Medicaid Expansion is Driving Hospital Capacity to the Brink

As I scrolled through Twitter Monday morning, a news headline caught my attention: “Southern Colorado Hospitals Reach ICU Bed Capacity As COVID Hospitalizations Continue To Rise.”

Indeed, from New York to New Mexico, the ability of hospitals to house additional COVID-19 patients across the country is a major concern.

Unfortunately, this is less a feature of the COVID-19 pandemic, and more a symptom of hospital bed capacity that has diminished quietly over the past two decades.

According to data from the American Hospital Association, the number of hospital beds per thousand persons fell by more than 16 percent between 2000 and 2017. Some states have seen double-digit declines in bed space over the past five years alone. This problem was brewing long before the virus hit U.S. soil.

However, some states have weathered the crisis better than others. States entering into this pandemic with greater hospital bed capacity have had an advantage.

Contrary to popular myth, states that expanded Medicaid under Obamacare have been faced with greater constraints on hospital and ICU beds, while non-expansion states have been better equipped to confront the pandemic with more capacity and better resources.

How did we get to this point? Medicaid expansion provided welfare to able-bodied adults in states that chose to adopt it, but because Medicaid reimburses medical providers at far lower rates compared to private insurers — and in many cases below the actual cost of care — hospitals in these states have seen their resources dwindle as they take on more patients at lower rates.

It’s no surprise that, since Medicaid expansion was adopted, hospitals’ collective Medicaid shortfalls have skyrocketed by $5 billion, or more than 50 percent.

These unfortunate financial realities have forced many expansion states’ hospitals to close their doors completely. Others were unable to invest in additional capacity, contributing to the decline in bed space.

The proof is in the data.

Since 2013, the number of hospital beds per capita has declined by more than six percent in Medicaid Expansion states — while the number of beds has increased in non-expansion states.

Today, non-expansion states have 510 more beds per capita than their expansion counterparts. And it’s not just beds — states that have resisted Obamacare’s Medicaid Expansion have 35 percent more hospitals per capita compared to expansion states.

We’re seeing this unfortunate reality play out in real time. According to data from the Department of Health and Human Services (HHS), the only states with more than 90 percent of their staffed adult ICU beds occupied — New Mexico, Rhode Island and North Dakota — have one thing in common: They all expanded Medicaid under Obamacare.

These otherwise unrelated states — with unique regions, demographics, economies, populations and health characteristics — are bonded together by the same decision to expand Medicaid, which has manifested itself in reduced bed capacity for COVID-19 patients.

The Medicaid expansion state of Colorado — the focus of the news headline — went into this national health crisis with less than half of the bed capacity of bordering Wyoming, a non-expansion state.

According to the HHS data, Colorado presently has nearly 70 percent of its staffed ICU beds occupied, while Wyoming has roughly half of its beds occupied — the second lowest level in the nation. Had Colorado chosen to follow Wyoming’s lead and resist the adoption of Medicaid expansion under Obamacare, the situation would have been far different.

As policymakers gear up for the start of legislative sessions, there’s an important lesson in this analysis: Don’t fall for the myth that Medicaid expansion is a cure-all, especially for hospitals.

Rejecting Obamacare’s expansion is a commonsense step states can take to avoid the harsh reality they could otherwise be forced to reckon with.