The Role of Medicaid in Rural Communities

July 14, 2020 // Tamia Esmon and Shery Girgis

There are significant challenges for individuals residing in rural America. Rural residents are less likely to be employed and more likely to have low incomes. Also, these individuals face significant barriers to accessing care, face a shortage of providers, a recent increase in closure of hospitals, and long-distance travel to providers. Though, the primary challenge in these communities is health care coverage. The significant disparities of access to health care are avoidable, and Medicaid expansion would work as a bridge to closing this gap.

The majority of rural communities are spread across 2,500 counties that are heavily concentrated in the South and Midwest making up a population of about 52 million people. The individuals residing in these rural communities are likely to be white, older, and have a lower level of education. Regarding education levels, fewer than two in ten people in rural areas have a bachelor’s degree or higher. Furthermore, they are less likely to be in the labor force and more likely to have a disability. In urban areas, 9% of the population has a disability in comparison to 14% of the population in rural areas. Rural residents are more likely to report poorer physical and mental health and have higher rates of cigarette smoking, obesity, and physical inactivity compared to their urban counterparts. Lower education levels, higher disability rates, advanced age, and poorer health impacts the potential to earn enough money to afford necessities, including health care.

Medicaid plays an important role in addressing the challenge of coverage and access to health care. A significant factor in health care coverage and access are the low rates of private insurance coverage; Medicaid helps fill this gap. Medicaid covers nearly one in four non-elderly individuals in rural areas. Medicaid expansion provides an additional boost in coverage rates by 6% and reduces uninsured rates.

Conversely, efforts like Tennessee’s block grant  and work reporting requirements proposals to cut Medicaid would have a disproportionate impact on rural communities because they are more likely to rely on Medicaid for access to affordable health care. During times of recession, like the current one caused by the COVID-19 pandemic, funding through the Medicaid program is a lifeline. Without sufficient federal dollars, the state would financially struggle to keep up with the rising need as people lose their income. States would likely need to increase state spending to maintain coverage or make program cutbacks that would reduce eligibility, benefits, or provider payments. Also, there would be an increased demand on safety net providers, including community health centers and public hospitals. A loss of federal Medicaid revenues would increase fiscal strains on the state.

A reduction in Medicaid revenue would also likely exacerbate hospital closures in rural communities. Tennessee has the second highest rate of hospital closures in the United States, thirteen since 2010.

Communities with nearby rural hospital closures see a rise in emergency medical service costs, increased time of transportation to health care, transportation barriers, and a loss of jobs for hospital staff. The economic and health impacts of losing a hospital are detrimental to a community; Medicaid expansion could be key to saving rural hospitals, and in turn, saving lives.