Illegal Immigration May Increase Bad Debt under Healthcare Reform

Upcoming cuts in federal funding prescribed under healthcare reform will  increase bad debt at hospitals that are frequented by illegal immigrants, the New York Times reports.

Under the Patient Protection and Affordable Care Act, reimbursement to hospitals with higher-than-average indigent populations will be cut in half by 2019. The rationale behind the reduction is that healthcare reform will cover a higher percentage of the poor and uninsured, ostensibly reducing the need for the subsidy.

The Times reports that the cuts will dramatically affect the finances of hospitals that serve a higher proportion of illegal immigrants, who are specifically excluded from the benefits of healthcare reform. Illegal residents of the United States are prohibited from participating in state health insurance exchanges and are not covered when Medicaid is expanded to everyone who falls below 133 percent of federal poverty guidelines.

Illegal immigrants who are uninsured or under-insured currently seek medical treatment in emergency rooms, which by law must accept all patients without regard to whether they can or cannot pay for services. Some hospitals have been able to receive reimbursement for providing medical services to the uninsured, but beginning in 2014 will see those reimbursements begin to be reduced.