The inclusion of a public health insurance plan in health care reform legislation as an option for individuals, families, and businesses promises to be one of the most controversial and crucial decisions made by Congress. With the myriad health care challenges facing rural people and rural communities, the decision on whether to include a public health insurance plan option has significant consequences for rural America. In fact, rural America has much to gain or lose from the public health insurance plan decision.
Why Rural America Needs a Public Health Insurance Option is the latest installment of our series of papers examining rural issues in health care reform. It examines why a public health insurance plan option is needed for rural America.
Some of the key points and findings in the report are:
- The cost of health insurance is crushing the self-employed and microbusinesses that form the bulk of the rural economy. Nearly three-quarters of the rural uninsured own or work in small businesses, and cost/affordability is by far the most cited reason for being uninsured.
- The availability of affordable and quality health insurance is the primary barrier to entrepreneurship – the most effective rural development strategy – reaching its potential for rural people and rural communities.
- Most drafts of proposed health care reform bills in Congress contain individual and business mandates to carry or provide health insurance; such mandates – if they depend on the current health insurance system that does not work well for many rural people as the only health insurance option – are unlikely to address unique rural challenges.
- Rural people and rural areas suffer from economic concentration, consolidation, and a lack of choice in many economic areas, including health insurance. Research has shown that 94 percent of statewide health insurance markets meet the U.S. Department of Justice standard of “highly concentrated” for antitrust purpose. Concentrated health insurance markets affect smaller, predominately rural states more than larger states.
- Workplace characteristics more common in rural areas such as self-employment, small business ownership and employment, and low-wage work are risk factors for higher rates of being without insurance, being without adequate insurance, and greater dependence on the individual insurance market, conditions all subject to issues of cost, choice, and level of coverage that a public health insurance plan could address.
- Unique rural factors make health insurance coverage less stable for rural individuals and families, ultimately negatively affecting their health. The high cost of insurance in the individual market; generally higher insurance premiums in rural areas; less employer-provided insurance; and lower incomes and higher rates of poverty all act together to leave rural residents with a greater risk of being without insurance, without adequate insurance, or uninsured for longer periods of time, all factors that negatively affect health.
- A public health insurance plan could lead to significantly lower costs to businesses and households. Models show public health insurance plan premiums would be 16 to 30 percent lower than private plans, and health care cost savings would be up to 41 percent greater with a public health insurance plan.
A public health insurance plan available as an option for individuals, families, and businesses helps address the rural risk factors leading to rural insurance instability and would act as a backup for all of the rural factors leading to greater insurance instability. Further, it would act as a check on private insurance plans, keeping private coverage honest in ways that benefit individuals, families and businesses.
To be truly beneficial to rural people and businesses, any public health insurance plan option must contain several provisions. Those are outlined in more detail in Why Rural America Needs a Public Health Insurance Option. Among the most important is equity to rural areas by providing rural provider reimbursement rates that have less disparity than exist under current public programs such as Medicare.
The enhanced coverage and lower costs a public health insurance plan could bring to rural people are of little consolation if rural providers are unable to provide services to public plan consumers because reimbursement rates are too low. A public health insurance plan – for all the benefits it could bring to rural areas – should not aggravate the problem of access. Health care reform should not seek to contain costs on the backs of rural people and rural providers.
You can read Why Rural America Needs a Public Health Insurance Optionat the Center’s health care reform web page, http://www.cfra.org/policy/health-care.
Contact: Jon Bailey, email@example.com or 402.687.2103 x 1013 for more information on the Center for Rural Affairs’ health care reports.