Rural Americans, hospitals disproportionately hurt by ACHA, Center on Budget and Policy Priorities analysis finds
Medicaid expansion was associated with a 4 percentage point increase in operating margins for rural hospitals.
There's little doubt that the American Health Care Act, passed by the House this month, would raise the number of uninsured Americans, but a new analysis from the Center on Budget and Policy Priorities found that rural Americans, and the hospitals that serve them, would be hit especially hard.
This is due in large part to the radical restructuring of Medicaid that would take place. The Republican-backed bill would, of course, effectively end the Affordable Care Act's expansion of Medicaid -- which enabled nearly. 1.7 million rural Americans to gain healthcare coverage. In at least eight states that expanded Medicaid -- Alaska, Arkansas, Iowa, Kentucky, Montana, New Hampshire, New Mexico and West Virginia -- more than one-third of expansion enrollees live in rural areas.
But rural areas have also benefitted from the ACA's premium tax credits and cost-sharing subsidies. The House bill features substantially smaller tax credits and virtually eliminates any help with deductibles and copayments.
[Also: Insurance exchange shoppers in rural areas face few options, higher premiums study shows]
More than 1.6 million enrollees -- about one in five marketplace enrollees in the 39 states that use HealthCare.gov -- live in rural areas, according to the analysis. In 12 of the 15 states in which consumers would face the steepest average increases in total out-of-pocket spending under the AHCA, rural residents make up at least one-quarter of marketplace enrollees.
Additionally, many rural residents could face prohibitive premiums and out-of-pocket spending because the House plan eliminates nationwide protections that enable people with pre-existing conditions to get the coverage and services they need, allowing states to waive these protections.
Rural hospitals themselves would also be disproportionately affected. The ACA's coverage expansions have substantially reduced those hospital's uncompensated care costs; as a share of hospital operating budgets, they fell by about half between 2013 and 2015 in expansion states.
Rural hospitals in expansion states have had larger gains in Medicaid revenue than urban hospitals, the study found, and were more likely to turn a profit. Medicaid expansion was associated with a 4 percentage point increase in operating margins for rural hospitals. Expansion boosted operating margins for urban hospitals as well, but only by about 1 percent.
[Also: Physicians in rural areas, low-cost cities score higher salaries, report shows]
States themselves would see a hit as well. If the AHCA were passed by the Senate as is, beginning in 2020 states would receive only the regular federal Medicaid matching rate -- 57 percent, on average -- for any new enrollees under the expansion instead of the permanent expansion matching rate of 90 percent. This would force states to pay 2.8 to 5 times more than under current law for each new enrollee.
The CBPP also found that the bill's new tax credit for the purchase of individual market coverage would be inadequate for many who live in rural settings. Unlike the ACA's flexible tax credit, the House bill's credit's wouldn't adjust for geographic variation in premiums, and would provide scant assistance for older Americans. These deficiencies would leave many of the 1.6 million rural marketplace enrollees unable to afford their high insurance premiums.
The House bill's flat tax credits vary only by age. Older people could get a credit twice as large as younger people, but the bill also allows insurers to charge them premiums that are five times higher than what they'd charge younger people, again based solely on age. Collectively, the study said, these factors would increase net premiums for many people, and disproportionately hurt rural consumers.
[Also: CMS seeks rural hospitals' participation in Medicare inpatient demonstration]
Moreover, repealing the ACA's cost-sharing subsidies would result in greater out-of-pocket costs for many people. Without these subsidies, the report said, the national average marketplace deductibles would increase by about $2,800 for single people with incomes below $18,000, by about $2,300 for single people with incomes between $18,000 and $24,000, and by about $600 for single people with incomes between $24,000 and $30,000.
The study also criticized the removal of protections for people with pre-existing conditions to get affordable coverage. Charging people the full cost of their pre-existing conditions could mean annual surcharges of $140,510 for people with metastatic cancer, $17,060 for pregnant women, and $8,370 for those with a history of depression, according to the Center for American Progress.
Twitter: @JELagasse
