The Stubborn States Refusing To Expand Medicaid Are Going To End Up Exacerbating Rural Poverty


The political fight over Obamacare’s optional Medicaid expansion has emerged as a partisan issue — while Democratic-controlled states have agreed to expand the public health program, GOP-led states remain resistant to anything that might seem like cooperating with the health reform law. But it’s not just a divide between blue and red. Medicaid expansion also has the potential to widen the gulf between urban and rural America.

At a recent conference on rural health care, health economists warned that the battle to implement health reform has huge implications for rural areas of the country, which already tend to lack access to a wide range of medical services. When researchers look specifically at the rural residents who could gain coverage under the Medicaid expansion, more than half of them live in states that have refused to expand the program. The opposite is true for the people who live in urban areas — more than half of the urban residents who could become eligible for Medicaid coverage under Obamacare are living in states that have accepted the expansion.

That’s why Tim McBride, a health economist with the Rural Policy Research Institute’s Center for Rural Health Policy Analysis, sees Medicaid expansion as a “rural issue.”

“I don’t see an upside to not expanding,” McBride told hospital administrators and health care professionals at the recent conference. “The truth is, this will be really important money for rural hospitals, rural health providers, rural communities.”

Obamacare partially funds the Medicaid expansion by making some cuts to hospitals’ reimbursement rates. Those cuts were intended to be eased by the hundreds of thousands of previously uninsured people gaining access to Medicaid, as well as the federal funds designated for states that choose to expand the program. But in states that have rejected the expansion, rural hospitals face cuts without getting any of the potential benefits to offset them. States like Missouri have projected that, without Medicaid expansion, up to 50 percent of the rural hospitals in the state are likely to be forced to close.

In additional to rural health care providers, rural residents also stand to significantly benefit from Obamacare’s expansion. Since the rural poor are less likely to have employer-sponsored health insurance, they’re therefore more likely to either rely on public programs like Medicaid or go uninsured. This is the population that the health reform law intends to reach through either the expanded state-level Medicaid pools or the new state-level insurance marketplaces that will open next month.

Previous studies have found that health disparities between rich and poor areas of the country are only getting worse. Health outcomes are increasingly tied to the zip codes where people live. And because the Republican lawmakers who continue to resist health reform govern some of the sickest and most uninsured areas of the country, they have the power to widen the gulf between the healthiest and sickest states even further. Nearly two out of three low-income Americans who are eligible for Medicaid coverage under Obamacare likely won’t get those benefits next year because their legislators are blocking them.