When John Henderson is asked to sum up the impact of the Affordable Care Act (ACA) on rural hospitals, his answer boiled down to one word.
"Underwhelming."
Henderson is the former CEO of Childress Regional Medical Center in the panhandle region of Texas. He now serves as the head of the Texas Organization of Rural and Community Hospitals, serving a state that has seen 27 rural hospitals close their doors since the ACA got passed in 2010.
Rural hospitals have been hit hard across the U.S. since the law was enacted. There have been 126 rural hospital closures since 2010, according to data from the University of North Carolina at Chapel Hill.
Part of the problem with the ACA has been the Medicaid expansion.
“We had modest gains in the uninsured population but what quickly followed the legislation was you couldn’t force expansion,” Henderson told FierceHealthcare.
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In 2012, the Supreme Court ruled that states must decide whether to adopt the Medicaid expansion. And in the plenty of states that decided not to expand under the ACA, more rural hospitals have closed, studies have shown.
An analysis from the Pittsburgh Morning Sun and its parent company Gatehouse Media found states that didn’t expand saw 77 rural hospitals close over the past decade, compared to 29 in Medicaid expansion states.
More states are deciding to expand Medicaid, as there are only 14 states that have not expanded under the ACA.
But the scattered Medicaid expansion hasn’t been the only impact of the ACA on rural hospitals.
A major issue for hospitals is the ACA reduced their ability to write off bad debt. The idea was that hospitals would have more customers to treat because of an increase in insurance coverage from the exchanges and the Medicaid expansion.
“Bad debt—instead of going down as a result of the ACA—has gone up for rural providers,” said Maggie Elehwany, vice president of government affairs and policy for the National Rural Health Association.
Another problem is that private insurers have not penetrated the rural marketplace, leading to little competition and higher prices for plans sold on the exchanges in some rural areas, Elehwany said.
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“In so many rural areas there is absolutely no market penetration and little choice,” she added. “Almost always that rural patient is buying a plan they think they can afford that they really can’t.”
The ACA also included a cut in payments to disproportionate share hospitals, which offer a large amount of charity care. The cut has not gone into effect as hospitals still have a high level of charity care, especially in non-expansion states.
Elehwany laments items missing in the final version of the ACA that could have boosted rural providers. These include a major boost to the National Health Service Corps and a workforce commission, but they were never funded.
The ACA “didn’t unfold the way Congress was initially envisioning,” she said.