Rural hospitals are hurting in states that chose not to embrace the Affordable Care Act’s expansion of Medicaid.

The expansion, which was originally crafted to be mandatory but was rendered optional by a Supreme Court decision, was funded entirely by the federal government for the first several years and will be 90 percent federally-funded in the long-run. The expansion enables states to raise the eligibility for Medicaid to all households below 133 percent of the federal poverty level.

A study published this week in Health Affairs found that Medicaid expansion had a much greater impact on the bottom lines of rural hospitals’ than those of urban hospitals.

In states that chose to expand Medicaid, rural hospitals gained significant revenue, while urban hospitals did not appear to be greatly affected.

Whence comes the disparity? Rural areas are poorer, explain the University of North Carolina researchers who authored the study.

While plenty of American poverty is urban, big metro areas are better off in the grand scheme of things than rural areas. A larger percentage of hospital patients in urban areas are well-to-do and have good insurance.

Research has shown that uncompensated hospital care has declined as a result of the ACA, the most significant part of which has been the Medicaid expansion. A study last year found that in 2014, the first full year of the ACA implementation, hospitals experienced a $7.4 billion drop in uncompensated care.

However, in states that did not expand, hospitals did not benefit nearly as much.

“If you’re [a hospital] in a state that did expand Medicaid, obviously you’re going to be experiencing lower amounts of uninsured. Your bad debts and charity care have gone down,” Brock Slabach, senior vice president at the National Rural Health Association, told Kaiser Health News.

Nearly three years after the implementation of the ACA, seven Republican-run states that initially resisted Medicaid expansion have reversed course. In Louisiana, that happened after a Democrat took over as governor last year, but in five other states it was Republican governors and legislatures that changed their mind on the issue. In Alaska, the effort was led by an independent governor.

Instant Insights /

Rural hospitals hurt by lack of Medicaid expansion, study says

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