Obamacare (ACA) in Trump Country

Obamacare has dominated headlines since its enactment in 2010, and the controversies surrounding it seem to only keep growing. Health care, more specifically Obamacare, was a very important voting issue in the divisive 2016 election According to a PEW report, 74% of registered voters cited health care as a very important issue to them. But only 37% of registered voters thought Trump would do a better job of dealing with health care. Ironically, the states with the most people signing up for health insurance under Obamacare voted for Trump in the 2016 presidential election. These states included: Florida, with 1.3 million sign ups; Texas, with 776,000, North Carolina, with 369,077; Georgia, with 352,000; and Pennsylvania, with 290,950.

Rural America experienced the highest rates of coverage gains through Obamacare. The Urban Institute's Health Reform Monitoring Survey found that coverage for rural individuals between June 2013 and March 2015 increased by 7.2%. If Obamacare was so good for rural America, why did rural America support Trump in such overwhelming numbers when he promised to repeal it? Because as a previous post put it, rural America loves and hates Obamacare, and nobody actually believed he would do it.

Vox recently interviewed residents of a rural county in Southeastern Kentucky about their feelings towards Obamacare and Trump. Whitely County Kentucky, like many rural regions, overwhelming supported Trump; 82% voted for him. Whitley County has a median per capita income of $16,748, is 97% white, and 88% of the residents don't have a college degree. In the three years since the passing of Obamacare, the percentage of the population with insurance rose from 75% to 90%. Like other lower-income, less-educated white Americans, Whitley County benefitted disproportionately from Obamacare. However, these residents like many other Americans are unhappy with Obamacare because of the unaffordable premiums and deductibles. But Whitely County residents had a nearly uniform belief that Trump, as a business man, would not entirely repeal Obamacare and leave millions without health insurance. They believed Trump would instead come up with a more affordable alternative. They were frustrated with the current law and willing to take a gamble on a new law under a new administration.

Rural voters, like those in Whitley County, are right to be frustrated with Obamacare because it wasn’t tailored to help rural people and address their specific needs. Under Obamacare, health care is more integrated, moving away from fee-for-service and towards coordinated care and value-based models which link payment to patient outcomes. This new model created accountable care organizations (ACOs) that allow groups of hospitals and doctors to work together to provide coordinated care to patients while being paid through bundled payments. But this value-driven model doesn't translate well to rural areas. It requires a clinically integrated network, financial alignment and integration of providers, and team-based care delivery, which all require large investments of money, time, and human capital. The shift to value-based health care is more difficult in rural areas, because they often have scarce resources, limited providers, small populations, and greater potential exposure to financial losses from poor risk management. Rural areas require payment reform models tailored to the special circumstances of rural providers and health systems, which Obamacare isn't providing.

Rural health insurance marketplaces are also facing higher-than-expected costs because rural populations are much sicker than anyone expected. For example, patients enrolled in the West Virginia insurance exchanges were 88% more likely to have heart disease, 69% more likely to have high blood pressure, and 110% more likely to have kidney disease, compared to non-exchange patients. As discussed in a previous blog post rural Americans, especially women, are experiencing large increases in death rates. From 1990 to 2014, women's mortality rose in most parts of the U.S. but rural areas were some of the hardest hit. In 21 rural counties across the South and Midwest the mortality rate doubled, or worse, for middle-aged women.

Multiple factors are converging to produce this rise in mortality rates. First, the epidemic of heroin and opioid overdoses has been particularly devastating on rural areas. Heavy drinking is also a major issue in rural areas and the number of rural middle-aged white women dying from cirrhosis of the liver doubled since the end of the 20th century. The suicide rate also recently doubled for rural white women between the ages of 50 and 54. Finally, obesity is contributing to a myriad of health problems for rural women like liver disease, diabetes, heart attacks, and strokes. The Washington Post found that these high white mortality rates correlated to voting for Trump and that "in every state except Massachusetts, the counties with the highest rates of white mortality were the same counties that turned out to vote for Trump."

Rural counties are also experiencing disproportioantely higher rates of insurer drop outs compared to urban areas, which is contributing to rising health care costs. In 2016, the number of rural counties with only one insurer nearly quadrupled. In 2017, almost one third of rural counties will have only one insurer compared with 19.6 percent of urban counties. But rural areas have long struggled to attract insurers because of their small populations and low concentrations of hospitals and doctors, which make it hard to compete with urban areas. The marketplaces established under Obamacare were intended to solve this problem by creating a new online platform to more easily reach individuals. However, insurers are still dropping out of marketplaces around the country. Obamacare cannot be solely blamed for the lack of competition in these rural coverage regions, or rating areas.

Poorly drawn rating areas are contributing to rising health care costs in rural areas. Under Obamacare, states define their own rating areas which are used by insurers to set rates and premiums. The prices vary by rating area depending on how sick the population of the area is estimated to be and insurer competition. This rating can be problematic if only rural areas make up a rating area, because as discussed above rural areas are sicker than the general population. In 2014, a team of Stanford researchers found that if states combined rural areas with nearby urban areas in a single rating area that rural areas saw an average of 0.6 to 0.8 more insurers and significantly lower premiums. The bundling of rural and urban areas also led to an average decrease in annual benchmark premiums of between $200 and $300 in rural areas.

These issues with Obamacare and the resultant rising health care costs are problematic in rural areas, so it's understandable why these areas were so desperate for a chance to shake up the system. Nevertheless, I anticipate they will be sorely disappointed, especially if Obamacare is repealed without a replacement, and millions lose insurance coverage.