Yesterday, the Center for Rural Affairs released a new report that examines the differences between rural and urban states regarding the decision of whether or not they would expand the Medicaid program as provided for in the Affordable Care Act.

“Whatever the reasons, more rural states appear to be less likely to expand Medicaid. Meaning that a significant number of low-income, working rural residents are left in a ‘coverage gap,’ earning too much to qualify for Medicaid but not enough to qualify for health insurance marketplace premium tax credits,” said Jon Bailey, Director of Rural Policy at the Center for Rural Affairs and author of the report.

“In non-expansion states, rural health care provider networks, a safety net for the uninsured, will be stretched, possibly to the breaking point. Rural communities may be left without crucial pieces of the health care foundation, all rural residents may be left without institutions to attend to their health care needs, and small towns may be denied jobs and economic activity.”  Jon Bailey, Center for Rural Affairs

“Medicaid is at the center of the Affordable Care Act’s primary mission. Namely, to provide near universal health care coverage,” Bailey explained. “The law extends Medicaid eligibility to nearly everyone under age 65, earning up to 138 percent of the 2013 federal poverty income level – $15,856, or $32,499 for a family of four.”

To view or download a full copy of the report, go to http://files.cfra.org/pdf/medicaid-expansion-a-rural-issue.pdf.

According to the Congressional Budget Office, an estimated 16 million people, mostly adults, would gain Medicaid coverage as a result of the expansion provision. Based upon current Medicaid enrollment, that equals about 8.8 million rural residents across the nation.

“The expansion of Medicaid is particularly important for working people in rural areas where employer-provided health insurance is less common, where self-employment is more common, and where poverty or below poverty incomes that are insufficient to purchase health insurance are more prevalent,” added Bailey.

However, nearly 1.8 million rural and small city residents fall into the “coverage gap” in the 24 non-expansion states for which data is available. This represents about four percent of the total rural and small city population in those states, a figure similar to the number of people nationally informed they had non-compliant Affordable Care Act policies in the individual health insurance market, said Bailey.

“Regrettably, while there has been virtual 24/7 media coverage of individuals dealing with non-compliant policies, the millions of Americans, rural and urban, falling into the “Medicaid gap” have become a relative afterthought,” Bailey continued. “These working families deserve better than this.

Bailey’s report explains that, as a result of the U.S. Supreme Court ruling on June 28, 2012, each state had the option on whether to expand their Medicaid program to include the new eligibility provisions of the Affordable Care Act. Most state legislatures, as a result, spent considerable time during their 2012 and 2013 sessions debating whether to expand Medicaid in their state. The most current actions show that state decisions are almost split evenly – 26 states (and the District of Columbia) moving forward with Medicaid expansion and 25 states not (or with a legislative decision pending).
 
Other key findings include:

  • Rural states were less likely to expand Medicaid. States with the highest percentage of rural and small city population were less likely to expand Medicaid.
  • Urban states were more likely to expand Medicaid. Of the 10 states with the lowest percentage of their population living in rural areas, eight expanded Medicaid.
  • State decisions not to expand Medicaid create a “coverage gap.” People who earn too much to qualify for Medicaid but not enough to qualify for health insurance marketplace premium tax credits end up in the gap.
  • Nearly 1.8 million rural and small city residents fall into the “coverage gap.” Or, about four percent of the rural and small city population in the 24 non-expansion states for which data is available, similar to the number of people nationally informed they had non-compliant ACA policies in the individual health insurance market. This represents about four percent of the total rural and small city population in those states, a figure similar to the number of people nationally informed they had non-compliant Affordable Care Act policies in the individual health insurance market.

“Failing to expand Medicaid will push a significant number of rural people in a health care “coverage gap,” leaving them without health insurance or options for health care coverage,” continued Bailey. “Ultimately, driving people in the ‘coverage gap’ will result in worse health outcomes and less healthy people as medical issues and conditions go untreated in early, less expensive stages.”

Finally, the rural health care provider network, often a safety net for the uninsured, will be stretched, possibly to the breaking point, in non-expansion states. Rural communities may be left without critical pieces of the health care foundation, all rural residents may be left without institutions to attend to their health care needs, and rural communities may be denied jobs and economic activity, concluded Bailey.