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Rural Health Care in Crisis: Expanding Medicaid would help keep rural hospitals open and rural communities healthy

As of Friday, 33 percent of new COVID-19 infections in North Carolina were in rural counties. As cases spike in rural areas, both nationwide and in North Carolina, health care disparities have again entered the spotlight.

A study conducted by the Robert Woods Johnson Foundation, NPR and Harvard University School of Public Health found that almost one quarter of rural households are unable to get medical care when they need it. Additionally, the study found the need for quality care is greater in rural areas. “More than half of rural households (53%) report anyone in their household is living with a chronic illness, while 42% report anyone in their household is at high risk for developing serious illness from COVID-19 due to their age or underlying medical conditions.”

According to the Georgetown University Health Policy Institute, financial stress brought on by the COVID-19 pandemic “has pushed these rural providers to the brink.” Rural hospitals in states that have not expanded Medicaid operate on negative margins while the same type of hospitals in expansion states operate at positive margins.

A health economist from the University of Colorado found that Medicaid expansion had a positive impact on hospitals’ financial situations, making them less likely to shutter. Most at risk for closure? Rural hospitals in states that did not expand Medicaid.

In North Carolina, rural hospital CEOs have called for Medicaid expansion. With their hospitals operating on “thin margins” they agreed that Medicaid expansion wouldn’t solve all of their problems but would “go a long way” relieving pressure on emergency departments and creating a healthier population.

A big reason for the thin margins is the unreimbursed, or uncompensated care, these rural hospitals take on. A direct result of seeing higher numbers of uninsured patients. At Cape Fear Valley Health System, for example, more than 20 percent of visits are uncompensated. With Medicaid expansion, these hospitals would see fewer uninsured patients.

Rural hospital closures have a disproportionately large impact on the surrounding community. But North Carolina has lost seven since 2010. And a March 2020 study found that 15 out of 50, or 30 percent, of the state’s community hospitals are vulnerable to closure. North Carolina is in the top nine states with the highest level of hospital closures since 2010. 

When rural hospitals leave a community so do other health care specialists. The drive to a specialist, hospital or ER can be a life or death difference. According to a 2018 NC Rural Center presentation to the General Assembly in 44 of NC’s rural counties the hospital is one of the top five employers.

With the COVID-19 pandemic showing up in small towns in full force, that seven hospital loss means a loss of 229 rural hospital beds. Those beds can make all the difference in places like Robeson County where cases remain “stubbornly high.”

Expanding Medicaid, which the Republican-led General Assembly has blocked since 2013, is an obvious way to bring some financial stability to these hospitals and retain doctors, specialists and jobs in these communities. The General Assembly’s own Fiscal Research Division predicts Medicaid expansion could generate up to $665 million in new Medicaid payments for rural hospitals each year.

Expanding Medicaid would help keep rural hospitals open and rural communities healthy.