Monday, February 2, 2015

The health insurance gap is wider in the country.

Since the Affordable Care Act’s (ACA) implementation in 2013, there has been speculation that the Act would not support rural areas as well as it supported urban areas. Initial news reports noticed that the health insurance marketplace lacked competition in rural areas, and that rural residents were being charged higher premiums than their urban counterparts.

Wyoming’s insurance commissioner blamed much of the discrepancy on the health infrastructure in his state. All but a single Wyoming county is serviced by one hospital, and the lack of hospitals holds a virtual monopoly over those residents. The commissioner argued that there is little incentive for insurers to attempt to introduce themselves into a market with such entrenched competition.

Government agencies like the Health Resources and Services Administration (HRSA) immediately started collecting ideas to improve rural access to health care. But the problem was worse than initially speculated. Earlier this year, the Kaiser Family Foundation found that rural residents were less likely to have employer-provided health insurance than the rest of the population, and were more likely to need access to healthcare through programs that the ACA provides. However, rural residents were also more likely to be caught in something called the “coverage gap”: a position where someone makes too much money to qualify for Medicaid in their state, but too little money to qualify for the tax credits offered for having health insurance.

The New York Times just published an article about the coverage gap today, and the article details what people who are caught in the coverage gap are doing in order to be able to afford health care. Please read that article, and think about how this article relates to the rural American experience today. Rural residents are more likely to be stuck in that coverage gap than than the rest of the United States.

This problem is not entirely the ACA’s fault, but it is an issue that could have been addressed by the ACA. States were offered an extended Medicaid program that would have extended Medicaid coverage to state residents whose income did not exceed 138% of the federal poverty line. The coverage gap problem is caused by states who did not accept the extended Medicaid program, which limits Medicaid to those under the federal poverty line. The ACA does not extend tax credits to those between 100% and 138% of the federal poverty line, so those people are essentially “forgotten” by the legislation.

Although this issue is not limited to rural residents, it disproportionately impacts them for two major reasons. First, two-thirds of rural residents in the United States live in a state that has not expanded Medicaid. Second, rural residents are poorer on average and therefore more likely to fail into that gap than other residents.

It is a politics game. The federal government wants to encourage states to expand Medicaid. Offering financial aid to people who would be covered by the Medicaid expansion would not encourage states to expand Medicaid. States, on the other hand, are willing to gamble with people who are in the coverage gap as they fight over the future state of American health insurance.

This is an unfortunate position that is not likely to be solved by executive planning. State and federal legislators and executives need to come together to close this gap that hits rural America hardest.

A related post about choices in rural California is here.

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