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Non-Partisan Study: Up to Half of Rural Hospitals Could Close Under Betsy Londrigan’s Medicare-X Plan

July 17th, 2020

“These results have serious implications not only for individual hospitals themselves but for access to care for rural residents, as well as the economic base of communities, where the hospital is often the largest employer.”

Taylorville, IL – A non-partisan study highlighted by the American Hospital Association found that the Betsy Londrigan-backed Medicare-X plan could force the closure of up to half of high-risk rural hospitals across the country, including up to half of the rural hospitals in Illinois.

“Betsy Londrigan’s Medicare-X plan could force the closure of rural hospitals across central and southwestern Illinois. We’re talking about small, but vital hospitals in towns like Jerseyville, Pana, Monticello and everywhere in between. These hospitals are major employers in the local economy and in many cases, the only access to health care rural families have. It’s time for Londrigan to finally own up to the fact that her Medicare-X plan would cut funding for hospitals, destroy health care jobs and make it more difficult for patients to access care.” – Aaron DeGroot, Davis campaign spokesperson

The Londrigan-backed Medicare-X public option plan opens Medicare enrollment to a much larger group of individuals, not just seniors. The plan achieves health care “savings” by reimbursing hospitals significantly less for services relative to reimbursements from private and employer-sponsored health insurance plans. A separate study found that the Londrigan-backed plan would cut funding for hospitals, doctors and nurses by nearly $800 billion over a 10-year period.

The authors of the study tested 3 possible scenarios based on the degree of participation in the public option, ranging from only participants in state exchanges utilize the public option, to 25% of employers utilize the public option, and finally 50% of employers utilize the public option. 

In all scenarios, rural hospitals and communities are negatively impacted by the public option and would see cuts in their funding.

The study concluded that, “The implementation of a Medicare public option on health exchanges presents significant risks to rural hospitals and communities nationwide… Even with a conservative estimate of the shift in commercial lives, the Medicare public option would exacerbate the already significant financial risks rural hospitals face… These results have serious implications not only for individual hospitals themselves but for access to care for rural residents, as well as the economic base of communities, where the hospital is often the largest employer.”

According to the study, anywhere between 24 to 39 high-risk rural hospitals in Illinois could face closure do to the loss in funding under the Londrigan-backed Medicare-X plan. The study showed that rural hospitals in Illinois could lose anywhere between $222 million to over $1.3 billion a year in funding, based on the different scenarios. That equates to a 1.9% to 11.3% cut in funding for these hospitals.

Rural hospitals in IL-13 include Carrollton, Jerseyville, Litchfield, Staunton, Carlinville, Hillsboro, Taylorville, Pana, Clinton and Monticello.

And as Capitol Fax’s Rich Miller noted, “This congressional district has a huge number of major regional hospitals, likely the most in Illinois and perhaps one of the most in the country. Those hospitals are significant local employers and they also drive technological development. Not to mention that hospitals have been especially hard-hit during the COVID-19 pandemic.”

Rodney Davis has introduced bipartisan legislation to help out-of-work Americans keep their employer-provided health insurance through COBRA. Rodney also supported $175 billion in historic investments in hospitals and health care providers through the bipartisan CARES Act. Rodney also introduced bipartisan legislation to prevent health care providers who receive COVID-19 funding from furloughing nurses.

Londrigan announced her support for Medicare-X in 2018, but has since dodged questions on how the plan would decimate hospitals across the country.

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