Using 1115 Waivers to Fund State Uncompensated Care Pools
What is an Uncompensated Care Pool?
Uncompensated care pools (UC pools, or UCPs) are one strategy used by states in order to fund care for the uninsured and the underinsured. The pools are primarily used to pay providers for a portion of the free care they provide, thereby ensuring access to critical inpatient hospital and other provider services. UC pools, also called “Low Income Pools,” leverage 1115 Medicaid demonstration waiver authority to fund hospitals and health systems that:
- Care for a large number of uninsured patients,
- Provide a disproportionate amount of charity care,
- Have incurred "bad debt" from unpaid bills, and/or
- Serve a disproportionately large number of Medicaid beneficiaries whose care is reimbursed at a lower rate than privately insured individuals.
This brief provides an overview of the seven states that use Medicaid 1115 demonstration waivers to fund their Uncompensated Care: California, Florida, Kansas, Massachusetts, New Mexico, Tennessee, and Texas. We also include information on two states—Arizona and Hawaii—with recently expired 1115 waivers that formerly were used to fund UC pools.