Paul Says Hospitals May Close with Rise of Medicaid Recipients Under Affordable Care Act

May 29, 2014

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U.S. Sen. Rand Paul warns Kentuckians that the rapid expansion of Medicaid recipients in the Commonwealth through the Affordable Care Act may result in the closure of some hospitals.

The Republican made his comments at a press conference in Owensboro Wednesday.

“As Medicaid percentage rises for your hospital the danger is that your hospitals go bankrupt because Medicaid doesn’t pay as well as other insurances do,” he said. “So let’s say your hospital has 20 percent Medicaid and now it’s 30 percent Medicaid. You may say, ‘Well, I’m taking care of more people,’ but what if your hospital goes bankrupt and 100 good jobs at your hospital are lost?”

Paul says hospitals might also have problems getting payments from patients signing up for plans that aren’t eligible for Medicaid.

“Eighty-five percent of the people who have signed up have been Medicaid. The remaining 15 percent are essentially subsidized insurance,” Paul said. “They’re getting insurance with a $6,000 deductible. If you can’t buy your insurance, do you think you’re going to be able to hit a $6,000 deductible?”

He says those people will likely access health care services and then be unable to pay their share of the bill. The result, he says, is that hospitals will continue to get stuck with the cost of uncompensated care.