A year ago, Dave Schumann, a farmer living just outside of Wellman, Iowa, a town of 1,400, noticed that his health insurance premiums had doubled. Schumann, age 58, was paying around $800 monthly to get coverage for himself and his wife.
The price surge—for two healthy adults—didn’t make sense to Schumann, so he enrolled in Samaritan Ministries International, a health cost sharing co-op that mimics the collectivist coverage of the Amish and Mennonite communities that populate this part of Iowa, the second biggest farming state in America (after California.)
Those communities—recognizable by their horse-and-buggy-travel, hand-sewn garments and simple, white farmhouse homes—also believe that the Church should take care of their healthcare. In 1965, Congress passed a law giving them the right to opt out of Social Security, Medicaid, and other governmental benefits. The Affordable Care Act was an extension of that.
Similarly, the Samaritan Ministries, a group of some 80,000 devout Christians across the country that’s based in neighboring Peoria, Illinois, share the burden of each other’s care. Peoples’ payments to each other are often accompanied by hand-written get-well notes. The one condition is that the insurance can’t be used for abortions or drug or alcohol-abuse-related problems.
Schumann pays $420 a month into the Samaritans’ collective pot, which is what he was paying before the ACA went into effect. He signed up for Samaritan Ministries just in time, too. In October, he confronted his own health problem: appendiceal cancer, a rare tumor that involves removing the appendix, and then, in Schumann’s case, washing out the surrounding tissue with a hot chemotherapy bath.
It was the start of harvesting season when Schumann’s symptoms came on: loss of appetite and intense cramping that made him regret crawling the grain bin one day. He went to the town nurse, who ordered him straight to the ER in the nearest city twenty minutes away, Iowa City. At the University Hospital there, Schumann would get the tests and treatment he needed—and all of it, for a total price that he thinks might near his cap of $280,000.
RURAL AMERICA AND THE ACA: FROM PROMISE TO DELIVERY
Schumann and others like him, who have found alternatives to the Affordable Care Act, represent only a fraction of rural Americans. Nearly 16 percent of the U.S. population, or 50 million people, live in rural areas, defined as those outside of Metropolitan Statistical Areas, or MSAs, according to the Kaiser Family Foundation. Rural Americans are more likely than their urban counterparts to be uninsured, and those that do have insurance are less likely to have it through their employers. There is also a higher percentage of rural Americans (18 versus 21 percent) on Medicaid.
This scenario made the ACA seem promising. According to the Health and Human Services web page targeted at rural Americans, “The law will address inequities in the availability of health care services, increase access to quality, affordable health coverage, invest in prevention and wellness, and give individuals and families more control over their health care.”
“Rural Americans experience higher rates of chronic disease, disability and mortality. But help is on the way,” it went on.
The reality, for many rural Americans, played out differently.
“Sadly, the private marketplace didn’t work in rural America,” said Maggie Elehwany, the vice-president of government affairs at the National Rural Health Association (NRHA). “The majority of rural counties had one or two options. There just wasn’t market competition.”
Taking a simple analogy, Elehwany compares buying health insurance on the exchanges to buying airline tickets: the more ticket options, the more affordable tickets become. But in states like Wyoming, she said, there was only one provider.
“It’s wonderful to give people an insurance card, but if they can’t afford to access healthcare, it means nothing,” Elehwany said. Schumann felt that pinch in Iowa. “The so-called affordable care did nothing for the guy paying the bills. It just jacked up the cost of insurance.”
Some of the surge in premiums—expected to rise again 22 percent in 2017, according to HHS—was caused by insurers redistributing risk to pay for their sickest, and previously uninsured, new customers. These financial losses have caused many insurance companies to pull out of certain states, and the ACA altogether.
That trend has hit rural America particularly hard. Seventy percent of the 650 counties with only one insurer on the exchange are in rural areas, according to the NHRA. Added to the dearth of insurers—and perhaps feeding into insurers’ flight—is that many of the rural states are also those that decided against Medicaid expansion. According to Kaiser, 65 percent of rural Americans live in one of the 24 states that did not expand Medicaid.
Those places, particularly in the deep South and Appalachia, Elehwany adds, have populations that are sicker, with chronic diseases such as stroke and diabetes that can be expensive to treat—and even more expensive if left untreated.
Molly Gamble, the editor in chief of Becker’s Hospital Review, says states ranked poorly for both the general health of their population and access to healthcare are a legitimate “cause for concern.” These states include Louisiana, Mississippi, Oklahoma, Georgia and Arkansas.
THE PLIGHT OF RURAL HOSPITALS
Another by-product of the ACA in rural America has been the closure of rural hospitals, Elehwany said, citing the closure of eightyhospitals since 2010. “It has been devastating to rural hospitals. At this rate of closure, we’re going to lose a quarter of all rural hospitals in less than ten years if Congress doesn’t do anything. One in three are at risk of closing.”
Of the eighty hospitals, Gamble adds, “The majority of these closures are in the South — Texas, Tennessee, Georgia, Alabama, Mississippi — each of these states had at least five closures. Texas had thirteen.”
Becker and Elehwany both say the loss of a hospital is also economic.
“When a hospital disappears, you lose 25 percent of the economy. Housing prices have even dropped in communities where hospitals have closed,” Elehwany says.
While the reasons for the closures are complicated and many pre-date the ACA, the regulatory measures attached to the ACA have made it hard if not impossible for rural hospitals to stay afloat.
Cuts to Medicare’s bad-debt program (whereby Medicare reimburses hospitals for debts their Medicare patients cannot pay), and sequestration, a two percent cut on Medicare payments, hit rural hospitals especially hard, she adds.
“Bad debt stems from a lot of things,” Gamble says, including the ACA’s 35 percent cut in reimbursable bad debt for Critical Access Hospitals—those with 25 or fewer beds, which are 35 miles or less from a tertiary institution. Furthermore, Gamble adds, in states that didn’t expand Medicaid, the uncompensated care costs for treating the uninsured drive bad debt; and patients with high deductible plans also run a risk to a hospital’s commercial debt.
But the people who really suffer when a rural hospital closes are its patients.
“A rural hospital closure isn’t so much a matter of convenience — it is a life or death affair,” Gamble said. “When someone experiences a heart attack or a complication with their pregnancy, the fact that the closest hospital is more than thirty miles away is a risk factor in itself.”
BENEFITS OF THE ACA IN RURAL AMERICA
Despite the shortcomings of the ACA in rural areas, many experts say that it did provide some positive change in the dim healthcare landscape of rural America. Robert Annas, the senior managing director of SOLIC Capital in New York City, a restructuring and investment banking firm that specializes in healthcare, says that for starters, the ACA added 20 million people to the insurance rolls throughout the U.S.
Annas pinpoints at least one area where the ACA helped rural America directly: allowing access to preventative care, namely through physicals. “When you don’t have an active engagement with care you often have patients present in the emergency room, [which is] the most expensive form of care.”
Sarah O’Leary, the founder of Exhale Health, a consumer health care advocacy, said the ACA provided three main benefits: mental healthcare; free contraception; and screening tests for breast and cervical cancer; as well as diabetes, cholesterol and high blood pressure—all “things that would make for a healthy America,” O’Leary says, “rather than dealing with things once they get into an acute circumstance.”
That’s particularly true in rural America, where chronic conditions are pervasive and uninsured people have traditionally resorted to the ER in the absence of regular checkups.
Scrapping all these benefits with the potential repeal of the ACA is daunting, O’Leary said.
“What people don’t realize about the ACA is that it wasn’t a marketplace. It was a 2,000-page document. It put in the prevention/protective element so that people would in theory be guaranteed access to affordable care,” O’Leary said, citing the inability of insurance companies to deny coverage based on pre-existing conditions and coverage of adult children under their parents’ plans as two main protective elements. Notably, however, rural America voted for Trump—three to one. And many of the votes came from places where people conceivably fell through the cracks of the ACA. According to Gallup poll data, six of the eight counties with increased premiums voted for Trump—namely in Pennsylvania, Wisconsin, Michigan, Florida and Pennsylvania: the states that sealed Trump’s victory.
Also, 19 percent of Trump voters in three of the demographic groups that Trump won—the African-American South, Evangelical hubs, and working class country—said there were times that they did not have money for necessary healthcare and medicine.
This scenario begs the question of whether people voted for Trump because they felt left out of the ACA.
“The confusion in what these people just did to themselves is mind-boggling,” O’Leary said, adding that Trump won states with the largest increases in ACA enrollment.
Whether or not rural Americans voting for Trump were
enrolled in the ACA or not, she continues, “the biggest fallacy is that the government makes money from the ACA. They don’t. It is not Obama, or the administration’s fault that premiums went up. It’s Congress’ inability to reign in insurance companies. They are the ones taking our checks.”
O’Leary, who recently moved to Texas, says that someone she met blamed Obama for the 46 percent rise in her premiums.
“I told her, ‘Listen, please don’t take this the wrong way, but the administration doesn’t get your check. Blue Cross/Blue Shield gets it,’” O’Leary said. “’Secondly, without the ACA, you’d be paying $55,000 a month for that drug rehab program.’”
Insurance companies are instead driving health expenses.
“Insurance companies are wildly profitable, and health care is the largest lobbying group in D.C. It’s bigger than the NRA (National Rifle Association) and defense. They spend hundreds of millions to bribe politicians to get them to do what they want them to do.”
Meanwhile, health consumer abuses are ubiquitous, O’Leary adds, citing billing fraud at 56 percent. In her consultancy, she advises people to be proactive and vigilant about their care and what it costs them.
“Question bills,” she said. “Wait until you get an EOB (explanation of benefits.) Wait to see what insurance will pay. Don’t say, ‘How will I pay it?’ Say, ‘Do I owe it?’”
REPEALING THE ACA IN RURAL AMERICA
Most experts say the repeal of the ACA under the Trump administration will take two or more years—so nothing is likely to happen overnight.
Still, the air is thick with long-range speculation.
“What might happen,” O’Leary said, “Is that the quality of care that we have access to could go down. We might lose access to preventative screenings and affordable medications.”
“Losing those preventative measures is the danger,” she added, citing the loss of the free annual wellness exam as especially worrisome because it will mean people will return to using the ER as their one-stop health visit.
“We’re talking about hundreds of thousands of people potentially dismissed, falling through the cracks again,” said Robin Lewy, director of programming at the Rural Women’s Health Project based in Gainesville, Florida.
As for the hospitals, “The repeal of the ACA in the plainest terms would be a detrimental event for rural hospitals and would place great emphasis and need on an adequate replacement,” Gamble said.
If Medicaid expansion were dismantled, states would be snapped back to pre-ACA baseline for uncompensated care, which would drive bad debt, she added.
Annas anticipates that the rate of rural hospital closure will increase—unless those institutions engage in creative solutions to keep going. Two possibilities are merger acquisition affiliation with larger hospitals; and using telemedicine to provide care remotely, he said.
Whatever the case, Annas added, in the next 18 to 24 months “we’ll be waiting with baited breath to see exactly what replacement means.”
In early January, Trump advisor Kellyanne Conway said no one would lose health coverage after the ACA is repealed. Trump has mentioned possibly holding onto certain features of the ACA, like the provision for adult children to stay on their parents’ coverage plans, as well as barring insurance companies from declining insurance to people with pre-existing conditions.
He’s also mentioned moving Medicaid to a block grant system, in which a lump sum from the federal government would be given to states, and the states would decide how to distribute it. The measure is designed to reduce federal spending on Medicaid in the long run.
“That reduction in federal spending on Medicaid means states would likely take on a greater portion of the cost of the program, which may result in states putting forth more of their own funding dollars or imposing greater restrictions on Medicaid eligibility and benefits or curbing payments to providers,” Gamble said. “They may do a combination of these things, none of which are positive developments for rural hospitals.”
Annas added that the block grant program would become “a political football.”
Another repeal initiative that Trump has mentioned is provider price transparency.
“In the long run, price transparency is the right thing for patients and our economy. We need that clarity,” Gamble said. “In the short-term, it’s going to be painful for healthcare organizations, especially those that already face staffing and financial challenges. It will fall on those rural providers to do the gritty, time-consuming and painstaking work of first figuring out their costs.”
Annas says one of the travesties of repeal is that the ACA has simply not had enough time to play out. The ACA was implemented only a few years ago. By comparison, Annas said, “Medicare started in the mid-sixties, and it took years for it to flesh out.”
Whatever the case, he said, “rural health care is going to be at the forefront of the conversation.”
Elehwany says the NRHA takes a non-partisan view. “We feel it’s imperative to explain to both Democrats and Republicans that a lot of concepts of the ACA fell short in rural America,” she says. “Our big push is not necessarily support or repeal of ACA. Just to say: Get rural America right.”