Medicaid Expansion will Hurt Rural Hospitals

Last year, while serving in the Mississippi Legislature, I had a discussion about Medicaid expansion with a county administrator from the Mississippi Delta. This county, which lacks both a hospital and private clinics, established a medical clinic to serve its citizens. As an economically disadvantaged area, the clinic caters exclusively to patients with Medicaid insurance.

During our discussion, the county administrator mentioned that Medicaid's reimbursement rates do not cover the full cost of patient care. As a result, the county is currently required to fund the clinic with approximately two million dollars per year to bridge the gap. The administrator also expressed concern that if the clinic is mandated to see more patients through Medicaid expansion, the county's inability to further supplement the clinic's funding could potentially lead to its closure.

Expanding Medicaid will not address the challenges faced by rural hospitals or rural healthcare. Providing able-bodied adults with taxpayer-funded insurance will divert resources away from those in dire need.

The advocacy for Medicaid expansion by hospitals stems from their desire to dominate the healthcare market within the state. Larger hospitals, with a significant number of private insurance patients, can absorb losses and use the expansion as an opportunity to grow their system, reduce competition, and increase healthcare costs for all patients.

Expanding Medicaid will have negative consequences for various stakeholders:

1. Rural healthcare patients: Medicaid expansion will not address the specific challenges faced by rural healthcare systems, potentially leading to the closure of essential services in these areas.

2. Poor citizens, women, and children: The diversion of resources to able-bodied adults will result in reduced care for those who are truly in need.

3. Taxpayers and private insured: The expansion will lead to higher taxes to fund the program and increased healthcare costs for private insurance holders, as larger hospitals raise prices to compensate for losses from Medicaid patients.

There are alternative approaches to addressing the needs of citizens living in rural areas and those who are uninsured, rather than expanding Medicaid. I addressed this issue in my article about repealing Certificate of Need Laws.