In the wake of the November mid-term election, more states will be expanding Medicaid, the government’s largest health insurance program, and rural Americans are poised to be big beneficiaries, researchers say. The federal government and states jointly fund Medicaid and states administer the program under federal guidelines.
Over the past five years, 31 states and the District of Columbia expanded Medicaid under the Affordable Care Act, which was signed into law in 2010 and whose main provisions went into effect in 2013. Medicaid expansion has resulted in a dramatic reduction in the rate of uninsured low-income adults in rural and small-town America, according to a joint report released in September by Georgetown University’s Center for Children and Families and the University of North Carolina’s NC Rural Health Research Program.
In the report, “Health Insurance Coverage in Small Towns and Rural America: The Role of Medicaid Expansion,” researchers focused on 46 states with significant rural populations and examined uninsured rates for low-income citizen adults in 2008/09 and 2015/16. They found that, on average, the uninsured rate in rural areas and small towns in the first wave of 22 states that expanded Medicaid dropped from 35 percent to 16 percent. In non-expansion states, the uninsured rate in rural and small-town America declined from 38 percent to 32 percent.
“The report shows that it is going to be impossible for a state to really make a sizable dent in the high uninsured rates in rural areas unless they expand Medicaid,” says Joan Alker, a co-author of the report and the executive director of the Center for Children and Families.
Voters agreed at the polls last month. Idaho, Nebraska and Utah passed ballot measures to extend Medicaid to a greater number of low-income adults. That was a turnaround from 2016, when President Donald Trump easily carried the three states in the presidential election with a platform that included repealing the Affordable Care Act.
“Expanding access to health care isn’t a blue-state value or a red-state value; it’s an American value,” said Jonathan Schleifer, executive director of The Fairness Project, a nonprofit that financed the three Medicaid ballot initiatives.
Prior to the Affordable Care Act, Medicaid covered low-income children, pregnant women, disabled individuals and some poor parents and excluded all other low-income adults. The law allowed states to expand Medicaid to all Americans earning up to 138 percent of the federal poverty level. That amounts to $28,676 for a family of three in 2018.
But in states that have not expanded Medicaid, the old rules apply and “income eligibility even for parents is pretty limited,” says Rachel Garfield, a senior researcher at the Kaiser Family Foundation, a nonprofit that analyzes health policy. “The median income limit is about 40 percent of poverty, or about $9,000 a year for a family of three in 2018,” says Garfield. Parents making more than that do not qualify.
State lawmakers, often Republican, have cited the potential drain on state budgets as the biggest reason for their opposition to Medicaid expansion.
The federal government has been paying the bulk of the cost of Medicaid expansion: 100 percent for 2014 through 2016, 95 percent in 2017 and 94 percent this year. The federal government’s share will continue to decline until it reaches 90 percent for 2020 and beyond. States pay the balance.
Medicaid currently insures 66.7 million low-income Americans, 12 million of whom were added through Medicaid expansion, says Megan Olsen, a senior manager for policy at Avalere, a consulting firm in Washington. Once Idaho, Nebraska and Utah formalize their plans and join the 31 states that have already expanded Medicaid, an additional 325,000 people could be enrolled in 2019, according to Avalere.
Hundreds of thousands more low-income people will be eligible when Medicaid expansion becomes effective in Maine and Virginia next year. Maine’s governor-elect, a Democrat, has promised to implement a ballot initiative that voters passed in 2017 but that the outgoing Republican governor blocked. Virginia’s legislature passed an expansion law this year and enrollment starts in January.
That leaves 14 states that, to date, have no plans to expand Medicaid, although in Kansas, the incoming governor, a Democrat, supports expansion. Of those, South Dakota, Georgia, Oklahoma, Florida, Texas, Alabama, Missouri and Mississippi had the highest rate of uninsured low-income adults in rural areas and small towns in 2015/16, according to Alker and colleagues, ranging from 47 percent in South Dakota to 35 percent in Mississippi. In nearly all 14 states, the uninsured rate for low-income adults in rural areas and small towns was higher than the rate in metropolitan areas.
There are two primary reasons for that gap, says Alker. “Rural areas tend to have higher poverty rates than metropolitan areas and in some cases higher rates of disability. And both of those things… are associated with higher rates of not having coverage,” she says. “In addition, the kinds of employment that folks in rural areas and small towns can get, oftentimes, particularly low-wage workers, tends to be in agricultural sectors and sectors that typically don’t offer health coverage with the job.”
In the 22 states that expanded Medicaid coverage during the study period, the gap between uninsured rates in rural and metropolitan areas narrowed significantly or disappeared, according to the research report.
The impact of Medicaid expansion on health care providers, particularly hospitals, was just as dramatic, says Alker.
“There is lots of evidence to show that Medicaid expansion helped to reduce bad debt and uncompensated care for hospitals, and this is very important for rural communities,” she says. “If you look at a map where rural hospitals have closed since the Affordable Care Act was enacted, a lot more hospitals have closed in non-expansion states.”
Community health centers, whose patients are predominantly low income and disproportionately uninsured, have also benefited from Medicaid expansion, according to a study published in the June issue of the journal Health Affairs. After two years of Medicaid expansion, the centers experienced an 11 percent drop in their share of uninsured patients and a 13 percent increase in Medicaid patients. And centers in rural areas experienced increases in quality measures, such as asthma treatment and hypertension control. They also saw higher rates of mammograms and visits for treatment abuse.
“Medicaid has become a key pillar for the health care system nationwide, and nowhere is that more true than in rural areas and in small towns,” says Alker.