The Affordable Care Act (ACA) was designed to provide more Americans with access to affordable health insurance. Since its implementation in 2014, it has done just that, with millions of Americans taking advantage of new health coverage.

The expansion of Medicaid in many states, young adults staying on their parent’s insurance until age 26, and the creation of insurance Marketplaces makes health insurance much more attainable to the average American. One of the positive benefits to this is that the amount of uncompensated care that occurs at hospitals has fallen.

Why Hospitals Have Uncompensated Costs

Without health insurance, most patients cannot afford to pay the bill for even routine medical care. However, hospitals that participate in Medicare are required to at least stabilize patients with emergency medical conditions who arrive, whether they have insurance coverage or not. As a result, uninsured Americans often use their hospital’s emergency room as their only care facility. However, safety net providers, including some hospitals, also provide routine care to Americans regardless of their ability to pay.

Because these Americans were not receiving the routine care they needed, their medical needs when they arrived at the hospital were often more extreme. The conditions presented were often preventable, but uninsured patients could not afford the preventive measures.

Some of the uninsured who arrived at hospitals were those who couldn’t qualify for Medicaid because of the stringent requirements. Most states had no care for able-bodied low-income childless adults, for instance, and these citizens did need care. Hospitals provided it, often in extreme cases, racking up a lot of uncompensated costs.

How the ACA is Reducing Uncompensated Costs

A recent government report showed that uncompensated hospital costs fell $7.4 billion in 2014, the first full year of ACA implementation. This represents a drop of 21 percent, a significant improvement for hospitals.

The change the ACA implemented that had the most impact on these costs was encouraging the expansion of Medicaid eligibility across the country. While not all states expanded their Medicaid programs, many did, and these states saw the most significant drop in hospital uncompensated care costs.

Another positive change was the provision that required insurance carriers to allow parents to keep their children on the policy until age 26. Although the 18-25 age group is a notoriously under-insured and uninsured demographic, they don’t typically require a lot of medical care. However, by giving this age group the opportunity to have access to insurance coverage via their parents’ plans, this played a contributing role in the decrease of uncompensated hospital costs.

Finally, the creation of health insurance Marketplaces made health insurance coverage more accessible to all Americans, giving tax subsidies to help them afford the monthly premiums. Although states that expanded Medicaid eligibility saw a greater reduction in uncompensated care, more Americans having obtained health insurance was another factor in reducing uncompensated hospital costs.

The ACA has helped more Americans obtain health coverage than ever before. By expanding coverage for dependents, encouraging states to expand Medicaid, and creating the health insurance Marketplace, the law increased the number of Americans with insurance, which has helped reduce hospitals’ uncompensated care costs by over 20 percent.

For more information on how the ACA affects hospitals, read ObamaCare and Doctors and Hospitals.