Protect NC Rural Hospitals and Communities: Close the Health Insurance Coverage Gap

By Christy Craig, Intern, Care4Carolina

Even before the COVID-19 pandemic, many rural hospitals operated on thin margins, but the financial strain has worsened since then. In 2020 alone, 19 rural hospitals across the country closed. In North Carolina, the situation is just as alarming; approximately 30% of rural community hospitals are at risk of closure, and 7 have closed since 2010. The map below shows where these rural hospital closures have happened.

The consequences of rural hospital closures are widespread. A study conducted by the Robert Wood Johnson Foundation, NPR, and the Harvard T.H. Chan School of Public Health found that about 1 in 4 rural households could not get medical care when they needed it during the pandemic. As a result of not being able to access care, 56% of respondents had negative health consequences. This shows the importance of having access to quality healthcare, particularly in rural areas. 

Beyond providing a much-needed source of care for rural residents, rural hospitals are a big part of the local economy. According to a presentation by the NC Rural Center, health systems (hospitals, clinics, etc.) are among the top 5 employers in 44 of North Carolina’s rural counties. If hospitals in rural communities close, many of these communities would suffer from a loss of jobs and local tax revenue. 

Fortunately, there is a way to help rural hospitals and communities. A study by the Chartis Center for Rural Health shows that hospitals in states that have not closed the health insurance coverage gap have a negative median operating margin, while hospitals in states that have closed the gap have a median positive operating margin. Basically, hospitals located in states that have closed their coverage gap are more financially stable, and therefore less at risk of closing, than hospitals in states that have not closed their coverage gaps.

By closing the health insurance coverage gap, the North Carolina General Assembly can ensure that millions of rural North Carolinians have access to high quality care and increase the chances that rural hospitals (and the local economy) stay afloat. As Patrick Woodie, President of the NC Rural Center, says, “The health of our rural people and our rural economy depend on it.”