The Senate has delayed a vote until after the July 4th recess on the Better Care Reconciliation Act of 2017 (BCRA), the Senate version of the health care reform bill passed by the House. The National Rural Health Association urges the Senate to vote no on the BCRA.
The Senate had an opportunity to fix the great inequities in the ACA for rural America, but instead has offered a plan that will lead to more uninsured, greater health disparities and ultimately poorer health outcomes for rural populations nationwide. Additionally, the Better Care Reconciliation Act will be the death sentence for many rural hospitals across the country.
Rural hospitals are already facing a closure crisis – nearly 80 rural hospitals have closed since 2010; 673 additional facilities are vulnerable and could close; and 41% of rural hospitals operating at a loss. The hospital closure crisis will explode under the Senate bill for two reasons:
1. Drastic Medicaid Cuts. Rural Americans are often poor and more dependent on Medicaid. According to new data released by the non-partisan The Chartis Group, in the first year alone, if the Senate bill were enacted into law, the average loss per rural hospital in an expansion state is $442,000 and $224,000 per rural hospital in a non-expansion state. These margins are significant to small rural providers and cuts of this magnitude will result in rural hospital closures and the loss of 33,980 jobs in rural communities (Chartis).
2. Subsidy Reductions. Rural Americans currently can’t afford their insurance under the ACA. Rural Americans are more likely to have higher deductible plans, higher co-pays, and higher premiums than their urban counterparts. When a rural patient can’t pay their bill, the rural hospital is forced to absorb the non-payment - - bad debt has already increased for rural hospitals by 50% since the ACA went into effect, and has, in large part, created the rural hospital closure crisis. Instead of helping rural hospitals with their rising bad debt, the Senate bill makes the problem much worse. Because the Senate bill moves the subsidy benchmark down from 70% to 58%, the deductible will become even more significant. According to Vox, a plan that covers only 58% of costs amounts to about a $7000 or more deductible! This means health care will become even more unaffordable for rural patients and rural hospitals will be forced to absorb even greater losses. This will absolutely cripple rural hospitals and will explode the closure crisis.
NRHA implores the Senate to fight to protect rural patients’ access to care. It is critical that you contact your senators and tell them to vote no on the Better Care bill. At minimum, three amendments are critical for rural patients and providers:
Amendment 1 - Medicaid – Though most rural residents are in non-expansion states, a higher proportion of rural residents are covered by Medicaid (21% vs. 16%).
Congress and the states have long recognized that rural is different and thus requires different programs to succeed. Rural payment programs for hospitals and providers are not ‘bonus’ payments, but rather alternative, cost-effective and targeted payment formulas that maintain access to care for millions of rural patients and financial stability for thousands of rural providers across the country. Any federal health care reform must protect a state’s ability to protect its rural safety net providers. The federal government must not abdicate its moral, legal, and financial responsibilities to rural, Medicaid eligible populations by ensuring access to care.
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.
Amendment 2 - Market Reform – In 2017, 41% of rural marketplace enrollees have only a single option of insurer, representing 70% 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).1 Based on what we already know, the situation is far worse for 2018 with many counties having no insurers in the marketplace and dramatically increased premiums.
Rural Americans are more likely to have obesity, diabetes, cancer, and traumatic injury; they are more likely to participate in high risk health behaviors including smoking, poor diet, physical inactivity, and substance abuse. Rural Americans are more likely to be uninsured or underinsured and less likely to receive employer sponsored health insurance. Rural communities have fewer health care providers for insurers to contract with to provide an adequate network to serve the community.
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.
Amendment 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. A goal of the ACA was to have hospital bad debt decrease significantly.
However, because of unaffordable health plans in rural areas, rural patients still cannot afford health care. Bad debt among rural hospitals has increased 50% since the ACA was passed. 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%.
If Congress does not act, all the decades of efforts to protect rural patients’ access to care, could rapidly be undone. The National Rural Health Association implores Congress to act now to protect rural health care across the nation.
1 For 2015 ACA ‘Silver’ exchange plans.