally offered charity care could lose some of their newly insured patients to hospitals that have a better reputation for care.

Read the full story here: "Drop in uninsured is a mixed blessing for hospitals"

And listen to the full broadcast here.

By CNBC's Dan Mangan