Hospital entrance sign

Medicaid Expansion and Rural Hospitals

With the election less than 30 days away, political candidates from all across the spectrum are digging in on their political stances, trying to persuade voters to vote for their agenda. Like usual, health care is one of the most important topics for voters, especially in light of the pandemic. Medicaid expansion in North Carolina is one of the most widely debated issues in this election cycle.

Medicaid expansion supporters have made countless claims that frame the issues as having no negative impacts. However, my colleagues and I at the John Locke Foundation have refuted many of these claims such as the common claim that the program won’t cost the state any money, or that there wouldn’t be any negative consequences in the health care market, or that expansion would create 40,000 jobs in North Carolina. While all great political talking points, the reality is likely a much different picture than the one expansion supporters paint.

Another issue supporters of the program believe will be solved by Medicaid expansion is rural hospitals. While no one can deny that our rural communities, especially in North Carolina, have faced issues with access to care, its unlikely that Medicaid expansion would be the silver bullet for rural hospitals that expansion supporters claim. Another report, co-authored by myself, examined the issue of rural hospitals and Medicaid expansion and found the following:

  • Medicaid expansion has not materially improved hospitals’ financial health
  • Promised hospital jobs never materialized after expansion
  • Non-expansion states have seen faster hospital job growth
  • Hospitals are still closing in expansion states
  • Medicaid expansion shifts those with private insurance into lower-paying Medicaid

Again, while these claims make for good talking points, if the impact on rural hospitals were so clear, we would have found the same effect across all states that expanded Medicaid. But this was not the case.

Rural health care will be an issue that both sides of the aisle will have to work towards to reform in the coming years. However, merely expanding the public financing of health insurance will not solve the deep-rooted problems of rural health care: few doctors wanting to practice in these communities, population migration out of rural communities, and hospitals with low volume relying on the third-party payer model for financing. The problem of rural hospitals closing isn’t a new one for the United States. Between 1990-2000, 208 rural hospitals closed. It isn’t reasonable to think the health care problems in rural NC started with the state’s refusal to expand Medicaid beginning in 2014. If anything, as I explained in a recent research brief, the Democratic presidential nominee’s proposal of a public option will be more detrimental for rural hospitals than the rejection of Medicaid expansion.

Rural health care reform will take innovation – reimagining how we make a sustainable rural health care facility model. More public financing of health care is not the answer.

Jordan Roberts / Health Policy Analyst

Jordan joined the Locke Foundation in the summer of 2018 as Health Care Policy Analyst. He analyzes state and national health policy issues with an eye toward removing governm...

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