It may not come as a surprise to many people that the Indiana Hospital Association has given Gov. Mike Pence’s HIP 2.0 Plan its enthusiastic endorsement. It will, after all, result in 350,000 more Hoosiers being able to access affordable health care while giving the state access to billions in federal dollars to help make that coverage happen.
For our member hospitals, having more insured patients and reducing uncompensated care will be helpful financially. But for our members in rural areas – many of which are considered “critical access” hospitals – it is nothing short of a lifeline.
In fact, for many of Indiana’s rural hospitals, the increase in coverage through HIP 2.0 may be the key to their survival.
What is it that makes many rural areas more challenging to serve? Demographics play a key role as rural areas generally have older populations, making rural hospitals critically vulnerable to cuts in government funding.
Medicare payment cuts were imposed on hospitals to pay for expanded coverage under the Affordable Care Act – about $4 billion over 10 years, which have been compounded even further by the sequestration impasse. To offset those cuts, rural hospitals must have more Hoosiers enroll in private insurance through the exchanges and in programs like HIP 2.0 just to stay out of the red.
Some recent statistics from the National Rural Health Association put this problem into stark perspective.
Currently more than 41 percent of critical access hospitals operate at a net financial loss. These hospitals have already seen a 2 percent cut due to sequestration. With little help for hope on the horizon from a program like HIP 2.0, it could very well be the push that causes many hospitals to go out of business.
But, for rural hospitals, we believe the adoption of HIP 2.0 is about more than just the bottom line. We believe everyone deserves access to quality, affordable health care, regardless of the income level of your neighbors or the size of your town. If hospitals in rural areas were forced to shut their doors or consolidate, rural patients would have longer drives to emergency rooms and lose access to physicians, maternity care and interventions for heart attacks and strokes. They would face the very real prospect of a future where they would have second-class access to care.
Let’s not forget that in many rural communities, the local hospital is one of the largest employers in their county, if not their region. Having access to quality, comprehensive health care is at the top of the list in conversations with businesses seeking to locate to or expand in rural areas. Closure of a hospital would likely damage, if not doom, a town’s economic development prospects. Would Honda have located in Greensburg or Toyota in Princeton if not for the outstanding hospitals in those communities?
The Indiana Hospital Association has endorsed HIP 2.0 because we believe it is the right prescription for Hoosiers. It not only brings health care options to the people who need them most, but it improves the health of member hospitals, too. We hope that the program will be approved soon so that we can strengthen the safety net and improve the quality of life in every community in Indiana, large and small.