Across the country, rural hospitals have been closing at an alarming rate. Federal subsidies for uninsured care are being reduced and 19 states have chosen to not expand Medicaid’s eligibility limits, causing hospitals in these non-expansion states to bear the cost of treating uncompensated care.
When the Affordable Care Act was passed, Medicaid expansion and the reduction of hospital subsidies were designed to work in concert to accommodate for uncompensated care. However, the Supreme Court’s 2012 ACA decision granted states the choice to accept or deny Medicaid expansion. This created an unsustainable financial squeeze for hospital networks in the 19 non-expansion states, resulting in hospital downsizing and closure.
52/68 (77%) of rural hospital closures have occurred in states that have not expanded Medicaid
According to the University of North Carolina Rural Health Research Program, there have been 68 rural hospital closures across the country since the Affordable Care Act was passed. When looking closer at this data, we found that hospital closures are disproportionately impacting communities in states that chose to not expand Medicaid eligibility limits.
It is noteworthy that 52/68 (77%) of these closures have occurred in states that have not expanded Medicaid. This overwhelming figure demonstrates how essential Medicaid’s evolution has become for businesses and rural communities where hospitals are the local economic engine.
The prevention of hospital closures is an argument for Medicaid expansion that is gaining traction in many states – hospital associations in non-expansion states like Utah have strongly advocated for Medicaid expansion, seeking financial protection from treating unnecessarily uninsured patients.