Obamacare Reduced the Need for Charity Care (and the justification for tax exempt healthcare?)

Two recent articles in California Healthcare literature, this one and this one, conclude that the amount spent on charity care by hospitals of all sorts (government, for profit, and non-profit) declined after the passage of the Affordable Care Act — Obamacare.  The magazine, California Healthline, states:

The biggest decline in charity care spending occurred from 2013 to 2015, when it dropped from just over 2% to just under 1%. The spending has continued to decline, though less dramatically, since then.  The decline was true of for-profit hospitals, so-called nonprofit hospitals and those designated as city, county, district or state hospitals.  Health experts attribute the drop in charity care spending largely to the implementation of the federal Affordable Care Act, popularly known as Obamacare. The law expanded insurance coverage to millions of Californians, starting in 2014, and hospitals are now treating far fewer uninsured patients who cannot pay for the care they receive.  With fewer uninsured patients, fewer patients seek financial assistance through the charity care programs, according to the California Hospital Association.

A slightly older (2017) study by the Kellogg School of Management found that the trend was true across the country and that nonprofit and government hospitals benefited the most from the decrease in the number of uninsured patients.  Kinda makes you wonder whether tax exemption for hospitals is still justifiable as the nation moves closer to universal health care (even if that progress has been stalled under the current administration).  Sooner or later, it seems to me, there has to be a reckoning between tax exempt hospitals and the inevitable trend towards health care as a right rather than a privilege.

Darryll K. Jones