In States Refusing Federal Coverage Funds, Rural Hospitals Pay the Price

December 1, 2014 by

Fifteen hundred hospital beds have vanished in rural America since 2010. The cause of the disappearing beds is no mystery:  rural hospitals are closing – and at a quickening pace.  Federal sequestration cuts and lower reimbursements from public and private insurers have hit U.S. hospitals’ bottom lines with a one-two punch.  But rural hospitals are hit particularly hard, because they are caught in a vise where they serve higher rates of uninsured patients,  but are more likely to be located in states that have rejected health reform and the funds to cover the uninsured that come with it. Most of the shuttered hospitals are in states not expanding healthcare coverage – including Maine.

This phenomenon likely will get worse.  Forty-three rural hospitals have closed in the past three years, but almost a third of the closures have occurred since January.  Georgia, a state where leaders remain resolutely opposed to accepting federal health reform dollars, has lost five hospitals in just two years, and more are verging on collapse.  And for rural Americans, a hospital closure isn’t just an inconvenience.  A closed hospital means that some rural residents must travel hours for care – and when it comes to trauma or other emergencies, minutes count.   Hospital closures can devastate  a small-town American economy.  In Maine, hospitals are the largest employers in seven counties – including Aroostook, Penobscot, Knox, and Lincoln (where one hospital- St. Andrews in Boothbay Harbor -recently closed).

Health reform will benefit rural Americans significantly–  if some of their leaders cease blocking its full implementation.  Rural Americans are more likely to be low- to moderate-income, and less likely to have health insurance. Half of all rural workers are in fields like forestry or farming, where employer-based coverage is less common.  In an uneven economic recovery that has primarily benefited city dwellers, rural residents are more likely to live in households where no one has full-time work. Fifteen percent of rural Americans fall into the “coverage gap” – where they are not eligible for Medicaid coverage, but earn too little to afford health insurance in the Affordable Care Act (ACA) marketplace.  About 25,000 Mainers fit this profile.

Arkansas-  another rural state where accepting federal healthcare dollars was contentious – ultimately  hammered out a compromise that used the federal funds to purchase private insurance coverage through the ACA marketplace.  No rural hospitals have closed in Arkansas since 2010.  Insuring thousands of Arkansans, and cutting down uninsured hospital visits, cut the amount that Arkansas hospitals spent on free care by more than half.

This looming wave of rural hospital closures is relevant to Maine, where sixteen hospitals are rural critical access hospitals, and the percentage of uninsured Mainers has ticked up.  Two-thirds of Maine hospitals are in the red – an all-time high.  If Maine does not accept federal healthcare dollars, Maine’s hospitals are slated to lose $900,000,000 over the next ten years.  This is unsustainable, unnecessary, and bad for both Maine’s economy and the health care of thousands of Mainers, especially in our rural communities.

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