The Senate Health Care Reform Bill and Rural America
Erin Mahn Zumbrun
The National Rural Health Association is disappointed the Better Care Reconciliation Act of 2017, the recently released Senate version of the House passed American Health Care Act (AHCA), did not address NRHA's concerns with the AHCA nor shortcomings of the Affordable Care Act (ACA). Neither of the bills address the loss of access to care in rural America or include the three reforms that are needed to remedy the state of rural health in America.
It is critical you contact your Senators now and tell them to vote no on the Better Care bill. Tell your Senators that rural health care access and coverage can be dramatically and cost-effectively improved by making policy changes for Medicaid, Market Reform and rural hospital Bad Debt.
The Better Care bill does nothing to improve the health care crisis in rural America. Let's be clear – many provisions in the ACA failed rural America. The lack of plan competition in rural markets, exorbitant premiums, deductibles and co-pays, the co-op collapses, lack of Medicaid expansion, and devastating Medicare cuts to rural providers – all collided to create a health care crisis in rural America. However, it's beyond frustrating that an opportunity to fix these problems is squandered, and instead, a greater health care crisis will be created in rural America.
NRHA has also provided a look at how the Better Care bill would affect rural health care:
Rural Hospital Closure Crisis – Bill does not address rural hospital closure crisis that has already devastated far too many rural communities and is threatening the communities supported by the 673 rural hospitals vulnerable to closure. Expansion of insurance coverage is irrelevant if there is no one to provide care. Rural providers, operate at the narrowest of financial margins. The Better Care Reconciliation Act does not reverse the plethora of cuts to the Medicare program that have resulted in negative Medicare margins. Because rural Americans tend to be older, sicker, and poorer than their urban counterparts this has resulted in 7% gains in median profit margins for urban providers while rural providers have experienced a median loss of 6%. In fact, 41% of rural hospitals operate at a financial loss; at the current rate of rural hospital closures, 25% will close in less than a decade. Access to a health care provider remains the number one concern for rural populations, yet is not addressed with the Better Care Reconciliation Act.
Medicaid – The Better Care Reconciliation Act includes deep Medicaid cuts that change the program from an open-ended federal commitment to a capped federal payment that limits federal spending, leaving either states, patients, or providers to struggle with the loss of funds. While politicians from both parties talk about encouraging efficiency and focusing on value, states that have made these changes within their Medicaid program are rewarded by locking in lower reimbursement rates than states that have not made these positive changes.
Furthermore, the Medicaid expansion is being phased out over a four-year period from 2020 to 2024. Though most rural Americans do not live in states that have expanded Medicaid, Medicaid expansion has provided some buffer for rural hospitals, increasing mean operating margins from -0.18 percent in non-expansion states to 1.03 percent in expansion states.
Market Reform – The ACA exchanges in rural America generally lack competition, resulting in exorbitant premiums, deductibles, and co-pays. Unfortunately, the Better Care Reconciliation Act does nothing to address these problems. In 2017, Forty-one percent of rural marketplace enrollees have only a single option of insurer, representing 70 percent of counties that have only one option in the marketplace. The situation is much worse for 2018 with more insurance companies pulling out of the marketplace, leaving many rural counties without a single option. The Better Care Reconciliation Act will further exacerbate this problem by substantially reducing the Tax credits available to assist individuals in purchasing insurance, likely leading to many more individuals unable to afford health insurance or purchasing coverage with high deductibles and low coverage that in essence is the same as being without coverage.
Instead, the cost of the bill is mostly a result of the repeal of billions in taxes included in the Affordable Care Act (ACA) to pay for the coverage expansion.
Opioid epidemic – The Senate's version only provides $2 billion to states in 2018 for the opioid crisis. This is a huge difference from the $45 billion, 10-year funding that was in the House's AHCA. While the opioid crisis is seen across the country, rural is disproportionately impacted. The rate of overdose deaths in non-metro counties is 45% higher than in metro counties.