Republican Proposal to Repeal ACA and Cut Medicaid Would Harm Rural Towns

Republican Proposal to Repeal ACA and Cut Medicaid Would Harm Rural Towns

Republicans will inflict serious harm on small town and rural America if the American Health Care Act (AHCA) passes with its massive $834 billion cut to Medicaid and decimates the Affordable Care Act’s individual market. Medicaid covers 1 in 4 rural adults and it is the primary source of health insurance for rural children. Coverage gains in small towns and rural areas have outpaced gains in cities. AHCA threatens to undermine all of this.

AHCA Makes Insurance Unaffordable
The individual market plays an important role in rural communities: farmers and ranchers are twice as likely as other workers to get their insurance on the ACA’s individual market. Although health insurance costs more in rural areas, AHCA only provides for “flat tax credits.” A rich person with a low premium will get the same help as a poor person with a high premium. The impact of AHCA’s flat credits is dramatic. In 12 of the 15 states where consumers would face the highest out-of-pocket expenses, rural residents make up at least one-quarter of marketplace enrollees. Older residents with lower incomes disproportionately reside in rural areas, making them particularly vulnerable to the AHCA’s age tax.

Take, for example, a 40 year old living in rural La Paz County, Arizona, making $30,000 a year. Under the ACA, she pays up to 8 percent of her income for insurance, as will her counterpart in Los Angeles County, California. Under AHCA, that same woman in La Paz County will see her premiums skyrocket to an unaffordable 26 percent of her income; 300 miles west in Los Angeles, her counterpart’s premiums will drop to two percent of her income. Without rhyme or reason, rural residents will be asked to shoulder a dramatically bigger burden of paying for their health care.

AHCA Harms Rural Hospitals
Rural hospitals operate on a much slimmer profit margin than urban hospitals and are more reliant on public payers. Medicaid expansion breathed new life into them. Medicaid expansion increased rural hospital operating margins by 4 percent compared to an increase of less than 1 percent in urban hospitals. Even though 95 percent of rural hospitals are in Republican congressional districts, Republicans are working behind closed doors to effectively eliminate Medicaid expansion and escalate the “rural hospital closure crisis.”

AHCA Threatens the Economic Health of Rural Communities
Rural residents rely on a functioning health care system for employment: more than 14 percent of total employment in rural areas is in the health care sector. The rural hospitals at risk from AHCA generate revenues of $70 billion per year, and employ 750,000 people. In one study reviewing selected rural hospital closures between 2010 and 2014, experts concluded that for every hospital that closed, nearly 100 jobs are lost.

Furthermore, Medicaid expansion plays an important role in rural economies where seasonal work is prevalent, reducing the number of uninsured migrant and seasonal workers.

AHCA will harm the economic security and health and well-being of many individuals living in rural communities and small towns in this country. With so much at stake for so many, it is time to take action: Call your senators and urge them to vote against AHCA.

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