Brief: Rural Areas Hit Hard by Senate Health Plan

The U.S. Senate’s health care bill would be devastating to rural Arkansas – not just to the health of its citizens but to its economy, as well. Research on the House-passed Affordable Care Act (ACA) replacement showed that it could result in 42 percent of Arkansas Medicaid enrollees younger than 65 being dropped from coverage. The Senate bill goes further, calling for even steeper cuts to Medicaid. It would effectively end Arkansas Works, the state’s Medicaid expansion program for adults with low incomes. These cuts would hit rural Arkansas the hardest because of the large number of children, older adults, and families who rely on the program to provide a consistent, affordable source of coverage. Medicaid makes up 64% of federal funds to Arkansas, much of which flows into rural areas. The bill threatens to undermine the many positive impacts that the Affordable Care Act has had in rural communities, including:

  1. In Arkansas, 61 percent of children in rural areas have Medicaid-funded health coverage. The program provides them critical access to life-saving treatment and the preventive care they need to thrive and become healthy, productive adults. Cuts to Medicaid would reduce the financial stability of rural families and decrease their ability to get much-needed care for their children.
  2. Arkansas Works expanded coverage to more than 300,000 Arkansans, almost half living in rural areas. The Senate bill would effectively end Arkansas Works by phasing out the federal funding available for the expansion population. Nationally, Medicaid expansion has caused a greater increase in coverage in rural areas than in urban areas. In fact, Arkansas ranks 8th in the nation for the decline in the uninsured rate among adults in small towns and rural areas.
  3. Arkansas Works has saved our rural hospitals. Families with health care coverage have fewer emergency room visits, and hospitals have reductions in uncompensated care. Rural hospitals’ uncompensated care costs in Medicaid expansion states plummeted by 43 percent compared to 16 percent in states that did not expand Medicaid, because Medicaid covered more of their patients.
  4. The ACA put in place important consumer protections that help rural communities. Under the ACA, health plans on the individual marketplace are required to cover key services, known as Essential Health Benefits, such as mental health treatment, prescription drug coverage, and maternity care. These services were often excluded before the passage of the ACA, and the Senate bill would allow states to waive these protections. Rural populations tend to be older and sicker than urban populations, so they could be disproportionately harmed by any changes to this essential coverage.
  5. The ACA has helped keep coverage affordable and accessible for rural families, especially because residents in rural areas tend to be older and to have lower incomes. The Senate bill would allow insurance companies to offer skimpier plans with much higher out-of-pocket costs. Insurers would be allowed to charge the elderly five times as much as someone who is younger. The bill also reduces the premium tax credits and repeals subsidies that help make health care affordable for low-income people.

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