Report: Health care overhaul would reduce hospitals' costs

The federal health care overhaul will reduce the amount of money Minnesota hospitals pay each year to care for patients who can't afford their services, according to a new report from the Minnesota Department of Health.

In 2011, uncompensated care cost hospitals $308 million, and without the federal Affordable Care Act it would grow to about $319 million by 2016, said the report issued Wednesday by the health department's Health Economics Program.

Under the Affordable Care Act, which would include a health insurance exchange and an expanded basic health plan for lower income individuals, the state's hospitals would save between $134 million and $168 million on uncompensated care, the report said. However, if the state decides not to expand Medicaid in order to cover people with incomes 138 percent above federal poverty guidelines, hospitals would save less on uncompensated care, the report said.

The health department says charity care — care for low-income patients who receive free or discounted services — accounts for about half of uncompensated care. The other half is made up by patient debt. The report said 44 percent of uncompensated care is provided on behalf of insured patients whose coverage requires them to pay a large portion of the cost for health care services.

A copy of the report is posted here.