No time to rest! We face unprecedented changes, transitions, and opportunities in the world of rural healthcare, ranging from a new administration to new healthcare focuses regarding the Patient Protection and Affordable Care Act (PPACA).
While President Obama worked hard to bolster legacy support of his noble cause, the flagship legislation that is the PPACA, Republicans, who now control two of three branches of the federal government, are feverishly fleshing out the obstacles and opportunities to repeal and replace certain elements of it.
While the estimated budgetary effects of fully repealing the PPACA range wildly, many surveys have been circulated to take the pulse of consumers: 67 percent of respondents in one recent survey said that lowering the amount individuals pay for healthcare was a top priority. Only 37 percent said repealing the PPACA was a top priority, and according to the Kaiser Foundation, 75 percent of Americans don’t want Obamacare repealed without an alternative being put in place.
For rural America, a population estimated at more than 62 million the PPACA repeal risks include the following:
- Approximately 700 critical access hospitals could be put at risk of imminent closure due to continued cuts.
- The 1.7 million rural Americans who purchased health insurance on government exchanges in 2016 would be at greater risk of having no subsidies.
- It could put states and cash-strapped hospitals that received Medicaid expansion even more at risk because the financial assistance would be eliminated.
Threaded within the PPACA is also the 340B drug program that has designated 1,100 rural facilities for enhanced access to critical medications at a greatly reduced cost, or, in some cases no cost, for the neediest of patients requiring specialty care services. This program has represented an immense savings for patients and struggling healthcare providers. Drug companies supply providers with discounted medications, passed along to patients unable to afford expensive drugs, while making drugs available in community emergency departments and for labor/delivery. Additionally, the 340 B drug program has helped treat outpatients who qualified for Medicaid. It is imperative that everyone understand that 340B is not taxpayer-funded. The program is paid for by drug companies that can well afford it, particularly as medicine prices continue to skyrocket.
A passionate note to Congress, especially Republicans considering repealing the PPACA: it is essential that any changes in the healthcare law do not eliminate rural hospital eligibility in the 340B program. The savings from this program are imperative to ensuring that rural critical access hospitals are able to meet the access and delivery demands of their communities and patients in a very uncertain future.
Next up for discussion is the PPACA replacement plan called the “The American Health Care Reform Act of 2017.” This 184-page bill, introduced Wednesday, Jan. 4, contains some features that would increase access to health savings accounts, expand federal support for states to establish high-risk pools, and allow insurers to sell health plans across state lines. It also aims to create or concentrate on a more equitable playing field between those individuals who obtain their insurance from employers and those who purchase it individually by creating a standard tax deduction for health insurance.
This bill would:
- Fully repeal all aspects of the PPACA, effective Jan. 1, 2018. It is similar to House Speaker Paul Ryan’s replacement pitch.
- Focus heavily on HSAs (health savings accounts), which for rural healthcare could be a great opportunity to exercise more autonomy and accountability of healthcare choices and options – but it could also create more burden in a rural market where lower-income people might not be able to contribute to them or have access to them based on demographics.
- Allow individuals enrolled in Medicare or Tricare, or who obtain care from the Veterans Affairs or Indian Health Service, to use and contribute to HSAs. Additionally, it would expand what services can be purchased using HSA tax-exempt funds, and would increase the maximum contribution people can make toward their HSA to an amount equal to the annual limit of their out-of-pocket expenses.
- As it relates to the tax provision, excludes employer-sponsored health benefits from income and payroll taxes and instead creates a standard tax deduction for health insurance of $7,500 for individuals and $20,500 for family coverage. Currently, an estimated 155 million individuals receive their insurance through their respective employers, and it is highly likely that employer groups would aggressively push back on any legislation that would address “tax exclusion,” since it has allowed employers to sponsor insurance programs while reaping massive tax benefits.
- Give families flexibility to pick coverage that best fits their needs and ensure that the tax benefit for insurance doesn't go away if you lose or change jobs.
- Emphasize focus on expanding federal support, up to $25 billion over 10 years, to help states’ high-risk pools, which would provide coverage for people for preexisting conditions as long as they maintain continuous coverage. For rural providers, this might not be enough support, and to keep continuous coverage might be enormously difficult in economically depressed communities or communities offering fewer employment opportunities. Plus, if someone loses a job, the impact of proximity to another community with opportunity could come into effect.
- Cap premiums in those plans to 200 percent of the average premium in the state.
- Massively promote competition and allow insurers to sell policies across state lines. Although some believe this might undermine state regulations, leading to an unbalanced risk pool, for many, especially in rural markets, it would possibly drive costs down, which is much-needed since many co-ops that received billions of dollars closed, causing patients to be narrowed. This has occurred even more in insurance selections already dented by the narrow choices in rural markets and the mass exodus of many payors leaving.
- Promote some type of subsidy or tax credit for consumers, to help defray the cost of premiums. States would have more authority to set insurance standards, and the federal government would have less.
- Expand wellness programs.
- Reform medical liability law.
- Would many healthy people go without coverage and use the system only when ill?
- Would a full repeal dismantle the insurance market, leaving 30 million without insurance?
- Would uncompensated care really reach $1.1 trillion over a 10-year period?
A Few Thoughts
In one recent consumer and healthcare survey, 52-86 percent of respondents have stated that a PPACA repeal should not proceed without a replacement that provides affordable health insurance for all Americans who lack employer-based coverage.
Possible Best-Case Scenarios
- Keep the 340B drug program.
- Create affordability/accessibility via interstate marketplaces to increase competition/drive down costs.
- Decrease price/ increase program transparency to help make the healthcare system easier to understand.
- Provide more data availability to create awareness/increase quality care.
- Provide more state authority for spending/disbursement.
- Reduce Medicaid spending/create innovative solutions of care.
- Review Medicare for sustainability.
- Vouchers/medical savings plans
- Reducing or eliminating the insurance tax breaks creating consumer sticker shock.
Additionally, Rural Health Centers (RHCs), Federally Qualified Health Centers (FQHCs), and Accountable Care Organizations (ACOs) need to maximize every reimbursement, program, and incentive opportunity available to them to optimize patient outcomes, policies, population health, and revenues.
Finally, without cost controls the Republican plan cannot likely work as proposed since it still allows ACA insurers and drug companies to charge what they want. Dating back to Richard Nixon’s 1974 Health Care Reform Plan cost controls offered a more measured response and equity in healthcare.
Rural has faced death by 1,000 cuts, literally, in the last several years. Even with the PPACA, rural areas experienced hospital closings and great disparities, but it can’t afford to be decimated – it needs a rural revival!
The future unknowns will continue to be revealed and debated across political aisles and the dinner table.