Reform of the ACA needs address the rural hospital closure crisis
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“If you want to watch a rural community die, kill its hospital.” Those portent words appeared last week in an article describing the rural hospital closure crisis in Georgia. Those words are true not just for rural towns in Georgia, but for rural communities across the nation. And, not one proposal to replace the Affordable Care Act (ACA), including the Graham-Cassidy proposal, does anything to address this health crisis or the other provisions in the ACA that are not working in rural America.  

The National Rural Health Association (NRHA) strongly supports the goals of the ACA, especially Medicaid expansion as well as the numerous patient protections afforded in the bill. However, NRHA has long fought for Congress to improve provisions in the ACA to address the great needs in rural America. The lack of plan competition in rural markets, exorbitant premiums, deductibles and co-pays, the co-op collapses, lack of Medicaid expansion by predominately rural states, and devastating Medicare cuts to rural providers – all collided to create a health care crisis in rural America.

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Unfortunately, many of the most rural and poor states in the nation have opted to not expand Medicaid, leaving millions of rural Americans unable to obtain coverage. Rural Americans still become sick and need care. As a result, bad debt of Medicaid (as well as Medicare) at rural hospitals is escalating, and 50 percent higher than urban hospitals. At the same time, reimbursement for bad debt has seen significant reductions. Because of this, rural hospital closures have escalated, leaving 63 percent of the closures occurring in states that have not expanded Medicaid. And, the future for rural hospitals is bleak - - one in three is in financial risk, and 25 percent of all rural hospitals will close in less than a decade if Congress doesn’t act.

While NRHA supports empowering states to make their own decisions on the health care needs of their population, NRHA does not support block granting Medicaid. Even though the majority of rural residents are in non-expansion states, a higher proportion of rural residents are covered by Medicaid (21 percent compared to 16 percent). Protecting this vulnerable patient population is especially important in light of research showing rural life expectancy rates are on the decline as a result of rising levels of chronic disease, the opioid epidemic, and rural access to care diminishing due to the hospital closure crisis.

Additionally, NRHA is concerned that in Graham-Cassidy, flaws in the ACA marketplace will remain. In 2017, 41 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). 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.

Any federal health care reform proposal must address the fact that insurance providers are withdrawing from rural markets. Despite record profit levels made in large part by tax-payer subsidized programs such as Medicare Advantage and Medicaid managed care, 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. In the same way that financial service institutions are required to provide services to underserved neighborhoods, profitable insurance companies should be spurred to provide services in underserved communities.

Rural Americans need accessible and affordable health insurance, and need access to their rural hospital. 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. It’s time to listen to rural America and stop the rural hospital closure crisis and make health care affordable.

Alan Morgan is CEO National Rural Health Association.