Rural hospitals are facing financial uncertainties as rising insurance premiums and potential increases in uncompensated care loom on the horizon. Edgerton Hospital’s CEO, Marc Augsburger, recently discussed these challenges and the current state of rural healthcare.
The Wisconsin Hospital Association’s annual report shows that hospitals in Wisconsin achieved improved operating margins in 2024 following a period of instability that saw the closure of some rural hospitals. Despite this, the outlook remains challenging.
Subsidies under the Affordable Care Act are set to expire, potentially increasing premiums unless lawmakers act to extend them. Additionally, the One Big, Beautiful Bill Act, signed into law by President Donald Trump, includes $900 billion in Medicaid and Children’s Health Insurance cuts, with $137 billion less federal Medicaid spending anticipated in rural areas as per a KFF analysis.
However, the act also provides $50 billion for rural health initiatives. Wisconsin’s Department of Health Services has applied for $1 billion to enhance rural healthcare in areas like workforce, technology, and care coordination, as noted in a recent release.
Augsburger joined WPR’s “Wisconsin Today” to discuss how these changes might impact hospitals like Edgerton. “We’re very excited that things have stabilized a bit,” he said, referencing improved Medicare and Medicaid payment consistency.
As a Critical Access Hospital, Edgerton is reimbursed at 101% of costs by Medicare but faces challenges due to sequestration, which reduces actual reimbursement to 99%. This shortfall affects their ability to purchase new equipment, relying on commercial insurance to cover gaps.
Rising insurance costs could lead to more patients becoming uninsured or underinsured, affecting hospitals financially. Augsburger noted the importance of finding sustainable payment plans for uninsured patients to mitigate uncompensated care, which rose by nearly 30% in 2024 according to the report.
Despite staffing challenges in rural areas, Edgerton has managed to fill most positions but faces difficulties for roles like nursing and lab technicians. Augsburger emphasized the need to support education for healthcare careers to maintain staffing levels.
