Rural hospitals optimistic about new tax law - WSIL-TV 3 Southern Illinois

Rural hospitals optimistic about new tax law

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PARIS, IL -- How will the new tax law impact rural hospitals?

Like a lot of issues trapped in the partisan echo chamber these days, it depends on who you ask.

But to understand the consequences, or benefits, the law presents to rural hospitals, it's important to understand their challenges.

According to the National Rural Health Association, one in three rural hospitals is in danger of closing.

That's in large part because patients at rural hospitals tend to be older, sicker and poorer than their urban counterparts.

For hospitals that operate independently, outside of a regional system, the situation is even more dire. 

"It's difficult for any hospital or medical practice to operate on a small scale and that's really the situation many rural hospitals and rural medical practices find themselves in," said Dr. Edward Rico, an endocrinologist at Paris Community Hospital in Paris, Illinois.

Opponents of the tax law, including the AARP, said it will hurt for two reasons: It repeals the individual mandate under Obamacare, meaning 13 million people could lose their coverage; and the expected increase to the national debt could trigger automatic cuts, including $25 billion to Medicare, which rural hospitals depend on for reimbursements.

"We remain deeply concerned by the negative effect the Tax Cuts and Jobs Act will have on the nation's ability to fund critical priorities," said Jo Ann C. Jenkins, the CEO of the AARP.

But supporters of the law said health care will be more affordable, with lower premiums.

They also said Congress can always stop those automatic cuts to Medicare from happening, if necessary.

Rural hospital officials, including those at Ferrell Hospital in Eldorado, say because their medical suppliers will pay lower taxes, it should lead to more affordable costs for them and everyone else. 

Rico agrees.

"We would expect the cost of operations to decrease as well and I think potentially that's good news for patients and insurers," said Rico. 

Yet despite their optimism about the new tax law, rural hospitals say they still face a lot of challenges the new law doesn't address, including a doctor shortage.

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