Rural Iowans could be disproportionately hurt compared with their urban counterparts under the Republican-backed health care plan to replace the Affordable Care Act, according to an analysis out Tuesday by the Center on Budget and Policy Priorities.
The American Health Care Act — which the House passed earlier in May and now is being reworked by the Senate — effectively would end the Medicaid expansion, restructure the Medicaid program through a per capita cap, and replace the ACA’s tax credit and cost-sharing protections with age-based tax credits.
The bill has yet to be scored by the Congressional Budget Office, which will determine the cost of the bill and the number of individuals affected.
Those living in rural areas saw large gains in insurance coverage through the Medicaid expansion while rural hospitals saw significant drops in charity care, said the nonpartisan Washington, D.C.- based Center on Budget and Policy Priorities.
The uninsured rate among rural, non-elderly individuals fell by nearly one-third between 2013 and 2015, from 17 percent to 12 percent, according to a Kaiser Family Foundation analysis.
Those drops were more significant in states that expanded Medicaid, such as Iowa, which granted coverage to an additional 150,000 people through the Iowa Health and Wellness program.
According to the report, the uninsured rate fell 43 percent, from 16 percent to 9 percent, in expansion states. That’s compared to 21 percent in non-expansion states, which saw rates fall from 19 percent to 15 percent.
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Of the 11 million to gain coverage through the Medicaid expansion, about 1.7 million individuals live in a rural area, said Jesse Cross-Call, one of the report’s authors, during a Tuesday conference call with reporters.
In eight states, including Iowa, more than one third of expansion enrollees live in rural areas. About 44 percent of Iowa’s expansion enrollees live in rural areas, according to the report.
This increase in the insured rate has lead to more financially healthy rural hospitals, the report’s authors said Tuesday. Small, rural hospitals often have razor-thin profit margins but coverage expansion has helped reduce charity care costs and strengthen their bottom lines — again, this is especially true in states that expanded Medicaid.
The majority of the 78 rural hospitals that have closed since 2010 are in southern states that haven’t expanded Medicaid.
In Iowa, charity care at non-urban hospitals fell significantly, from $74 million in 2011 to $40 million in 2015, according to data provided by the Iowa Hospital Association.
But rollback of the Medicaid expansion isn’t the only factor likely to hurt Iowa’s rural residents.
The bill would convert the Medicaid program to a per capita cap — the federal government would pay a certain dollar figure for each Medicaid member and states would be responsible for costs in excess of the per capita cap.
Overall, these changes would cut federal Medicaid spending by $839 billion over 10 years — a 24 percent cut by 2026 — and cut Medicaid enrollment by 14 million people by 2026, the Congressional Budget Office estimates.
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Rural populations are generally older and sicker than those living in urban areas and therefore rely more heavily on Medicaid and Medicare.
For the 1.6 million rural Americans purchasing subsidy-eligible insurance through the exchange, the American Health Care Act’s new tax credit would be inadequate, said Tara Straw, another of the report’s authors. Health premiums in rural areas can be more expensive as there are fewer insurance options.
Under the ACA, tax credits are adjusted for geographic variations in premiums, which is not the case under the Republican plan.
In Iowa, 46 percent of the 51,000 people purchasing insurance through the exchange live in rural areas. The average ACA credit under the ACA was $5,710 in Iowa but would drop 47 percent to about $3,024 under the AHCA, according to the report.
For a 60-year-old enrollee with an income of $22,000 living in Iowa, premiums could rise by more than $8,000, from $1,183 under the ACA to more than $9,600 under the AHCA.
“Iowa’s rural communities already face a lot of challenges, and policymakers in Washington shouldn’t make life harder for rural residents,” said Anne Discher, interim executive director of the Child and Family Policy Center, in a news release. “That means our senators should reject any bill that does any of the following — takes coverage away from people, ends Medicaid expansion, caps or cuts the Medicaid program, makes insurance coverage more unaffordable or takes away protections for people with pre-existing conditions.”
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