Rural Americans Need Affordable Health Care

Featured in the November issue of our magazine.

BY JESSICA SEIGEL, NRHA Government Affairs Communications Coordinator

Rural Americans need affordable insurance plans and access to
providers in their communities, but far too many residents struggle
to receive critical care because of costly insurance and a dearth of
care options.

The laudable goals of the Affordable Care Act (ACA) were not
fully achieved in rural areas. We’ve seen a growing crisis in rural
America that includes a lack of plan competition in rural markets;
exorbitant premiums, deductibles and co-pays; co-op collapses;
devastating Medicare cuts; and nonexistent Medicaid expansion.
As cuts have forced more and more rural hospitals to close, even
those who can afford care through their insurance are losing access
to options in their communities.

A recent TransUnion study found a significant increase in the number
of patients unable to pay their hospital bills. The study revealed 68
percent of patients with bills of $500 or less did not pay off the full
balance during 2016 – up from 53 percent in 2015 and 49 percent in
2014. The author explained the issue’s predominant culprit: higher
deductibles. Unaffordable plans mean more unpaid bills, known as
bad debt for providers. Rural hospital bad debt has increased by 50
percent since 2010, an increase not seen by urban providers.

The ACA included cuts to programs that help hospitals with
unpaid bills and charity care, since Medicaid expansion and
increased insurance coverage would reduce this burden. However,
many rural states have not expanded Medicaid. Medicare bad debt
cuts now equate to more than $1 billion in lost revenue for rural
hospitals – a small number for federal budgets, but losses that push
rural hospitals from vulnerability to closure. Reversing these cuts
costs the government little and keeps care in rural communities.

In 2017, 40 percent of rural hospitals operated at a financial
loss. This year that number rose to 44 percent. It has risen every
year since the ACA went into effect. Eighty-seven rural hospitals
have closed since 2010, and another closure has already been
announced. As more rural hospitals close, local, affordable care for
patients disappears.

As hospitals close their doors, options for insurance also vanish.
Rural Americans are on average older, sicker and poorer than urban
populations, making the individual market more challenging for
insurers. Today, 41 percent of rural marketplace enrollees have a
single option for insurance, representing 70 percent of counties
with only one option.

Insurance companies can cherry pick profitable markets for
participation and are not obliged to provide service to markets with
less advantageous risk pools. The demographic realities of rural
populations mean rural Americans have greater health care needs,
making the market less profitable and thus less desirable for an
insurance company with no incentive to assume the risk.

Fixing this is simple. In the same way financial service institutions
are required to provide services to underserved neighborhoods,
profitable insurance companies could be required to provide
services in underserved communities.

While the situation remains difficult for rural patients and
providers, these communities have shown resilience in the face of
adversity. With action, easy reforms exist at the state and national
levels that can remedy these policies and ensure a strong, healthy
future for all rural Americans.