Dozens of hospitals have closed in states that expanded Medicaid

By Mary Lou Masters
Daily Caller News Foundation

Medicaid expansion has failed to prevent hospital closure, with almost 50 shutting down in expansion states since 2014, according to research given exclusively to the Daily Caller News Foundation.

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The research from the Foundation for Government Accountability (FGA) indicates that while Medicaid expansion was intended to solve hospitals’ finances and job shortage, its “empty promises” have done the opposite, report author Hayden Dublois wrote. Hospitals instead have had to shut their doors, lost thousands of jobs and racked up substantial losses, amounting to a loss of almost 5,400 beds.

“The false promises of Medicaid expansion—especially with respect to hospitals—have misled policymakers into enacting massive expansions of welfare,” Dublois stated.

One of the shortcomings of expansion was the burden of transferring individuals from their private insurance provider over to Medicaid, Dublois suggested. Because Medicaid covered about 60% of what providers reimburse, expansion states lost money on every patient who made the switch, amounting to nearly $5 billion.

Expansion states’ profit margins dropped by 10% on average, while non-expansion states were experiencing profit margin growth, according to the report. Because of this, expansion states were ill-prepared for the COVID-19 pandemic, with “fewer hospital beds and intensive care unit beds per capita than their non-expansion neighbors,” Dublois stated.

In Philadelphia, Hahnemann Hospital closed down just six years after expansion, the research indicates. Because the hospital relied on Medicaid, it was “unable to break even due to the low Medicaid payments.”

After expansion, the Ohio Valley Medical Center in West Virginia and the East Ohio Regional Hospital in Ohio both shut down partly because of $37 million in losses, citing the “lower-reimbursing Medicaid program,” the report shows.

Hospital closures in non-expansion states are not related to their lack of expansion, with 95% citing other reasons, according to the research. The four hospitals that did cite the lack of expansion as the reason for their closure were allegedly involved in fraud, according to Dublois.

One of the four that blamed their non-expansion for their closure was the Oswego Community Hospital in Kansas, the research indicates. A year after they shut down, the hospital’s management was charged with $1.4 billion in fraud.

The Affordable Care Act (ACA) of the Obama administration expanded Medicaid in hopes to reach more Americans of a lower income, and extended coverage to those 65 and under with incomes up to 138% of the federal poverty level.

The ACA initially called for nationwide expansion, but the Supreme Court decided that the states should choose. Medicaid expansion is funded mainly by the federal government, with the states making up the rest.

Medicaid expansion allows more people to have access to health care, which led blue states to quickly enact it. But expansion is also a form of welfare and uses taxpayer dollars to fund the program, which many red states dislike.

There are currently 38 expansion states, along with Washington, D.C., and South Dakota plans to join them in July; 12 states still have not expanded Medicaid.

The U.S. Department for Health & Human Services did not respond to the DCNF’s request for comment.