3 Fixes Needed in any Modification to the ACA
The House Rules Committee approved along party lines an amendment to the American Health Care Act that would set up a federal insurance pool for patients with serious or pre-existing conditions to lower premiums for healthier patients.
NRHA is concerned that the bill still falls woefully short in making health care affordable and accessible to rural Americans. The AHCA will cause more harm to rural Americans, leaving millions of the sickest, most underserved populations in our nation without coverage, and further escalating the rural hospital closure crisis. Let’s be clear -many provisions in the Affordable Care Act 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 the problem is instead destined to create a greater health care crisis in rural America.
Rural health care access and coverage can be dramatically and cost-effectively improved. The three fixes that must be included in any modification to the Affordable Care Act are:
1. Medicaid - Though most rural residents are in non-expansion states, a higher proportion of rural residents are covered by Medicaid (21% vs. 16%).
• Any federal health care reform proposal must protect access to care in Rural America, and must provide an option to a state to receive an enhanced reimbursement included in a matching rate or a per capita cap, specifically targeted to create stability among rural providers to maintain access to care for rural communities. Enhancements must be equivalent to the cost of providing care for rural safety net providers, a safeguard that ensures the enhanced reimbursement is provided to the safety net provider to allow for continued access to care. Rural safety net providers include, but not limited to, Critical Access Hospitals, Rural Prospective Payment Hospitals, Rural Health Clinics, Indian Health Service providers, and individual rural providers.
2. Market Reform – Forty-one percent of rural marketplace enrollees have only a single option of insurer, representing 70 percent of counties that have only one option. This lack of competition in the marketplace means higher premiums. Rural residents average per month cost exceeds urban ($569.34 for small town rural vs. $415.85 for metropolitan).
• Any federal health care reform proposal must address the fact that insurance providers are withdrawing from rural markets. Despite record profit levels, insurance companies are permitted to cherry pick profitable markets for participation and are currently not obliged to provide service to markets with less advantageous risk pools. Demographic realities of the rural population make the market less profitable, and thus less desirable for an insurance company with no incentive to take on such exposure. In the same way that financial service institutions are required to provide services to underserved neighborhoods, profitable insurance companies should be required to provide services in underserved communities.
3. Stop Bad Debt Cuts to Rural Hospitals – Rural hospitals serve more Medicare patients (46% rural vs. 40.9% urban), thus across the board Medicare cuts do not have across the board impacts. The fact that according to MedPAC “Average Medicare margins are negative, and under current law they are expected to decline in 2016” has led to 7% gains in median profit margins for urban providers while rural providers have experienced a median loss of 6%.
• Congress must stop bad debt cuts to rural hospitals