Voters in the 2018 midterm, especially in rural America, offered a ringing endorsement of Medicaid and a desire to protect, preserve, and improve the ACA. In December a Texas judge struck down the entirety of the Affordable Care Act, leading to heightened uncertainty in the health sector and American economy. The judge’s decision, which is under appeal, stands in stark contrast to the wave of support for Medicaid and the ACA in the midterm elections. Yes, broad challenges remain, but bipartisan collaboration can deliver solutions that bolster access to primary and specialty care, improve care for the chronically ill, and reduce long-term budget challenges.
Rural Support For Medicaid
Hundreds of thousands of Americans voted to expand Medicaid in Idaho, Nebraska, and Utah. In Kansas and Maine, voters elected new Governors who have pledged to expand Medicaid. These latest efforts will increase by a half-million the 27 million Americans already served by Medicaid. Further, 95 percent of all children will have access to health insurance and medical care through a combination of Medicaid and the Childhood Health Insurance Program (CHIP). “Elections have consequences,” as President Obama said in 2009, and the consequences are especially beneficial for kids this year.
Why such strong support for Medicaid? It’s the first line of health defense for rural Americans, who are much more likely to receive medical care from Medicaid than their urban counterparts. The program covers up to a quarter of rural citizens and helps sustain rural economies.
Medicaid is also a lifeline for struggling rural hospitals. More than 5 percent of those hospitals have closed since 2010, and many more face economic challenges. In combination with Medicare coverage for the disabled, Medicaid is vital for the “dual eligibles”, Medicare beneficiaries who also qualify for Medicaid, and are the sickest of the sick among our citizens. While this group amounts to only 21 percent of all Medicaid recipients, it accounts for 35 percent of Medicaid spending. Moreover, one-third of all dual eligible beneficiaries live in rural areas.
Even before election night, sparsely populated expansion states experienced a decline in their share of uninsured from 35 percent to 16 percent. These latest expansion efforts will help stabilize rural hospitals and communities.
Wide-Ranging Rural Benefits
There are other benefits. Medicaid pays for 51 percent of all rural births. It also subsidizes 6 out of 10 nursing home care residents, a burden which will grow as our population ages. Medicaid covers special education, including speech and occupational therapy. Medicaid also covers home care – a benefit not eligible in the Medicare program. These types of care, which most Americans cannot afford on their own, deliver long-term benefits.
Medicaid expansion is also important for veterans and military families. 3.4 million vets and family members receive health insurance through Medicaid. In addition to TRICARE coverage for 200,000 active-duty military families, other expenses are paid for by Medicaid.
Storm Clouds Ahead
Despite the good news, some big challenges for Medicaid loom.
Chief among them is mental health care, a major issue in rural areas. Consider the shocking statistics about teen suicides and opioid addiction, including a 40-year high in teen suicides. In the United States, among 10- to 24-year olds, suicide accounts for more than 17 percent of all deaths— surpassing cancer, heart disease, stroke, diabetes, congenital abnormalities, influenza, or lower respiratory disease combined. Depression is the leading cause of disability worldwide. And the incidence of mental disorders has grown. Illicit drug use by kids ages 12 to 17 is on the rise, surpassing usage rates of people over the age of 18 by 10 to 25 percent.
Medicaid is the primary source of funding for mental health and substance abuse services in the United States. Access to medical addiction treatment is essential, and states must make it easier to get help. Medicaid is a bulwark for addressing the national crisis in opioid and substance abuse. In West Virginia and Alaska, the states most ravaged by the scourge of mounting opioid deaths, Medicaid pays for a major component of the costs associated with medication-assisted treatment for substance abuse. Equally, states should embrace criminal justice reform and treat – not incarcerate – low-risk offenders.
The other storm cloud for Medicaid recipients is the push by some states to impose work requirements for eligibility. Unfortunately, the case proponents make for these requirements is not based on sound data. Eight out of ten non-disabled adults live in families where at least one member works and 60 percent work themselves. Of those not working, more than one-third report illness or temporary disability as the reason. Another thirty percent cite caregiving obligations for children or parents as the impediment to work.
There are very few healthy non-working Medicaid beneficiaries. It is also unlikely these requirements newly motivate them to seek employment. Ironically, work requirements can make it harder to find a job. For instance, in Ohio where the incoming governor is opposed to Medicaid expansion and favors a work requirement, three-quarters of Medicaid recipients say Medicaid makes it easier for them to find work. Meanwhile, more than half of Medicaid beneficiaries say Medicaid makes it easier to keep their jobs.
Work requirements are particularly problematic for rural Medicaid recipients. Rural areas face higher levels of unemployment. In the most economically distressed areas, recipients confront even greater employment hurdles due to lower education attainment, and overall declines in business formation. Rural residents are older and poorer than their urban counterparts (9.8 percent vs. 6.8 percent are in lowest income level), and more likely to be disabled (17.7 percent compared to 11.8 percent). Rural residents also have much less affordable access to transportation to job locations.
Work requirements adversely affect people with mental health conditions, because it is they who have the hardest time securing and keeping a job.
States must still keep a close eye on payment levels for physician and other medical service providers. If current rates result in denying access to communities – rural and urban alike – then improving access by expanding the pool of Medicaid providers can improve public health and reduce economic anxiety. Even though Medicaid recipients are generally satisfied with the quality of their care, rural states must act aggressively to recruit and retain doctors. States with rural populations know that they offer less provider choice, fewer hospitals and longer travel time to their citizens. Today, about half of rural hospitals lack any meaningful obstetrical care, and 75 percent of rural areas face a doctor shortage. States that spend to fix these safety net gaps will be offering more than health care. They will be offering hope to struggling rural communities.
Finally, states should experiment with new payment reforms to confront the access problems patients face from high drug prices. This is particularly a problem in rural areas due to less competition and limited access to reduced prices under the 340B program. Medicaid waiver authority could be leveraged to address the problem of prescription drugs in two ways. They can follow the lead of West Virginia (and the innovative work done by 46brooklyn), addressing the problem of “spread” pricing by PBMs. This model has shown substantial savings. For example, Michigan secured approval for a set of imaginative ways to pay for medicines based on value and quality. States can also work with Congress to increase the penalties on drug firms that raise prices above any justifiable level by increasing the rebate penalty owed to states.
The recent lower court ruling on the ACA puts all of the coverage gains from the law at risk. When asked by Republican opponents of the Affordable Care Act to strike down all of the ACA, the judge did so on the basis of finding one strand of its fabric unconstitutional. In refusing to sever the alleged offending provision from the whole, he ignores decades of well-established law instructing judges to carve out parts of laws from the rest unless Congress explicitly instructed that the presence of a defective part must lead to the elimination of the complete statutory scheme.
In this case, there was no such expression of congressional intent. Here, the very same Congress that removed the individual mandate penalty — but not its infrastructure — refused to “repeal and replace” the rest of the ACA. This lower court ruling will hopefully be overturned. In the meantime, the states should improve Medicaid as a valuable, important, and popular program.
Rural support for Medicaid should come as no surprise. People know access to health care makes a big difference in their lives. In spite of the ACA ruling, state Medicaid programs can – and must – be a beacon of hope for millions by offering more and better medical services.