Hospitals in states that expanded Medicaid enrollment are reporting a huge decrease in hospital stays by uninsured individuals. At the same time, stays by Medicaid patients are up.

A research team from the University of Michigan identified these trends by studying statistics in a recently created database maintained by the Agency for Healthcare Research and Quality. The researchers studied data for 15 states, a group that included some that had expanded Medicaid and others that had not.

Hospital stays by those without Medicaid plummeted by 50 percent in expansion states between the end of 2013 and the middle of 2014. During the same period, stays by those with Medicaid rose by 20 percent.

“The fast, sharp effect suggests one of the key parts of the Affordable Care Act works as intended, giving hospitals a chance to recoup more of the cost of care they provide instead of having to absorb it when a low-income patient can't pay,” the researchers said.

Meantime, the data “shows the flipside of the situation” among the non-expansion states.

“There, hospitals continued to experience the same or even higher demand for care from people without insurance,” they said.

“In expansion states, we see exactly what we would expect to happen after Medicaid became available to more people,” says Sayeh Nikpay, Ph.D., MPH, lead author of the new study published in the January issue of Health Affairs. “Even in these early months, the shift from uninsured to Medicaid contrasts sharply with the steady demand for uninsured care in non-expansion states. This has implications for the financial status of hospitals.”

The researchers said the study results have implications for states that have not expanded Medicaid: Hospital financials may suffer significantly going forward if those hospitals continue to provide care to the uninsured while hospitals in expansion states prosper under the new rules. Also, states that are evaluating having expanded Medicaid enrollment may want to consider the data before making a decision.

“The stakes for hospitals in those states will soon get higher. A year from now, another provision of the Affordable Care Act is scheduled to ratchet back the federal funds that some hospitals get to make up for some of the cost of caring for the uninsured,” the researchers said.