Hospital M&A Keeps Pace with Medicaid Expansion

Hospitals in states that expanded Medicaid coverage under the Affordable Care Act typically are healthier, financially, than those in states that have not expanded that coverage. What about hospital mergers and acquisitions in the expanded states, compared with those that haven’t expanded Medicaid?

With only two years of data, it’s too soon to spot a trend, on the surface. Effective in April 2010, the ACA provided states the option to receive federal Medicaid matching funds to cover adults with incomes up to 133% of the Federal Poverty Level to get an early start on the 2014 Medicaid expansion. When the first open enrollment period ended in March 2014, 25 states had expanded their programs either through the ACA option or through a Section 1115 waiver, two more–Michigan and New Hampshire–were ready to join on April 1 and July 1, 2014, respectively.

In 2015, 32 states had implemented Medicaid expansion, and three more–South Dakota, Virginia and Wyoming–are discussing the possibility of joining. Here is a topline look at our data on hospital M&A by expansion states versus non-expansion states. We’ll have more detail in The Health Care Services Acquisition Report, 2016, to be published next month. Reserve your copy today!

Hospital M&A by Medicaid Expansion, 2015 and 2014