With the first-in-the nation caucuses this winter, prominent national Democrats like Bernie Sanders, Kamala Harris, and Elizabeth Warren have continued to endorse extreme ideas and socialism. Not to be outdone by presidential candidate’s far-left health care proposals, Iowa House Democrats introduced legislation last session that would force Iowans into a socialist-style, government-run health care system that would eliminate private health insurance (House File 96). There are countless dangerous consequences to this entire Iowa House Democrat bill, but this newsletter will highlight the impact to Iowa hospitals, most of which are located in rural communities.
Recently a report was released by Navigant studying the impact of a variety of proposals to create a government-run insurance plan to compete with private health insurance companies. This analysis found that between 25 and 52 of Iowa’s 90 rural hospitals would be at high financial risk for closure if a government-run insurance plan entered the market. The study found that there would be losses of millions in revenue if current Medicare rates replaced current higher commercial rates to hospitals.
This report only analyzed three scenarios, all of which still allowed individuals to purchase from commercial insurance or remain on their employer-sponsored plan. The Iowa House Democrat proposal would not allow any of those choices, making the impact to Iowa’s rural hospitals even more devastating on all rural communities.
Just look at data from the Iowa Hospital Association. “More than 60 percent of hospital revenue is derived from government health insurance payments through Medicaid and Medicare”, and these “payment rates fall far short of covering the actual cost of care and do not keep up with rates of inflation.”
Iowa’s hospitals already are currently struggling due to lower government reimbursement rates in the Medicare and Medicaid programs. The following data is collected from Iowa’s hospitals and shows the number of hospitals below certain total revenue margins in 2017.
- Below 4% = 14 Iowa hospitals
- Below 2% = 19 Iowa hospitals
- Below 0% = 26 Iowa hospitals
- Below negative 5% = 3 Iowa hospitals
- Below negative 10% = 6 Iowa hospitals
With the majority of those unsustainable revenues coming from Iowa’s Critical Access Hospitals who already experience higher Medicare and Medicaid patient stays, it is easy to see how only allowing government insurance will lead to rural hospital closures.
Rather than proposing radical and dangerous health care plans, Iowa House Republicans this year funded an increase to Iowa’s Critical Access Hospitals in Medicaid. All Iowa House Democrats voted against this funding.
This “free” health care plan proposed by House Democrats is unaffordable and would lead to massively higher taxes on Iowa families and business. Not only that, but banning private health insurance leads to insurance and health care job losses in the thousands, takes away choice and access, and rations care.