American Association for Physician Leadership

The Impact of Medicaid Expansion on Critical Access Hospitals: A Game-Changer for Healthcare Accessibility

Baynes Welch


Oct 5, 2023


Healthcare Administration Leadership & Management Journal


Volume 1, Issue 4, Pages 145-146


https://doi.org/10.55834/halmj.8298457666


Abstract

Medicaid expansion has undeniably brought about a positive transformation in the landscape of healthcare accessibility, particularly for CAHs in states that have adopted this expansion. The increase in Medicaid funding resulting from higher, insured patient volumes has allowed CAHs to become more financially stable, invest in modern infrastructure and medical technology, and expand their scope of services. By continuing to expand Medicaid and invest in CAHs, the nation can ensure that healthcare remains accessible and affordable for all, particularly in underserved rural communities.




The Medicaid program, a joint federal and state initiative, has long played a vital role in providing healthcare coverage to low-income individuals and families in the United States. Critical Access Hospitals (CAHs), essential providers of medical services in rural and underserved areas, have historically faced challenges due to limited financial resources and reduced access to quality healthcare for their communities. However, with the expansion of Medicaid, several states have experienced positive transformations in their healthcare landscapes, leading to enhanced financial stability for CAHs and improved healthcare accessibility for vulnerable populations.

Medicaid Expansion and Its Benefits for Critical Access Hospitals

Medicaid expansion, a provision under the Affordable Care Act (ACA) that allows states to broaden their Medicaid eligibility criteria, has had a significant impact on the operations and viability of CAHs. Prior to the expansion, Medicaid primarily covered low-income pregnant women, children, elderly individuals, and people with disabilities. However, with the expansion, states had the option to extend coverage to all low-income adults with incomes up to 138% of the federal poverty level.(1) One of the most notable benefits of Medicaid expansion for CAHs is the increase in Medicaid funding for patient services. By expanding Medicaid eligibility, more individuals gained access to health insurance, resulting in a substantial rise in the number of insured patients seeking medical care.(2) With higher patient volumes and a reduction in uncompensated care,(3) CAHs experienced a boost in revenue, allowing them to maintain and expand their services, invest in modern medical technology, and recruit specialized healthcare professionals.

The Medicaid expansion also has resulted in increased patient volumes at CAHs, especially in states that experienced significant reductions in the number of uninsured patients.(3) While this surge in patient volumes can strain resources, it also allows CAHs to provide much-needed care to previously underserved populations, addressing rural health disparities by increasing access to healthcare services for vulnerable populations.(1) CAHs, as frontline providers, have a significant role in reducing disparities and improving health equity in rural areas. More insured patients lead to early intervention and management of chronic conditions, catalyzing better health outcomes for the communities served by these hospitals.

States that Recently Adopted Medicaid Expansion

Since the implementation of the ACA, several states have resisted Medicaid expansion due to political, financial, or ideological reasons. However, as the evidence of the positive impact of expansion became apparent, more states began to embrace the opportunity to extend Medicaid coverage to a broader population. To date, 40 states and the District of Columbia have adopted Medicaid expansion.(4) Some of the states that recently adopted Medicaid expansion include the following:

  • North Carolina: In March 2023, Governor Roy Cooper signed a law that would expand Medicaid in the state. Implementation will occur after the state passes the Fiscal Year 2023-2024 budget by June 30, 2024.(4)

  • Georgia: Recently, Georgia elected for partial Medicaid expansion that includes a work requirement for potential patients. By not accepting the full federal Medicaid expansion, Georgia will not receive enhanced federal funding, and only a portion of otherwise eligible recipients will receive insurance.(5)

  • South Dakota: Medicaid coverage expansion began July 1, 2023, following a ballot measure approved in November 2022 that added Medicaid expansion to the state constitution.(4)

Reduced Reliance on County and State Funding

CAHs have often relied on county and state funding to make ends meet, especially in underserved regions where patient volumes were low and insurance coverage limited. Medicaid expansion has significantly mitigated this reliance by expanding the pool of insured patients. As more patients have access to Medicaid, the number of uninsured or underinsured patients decrease, leading to a reduced burden on hospitals to cover uncompensated care costs.

The reduced reliance on county and state funding is a win-win situation for all stakeholders involved. Counties and states can allocate their budgets more efficiently and redirect funds to other pressing needs while CAHs become financially self-sustaining entities capable of enhancing the quality of care offered.

Conclusion

Medicaid expansion has undeniably brought about a positive transformation in the landscape of healthcare accessibility, particularly for CAHs in states that have adopted this expansion. The increase in Medicaid funding resulting from higher, insured patient volumes has allowed CAHs to become more financially stable, invest in modern infrastructure and medical technology, and expand their scope of services. Additionally, the decreased dependence on county and state funding has relieved financial pressure on local governments, enabling them to allocate resources more strategically. By continuing to expand Medicaid and invest in CAHs, the nation can ensure that healthcare remains accessible and affordable for all, particularly in underserved rural communities.

References

  1. Yager A. Connecting the dots: How Medicaid expansion will improve public health, increase financial stability, and lessen disparities in South Florida. Florida Health Justice Project. July 2022. https://www.floridahealthjustice.org/connecting-the-dots.html . Accessed July 21, 2023.

  2. Center on Budget and Policy Priorities. The far-reaching benefits of the Affordable Care Act’s Medicaid expansion. Center on Budget and Policy Priorities. October 21, 2020. https://www.cbpp.org/research/health/chart-book-the-far-reaching-benefits-of-the-affordable-care-acts-medicaid-expansion . Accessed July 21, 2023.

  3. Buchmueller TC, Cliff BQ, Levy H. The benefits of Medicaid expansion. JAMA Health Forum. 2020;1(7):e200879. https://doi:10.1001/jamahealthforum.2020.0879

  4. Kaiser Family Foundation. Status of state Medicaid expansion decisions: Interactive map. Kaiser Family Foundation. July 3, 2023. https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/ . Accessed July 21, 2023.

  5. Norris L. Medicaid eligibility and enrollment in Georgia. Health insurancee.org. June 29, 2023. https://www.healthinsurance.org/medicaid/georgia/ . Accessed July 21, 2023.

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Baynes Welch

Baynes Welch is a senior associate at Coker Group, Alpharetta, Georgia.

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