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Possible upside of not-for-profit hospitals’ Medicaid losses

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Melanie Evans reports in Modern Healthcare that “{m]ost hospitals lose money on every Medicaid patient they treat, and those losses are mounting as millions of Americans gain coverage through state programs that provide insurance to no- and low-income residents.”

“But for not-for-profit hospitals, at least, those losses may have one positive side effect.

“Larger Medicaid losses will inflate what is already the biggest reported benefit to communities that hospitals must show to maintain their tax-exempt status. One estimate pegged hospitals’ total tax breaks at $24.6 billion in 2011.”

She notes that ”with charity care declining, Medicaid losses are growing as a share of not-for-profit hospitals’ total community benefit. It’s unclear if this will increase scrutiny of their tax exemptions.”


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