Medicaid cuts wreck rural hospitals

So it is completely mystifying that the Senate, according to all reports, is seriously considering capping federal Medicaid payments to states starting in 2020 and each year thereafter in perpetuity. A cap on Medicaid would almost certainly lead to a large federal disinvestment from health care in rural America, leaving rural communities without health care infrastructure and children and families without geographic access to care.

Allow me to connect the dots:

Dot #1: Medicaid is the largest insurer for children in rural America and one of the key insurers for non-elderly adults. This week Georgetown University CCF and the UNC Rural Health Research Program issued a report on the role of Medicaid in Small Towns and Rural America.

By analyzing the Census Bureau’s American Community Survey, we found that in 2014-2015, Medicaid was the source of health coverage for 45 percent of children and 16 percent of adults in small towns and rural areas nationally. In 15 states, half or more of the children living in small towns and rural areas were covered by Medicaid. In eight of those states—Alabama, Arkansas, Arizona, Mississippi, New Mexico, South Carolina, Tennessee, and West Virginia—the federal government pays at least two thirds of the cost of the Medicaid program.

Dot #2: Many rural hospitals are financially precarious. A Healthcare Management Partners study of the financial performance of 1,300 rural hospitals throughout the country found that, for a combination of reasons, rural hospitals have average margins of less than one-half percent. Because rural hospitals are so heavily reliant on Medicare and Medicaid revenues, the report concluded, “even relatively small reductions in federal payments will force the closure of large numbers of rural hospitals.”