House health-care draft suggests a plan that could leave rural areas short of coverage

A 100-page draft of a House Republican plan to repeal the Patient Protection and Affordable Care Act suggests that rural, middle-class Americans may soon struggle to afford health insurance.

The document, which was leaked to Politico last week, specifies that Medicaid expansion for low-income, able-bodied adults won’t be completely eliminated, but eligibility and funding will be rolled back after 2020, Vann R. Newkirk II reports for The Atlantic.

“The draft also contains a provision changing federal funding for Medicaid in 2020 onward from an open-ended obligation to a system where the per-person spending every year is capped based on spending levels in 2019 and increased annually to correspond with medical inflation,” he writes.

Then-Gov. Steve Beshear expanded Medicaid under the law, to people with household income up to 138 percent of the federal poverty level, now $16,394 for an individual or $33,534 for a family of four. Now the state is having to pay 5 to 10 percent of the cost, and Gov. Matt Bevin says the state can’t afford it. He has asked for permission to change the program, but what Congress does with the program nationally would likely override action in Kentucky.

Rural residents, who rely more heavily on public insurance than do city-dwellers, are particularly vulnerable to Medicaid cuts. The health issues that are prevalent in rural areas are serious and contribute greatly to the climbing mortality among middle and lower class white Americans, he notes. “People like coal miners in Trump country in Kentucky and West Virginia are on the frontiers of several developing health crises, and per-capita spending caps on Medicaid would only further limit their states’ ability to respond,” Newkirk writes.

The draft plan by House Republicans repeals the tax-based individual mandate to have health insurance and replaces it with an incentive to maintain continuous coverage. This proposal would allow insurers to charge up to 30 percent more in premiums to people who go without coverage at any point for more than two months and who purchase insurance on individual, small group, or exchange markets, Newkirk says. The fee would also apply to young adults who don’t enroll in coverage as soon as they age out of their parents’ plans. In addition, the added surcharge would be paid as profits to insurers rather than being remitted as taxes to sustain the system, he writes.

Another reform set forth in the draft is a measure to replace the cost-sharing reductions and premium tax credit subsidies of the ACA’s exchanges with a refundable tax credit. The existing tax credit is adjusted by income, age, and the average price of insurance in a person’s market. The draft version of the tax credit would only take into account age, starting with $2,000 per year up to age 30 and capping at $4,000 for people over 60, Newkirk notes.

While older people who are likely to have more health problems would get more subsidy than “young invincibles,” Newkirk writes, the worry is that adequate medical care will be out of reach for lower-income people who are also more likely to have health problems. Geographical factors are also likely to become an issue for a tax credit based solely on age, since medical costs vary substantially from place to place.

A tax-credit plan that doesn’t account for the actual cost of a person’s health insurance might reasonably be expected to create areas where coverage is simply unaffordable, Newkirk notes. Research suggests that health-insurance premiums are higher for rural counties and states.

Newkirk writes, “Those costs increase even as rural residents have less access to basic health care and worse overall health status than their metropolitan peers. . . . The result of all these provisions would almost certainly be a system that benefits people who already have wealth and health and penalizes others, but there would also be very strong geographic effects. For one, pegging Medicaid spending to a base year would reduce states’ ability to ramp up health-care spending because of disasters or emerging health problems, and these problems already exert the most pressures on states and areas with infrastructure that is ill-equipped to combat them,” Newkirk writes.

Newkirk says that disparity between costs and access for rural Americans creates a conundrum for Republicans. “By reducing state Medicaid financial flexibility, reducing oversight over minimum insurance requirements, instilling continuous coverage requirements, and removing regional costs offsets, their Obamacare replacement would in essence put health insurance even further out of reach for sicker, rural patients who need it more and then penalize them for being left out,” he writes.

Many rural Americans already suffer the effects of “health care deserts” because of collapsing rural hospital systems and waning access to basic specialty services. In addition to those health care and service deserts in rural areas, Newkirk writes, Republicans would be contributing to newfound “coverage deserts.”

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