The Iowa Cedar Rapids Gazette wrote an analysis Tuesday that up to 52 rural Iowa hospitals could close under former Vice President Joe Biden’s public option plan.
The Cedar Rapids Gazette wrote an analysis, citing a study commissioned by the Partnership for America’s Health Care Future and conducted by Navigant Consulting, which found that “adding a government-run insurance plan could decimate rural hospitals.”
The Iowa paper wrote that 52 rural Iowa hospitals could close under Biden’s public option plan and “rural hospitals could experience a loss of more than $476 million dollars under a public health insurance proposal.”
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 study could serve as a dire warning for Biden in the upcoming Iowa caucus, even though he leads in recent state primary polling.
The Navigant Consulting study found that after 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 would cut rural hospitals’ revenues between $4.2 billion and $25.6 billion.
“They’re in trouble,” Kirk Norris, the president and CEO of the Iowa Hosptial Association, said. “Our community hospitals are in the worst financial shape they’ve been in over 30 years.”
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.
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.”