The writer is director of the Rural Public Policy Program at the Center for Rural Affairs in Lyons, Neb.
In many respects, Medicaid is the backbone of rural America’s health care delivery system. The most recent data available show a higher proportion of rural people enrolled in Medicaid than are urban residents.
Medicaid is particularly important for working people in rural areas where employer- provided health insurance is less common, where self-employment is more common and where poverty or below-poverty incomes that are insufficient to purchase health insurance are more prevalent.
Because of this real-life slice of rural existence, Dr. Timothy McBride of Washington University in St. Louis recently declared, “Not expanding Medicaid is a rural issue.” McBride is a health economist with the Rural Policy Research Institute’s Center for Rural Health Policy Analysis (a consortium including the University of Nebraska).
According to McBride, when researchers look at rural residents who could be covered by expanded Medicaid, more than half live in non-expansion states. By comparison, more than half of the urban residents eligible for coverage under the expansion live in expansion states.
In Nebraska, we are witnessing the health care coverage issues for working adults caused by these state choices. The Kaiser Commission on Medicaid and the Uninsured estimates that nearly 33,000 adult Nebraskans will fall into the “coverage gap” of earning too much to qualify for traditional Medicaid but not enough to qualify for health insurance marketplace premium tax credits.
Denial of needed health insurance coverage for our neighbors has occurred solely because of the choices some Nebraska politicians made during the 2013 session of the Legislature.
Because of a variety of economic circumstances, the “coverage gap” resulting from not expanding Medicaid has disproportionate and significant effects in rural Nebraska.
Our research shows that nearly 1 in 5 households with residents under 65 in legislative districts outside of Douglas, Lancaster and Sarpy Counties would potentially qualify for health insurance under the Medicaid expansion. That includes nearly one-quarter of non-elderly households in districts that include Norfolk, Grand Island, Kearney, Scottsbluff, O’Neill and McCook.
While Nebraska’s uninsured rate is lower than the national average, uninsured rates in eight rural counties of the state exceed 20 percent, significantly higher than the state and national averages. And rural uninsured rates in the state are generally higher than urban rates. These are the people being denied health insurance by our state’s decisions.
Failing to expand Medicaid not only harms these hardworking rural people and their families, it harms all of us.
The American Academy of Actuaries and the RAND Corp. found that non-group health insurance premiums will be higher in states that do not expand Medicaid, up to 10 percent higher in a study done by RAND in Texas, Louisiana and Florida, all non-expansion states. This appears to be the case in Nebraska, where recent data show that premiums for plans on the new marketplaces are higher than in Colorado and Iowa, two neighboring states that elected to expand Medicaid.
The consequences for the hardworking farm or ranch family or the small-business owner purchasing health insurance in the individual market are that state politicians helped increase your premiums by refusing to expand Medicaid.
Medicaid also provides economic stability for rural health care providers. This is most evident for rural hospitals. Many rural hospitals operate on the economic edge because of lower patient volume and the ever-growing financial challenges related to medical technology and providing necessary health care services.
Adding to these challenges and obligations faced by hospitals is the specter of increasing uncompensated care — services rendered to patients, generally uninsured, who do not or cannot pay. It is estimated that over the next five years, Nebraska health care providers will provide $1.06 billion in uncompensated care. This is a hidden tax shifted to all Nebraskans with health insurance and Nebraska businesses that provide health insurance.
These challenges — combined with funding changes in the Affordable Care Act, based on the assumption that states would expand Medicaid programs — are resulting in rural hospital closures, staffing cuts and service reductions in other states that opted not to expand Medicaid. Nothing immunizes Nebraska’s rural hospitals from these actions. The one step we can take to assist our rural hospitals is to expand Medicaid, which would reduce uncompensated care by nearly 40 percent.
In the 2014 session of the Legislature, it is time to put people ahead of politics. We can expand Medicaid as proposed by the bipartisan Legislative Bill 577 and provide 54,000 working Nebraskans the health insurance they need.
Medicaid expansion is the morally correct choice, the fiscally correct choice and the economically correct choice for rural Nebraska.