Study: Joe Biden’s Public Option Could Close Half of American Rural Hospitals

A study released Wednesday found that a government health insurance option, a proposal backed by former Vice President Joe Biden, could close more than half of America’s rural hospitals.

A study commissioned by the Partnership for America’s Health Care Future and conducted by Navigant Consulting found that “adding a government-run insurance plan could decimate rural hospitals.”

Former Vice President Joe Biden’s healthcare plan would create a “public option,” allowing a government health insurance option to compete with private health insurance on the Obamacare exchanges.

The Navigant Consulting study finds that having millions of Americans switch from their private insurance plan to the public option plan, the public option would pay hospitals at Medicare rates, which is typically lower than private insurance, and cut rural hospitals’ revenues between $4.2 billion and $25.6 billion.

The study found that as many as 55 percent of rural hospitals, or 1,037 hospitals across 46 states, could become at risk of closure from a public option. The closure of those rural hospitals represents more than 63,000 staffed beds and 420,000 employees.

Even if rural hospitals were not to close as the result of the creation of a public option, the study finds that the public option could negatively impact access to and quality of care through elimination of rural hospitals’ services and reduction of clinical and administrative staff and cripple the rural communities the hospitals serve.

To make matters worse for public option supporters, the study suggested that to prevent hospitals from closing under the public option system, Medicare would have to increase payments to hospitals between 40 to 60 percent above Medicare rates, which could cost between $4 and 25 billion annually depending on how many employers move employees onto the public option.

Lauren Crawford Shaver, the executive director of the Partnership, said that despite many Democrats’ attempts to portray the public option “as a much more moderate alternative to ‘Medicare for all,’ the truth is the public option would be also damaging, potentially putting the health and well-being of our rural communities at risk.”

Jeff Leibach, the director of Navigant Consulting and one of the authors of the study, said, “rural hospitals are essential to the health and economic well-being of communities across the U.S., and often represent these communities’ largest employer.”

The analysis serves as a dire warning for 2020 Democrat presidential candidates who hope to defeat President Donald Trump in the 2020 presidential election, especially considering that the public option proposal would particularly harm many key swing states.

The study found, if more than 50 percent of Americans with private health insurance move to the public option, many rural hospitals across Minnesota, Michigan, Wisconsin, and Pennsylvania would close as the result of the public option. The Navigant Consulting study found that 49 hospitals across Minnesota would become at high-risk for closure, as well as 26 in Wisconsin, 44 in Michigan, 27 in Ohio, and 25 hospitals in Pennsylvania would likely close if Biden were to enact a public option health insurance plan.

President Trump won Wisconsin, Michigan, Pennsylvania, Ohio, and nearly won Minnesota in the 2016 presidential election, and if Democrats were to push for Medicare for All or a public option plan, those plans could serve for a death knell for America’s rural hospitals and jeopardize their chance of winning the 2020 election.

Many leading Republicans such as Sens. Rick Scott (R-FL) and Mike Braun (R-IN), as well as Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma, have contended that Biden’s public option plan will lead to single-payer health care.

Scott said, with the “Joe Biden plan, basically, they’ll set up a government insurance company and it won’t have to live by the same rules, it’s just a way to get everyone on a government plan.”

“If you do Biden’s plan and what’s going to happen there, they’ll set up the rules where other insurance companies cannot compete so you’ll lose your private insurance, the costs will go [up], the taxpayer is going to pay for this,” Scott added.