Study: Rural America can’t wait for health care reform

If the current health care status quo is allowed to go unchecked, there will be “significant consequences” for rural residents, according to a new study by the Nebraska-based Center for Rural Affairs.

Creative Commons photo by denn via Flickr

Jon Bailey, director of the rural research and analysis program at the Center and author of the study, believes that existing health care policy, or lack of it, places rural people at a disadvantage that will worsen if steps are not taken by Congress. In looking at reform packages passed by both the U.S. House and Senate in terms of expansion of coverage, insurance reform, affordability and potential rebates, Bailey concluded that the benefits far outweigh the risks of inaction.

“None of these benefits will happen unless Congress adopts a final version of health care reform,” Bailey said. “If Congress fails to act, rural people, families and businesses will be stuck with a bad status quo. More uninsured and higher costs are facing many rural people — rural communities are at risk of a sicker population being served by a fragile delivery system if nothing is done. All of the unique rural challenges we have highlighted in this series of reports will only get worse with inaction.”

If current trends continue, by 2019:

• 25 percent of rural residents would be uninsured — and there would likely be even higher percentages in the country’s most remote areas.
• the cost of uncompensated care, often referred to as a “hidden tax” on the insured, would increase by 72 to 128 percent, and conservatively cost the average rural insured household up to $1,206 annually in premium costs solely for the health care costs for the uninsured.
• premiums for businesses will increase, making such businesses — especially small employers typically found in rural areas — less likely to offer health benefits to employees.
• individual and family spending, both on premiums and out-of-pocket expenses, will increase by 46 to 48 percent — a concerning figure for rural residents who already typically pay higher deductibles and often purchase their plans through individual insurance markets.

“Costs, under-insurance and lack of insurance are issues that hit rural people and families particularly hard and are issues which both the Senate and House bills begin to address,” Bailey said.

Under health care reform legislation residents of rural areas would begin erosion of the current uninsured gap between rural and urban areas, and elimination of barriers that have prevented many rural people from obtaining coverage, according to the study. In addition, families, businesses and individuals would see decreasing premium and out-of-pocket expenses related to health care.

“A typical rural family stands to be about $16,000 less at risk per year for all health care costs by 2016; families less exposed to the financial risk of health care costs as a result of health reform legislation have not only better coverage at less cost, but are at greater peace of mind, are more likely to be healthy, and will have the ability to divert those savings to other uses,” Bailey explained.

Perhaps the most significant of the benefits will come to small businesses, which Bailey describes as “the dominant economic driver of economies in many rural places.” These businesses will be able to use tax credit assistance provided in health care reform to reduce their insurance burden, and most will remain exempt from mandates present in both bills due to their size, according to the report.