March 22, 2017

AHCA Provides Bleak Outlook for Rural Sustainability

By

The American Health Care Act (AHCA), which was introduced to Congress on March 7 as a repeal and replacement of the Patient Protection and Affordable Care Act (PPACA), narrowly passed the House Budget Committee in a 19-17 vote last Thursday, March 16, sending it to the House Rules Committee. Today, House Republicans are scheduled to vote on the AHCA.

While the Freedom Caucus opposed the ACHA because it would subsidize healthcare costs for low-income individuals via tax credits, leaving the vulnerable even more at risk, some Republicans are concerned that totally rescinding Medicaid expansion could create widespread financial impacts to those states and populations that the AHCA doesn't adequately protect. These are the people who gained coverage through the expansion of Medicaid under the PPACA. Still, some supporters note that repealing the PPACA is the only way to move forward, and replacing it with the AHCA allows a pathway for patient-centered healthcare reforms to finally take place. They also believe that it will allow consumers to seek the health insurance they both want and need at an affordable price.

Voices on the Hill

Still, lacking broad support, those on Capitol Hill have received an overwhelming number of calls and visits from an array of associations, lobbyists, and constituents during recent weeks. Republican town halls have been crowded with voices seeking clarity and voicing adamant disdain. To appease more conservative voices, House Speaker Paul Ryan (R-Wisc.) will likely introduce some new amendments over the next week, while the bill is before the Rules Committee. Likewise, the Freedom Caucus is expected to introduce an amendment repealing the entirety of the PPACA. Added to the mix, if all 40 members of the Freedom Caucus and all the Democrats vote against the bill, the AHCA would not pass the House.

Rural Front

Back down from the Hill and closer to home, rural and underserved communities and populations have found that what has been introduced thus far is anything but helpful to the sustainability of rural life, health, and prosperity. Irrespective of the Congressional Budget Office (CBO) scoring, the numbers aren’t good as it pertains to the number of growing uninsured, coupled with the deteriorating rural hospital margins. For the rural population, campaign promises to repeal the PPACA won’t help them if they don’t have access to healthcare at all.

In the wake of increased insurance prices, estimated from 35 to 116 percent in the PPACA, many voters wanted to repeal it in hope for better pricing (especially over state lines). These same voters wanted real solutions to address Medicare and Medicaid, but due to partisan politics, some of those appealing promises weren’t outlined in the bill, due to the “reconciliation” focus.

While the PPACA provisions didn’t go far enough to protect and preserve rural healthcare, and with healthcare in general having a disproportionate impact on rural Americans, the forecast of the CBO for 24 million without insurance by 2026 would create rural medical deserts, decimating the core concept of “rural” across the nation.

Rural populations have been adamant that a crisis is occurring, and there is no room for error or for going backward. Thus far, the AHCA does nothing to address rural hospital closures. Nearly half of all rural hospitals are currently operating at a financial deficit; hospitals are already getting paid less from Medicare; nearly 80 hospitals have closed within the last couple of years; Hospitals providing care for 11.7 million Americans are at risk of closing; a total of 137,000 community jobs could be potentially lost; 99,000 healthcare jobs are in jeopardy now; and $277 billion in GDP is at risk of being lost within the next 10 years.

Lack of Association Support

Many organizations, including the American Hospital Association (AHA), the Catholic Health Association (CHA), the Association of Medical Colleges (AMC), the Children’s Hospital Association (CHA), the Federation of American Hospitals (FAHA), America’s Essential Colleges (AEC) and the National Association of Psychiatric Health Systems (NAPHS), already wrote Congress on March 8, noting they couldn’t support the ACHA as written.

Reconciliation versus Filibuster: What is Missing/Yet to Be Determined

What is all-important for rural healthcare, and that which is not mentioned in the larger conversation, are the following:

• Will the proposed $10 billion allocation over the next five years include safety-net hospitals in rural America?
• What will happen to the 340B drug program and drug pricing for rural America?
• What happened to behavioral health and funding to address the opioid epidemic?
• Will the precision medicine initiative be expanded?
• What is likely to happen with public health funding for community programs, public health initiatives, and the Centers for Disease Control and Prevention (CDC)?
• Where will community assessments be receiving funding?
• What is the likelihood of purchasing insurance over state lines and increasing competition and options?
• What will be the outcome of price controls on pharmaceuticals and insurance?

What is Known in the AHCA

• The AHCA would restructure the $552 billion federal funding per-capita cap, opposed to the current open-ended federal entitlement. States would receive capped payments on how many people can be enrolled in Medicaid. There would also be more frequent testing of Medicaid enrollees. This proposed reform would leave current Medicaid beneficiaries without coverage and decrease hospital funding to appropriately treat the most vulnerable – the disabled, elderly, and pediatric patients.
• The AHCA would eliminate the PPACA’s individual mandate requiring adults to enroll in health insurance. The bill also would eliminate the tax penalty adults would face if they didn’t have insurance coverage, but the concept of monetary penalties still would exist in some form. For example: to encourage consumers to buy insurance, the AHCA would let insurers charge a 30-percent penalty for individuals who then let their health plans lapse and try to buy a different/new policy.
• The AHCA restructures America’s tax credits to buy health insurance. This means that refundable age-based and income-capped tax credits would replace the PPACA subsidies. Credits would increase with age: the annual sum would be $2,000 for those under 30 and $4,000 for those over 60. With a growing number of Medicare beneficiaries in rural areas, many on fixed incomes, this would almost force many more into Medicaid, which as noted, would offer fewer options.
• The AHCA would eliminate the cap on tax exemption for employer-sponsored insurance.
• Coverage for preexisting conditions and allowing coverage for adults to maintain coverage through their parents’ health plans through the age of 26 is contained in the AHCA.
• The ACHA would delay the effective date for the PPACA’s “Cadillac tax” on costly health plans from 2020 to 2025.
• It would eliminate federal family planning grants and federal Medicaid funds for Planned Parenthood clinics.

The bottom line is that substantial changes need to take place – but these aren’t the ones that would close the disparity divide. In additional to the aforementioned, it also doesn’t help the rural workforce of practitioners, especially those in primary care as well as specialists. It makes it more difficult to apply innovative, value-based principles in a compromised delivery and access system.

This only would add to the disparity divide for millions more who call rural areas the best places to live and work. Call it an uphill battle, a showdown, a knock-down fight, but rural populations traditionally have endured and been both resilient, innovative, and collaborative – but now, the stakes are getting higher and higher.

Sen. Tom Cotton (R-Ark.) perhaps said it best: “Let’s get it right; don’t get it fast.”

Janelle Ali-Dinar, PhD

Janelle Ali-Dinar, PhD is a rural healthcare expert and advocate with more than 15 years of healthcare executive experience in many key areas addressing critical access hospitals (CAHs), rural health clinics (RHCs), physicians, and patients. Dr. Ali-Dinar is a sought-after speaker on Capitol Hill. A former hospital CEO and regional rural strategy executive, Janelle is also a past National Rural Health Association rural fellow, Rural Congress member, and Nebraska Rural Health Association president. She is currently the Nebraska DHHS chair of The Office of Minority Health Statewide Council, addressing needs of rural, public, minority, tribal, and refugee health, and she serves on the Regional Health Equity Region VII council as co-chair of Rural Health and Partnerships. Janelle holds a master’s degree and doctorate in communications and is a recent graduate in public health leadership. Janelle is currently the vice president of rural health for MyGenetx and is a member of the RACmonitor editorial board.  

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