Health Insurance Marketplaces that work for Rural American Families - Report examines insurance marketplaces as Affordable Care Act reaches first anniversary
Release Date:
03/22/2011
Contact(s):
Jon Bailey, jonb@cfra.org, Phone: (402) 687-2103 ext. 1013
or John Crabtree, johnc@cfra.org, Phone: (563) 581-2867 or (402) 687-2103 ext. 1010
Lyons, Nebraska - Today, the Center for Rural Affairs released a report that examines how health insurance marketplaces, one of the primary features of the Affordable Care Act, will benefit rural individuals and families.
Entitled, Health Insurance Exchanges That Work for Rural, the report examines some of the crucial rural issues and considerations in establishing state health insurance Exchanges -- new health insurance marketplaces that ensure individuals and small businesses access to health coverage that provides them quality, affordable health care as well as choice and competition.
A full copy of the report can be viewed and downloaded at: http://files.cfra.org/pdf/Health-Insurance-Exchanges.pdf,
“As the first anniversary of the Affordable Care Act being signed into law arrives, we believe it is crucial to reflect on what the Act really does... what it actually has to offer, especially to rural Americans who have faced stern challenges in finding and accessing quality, affordable health care coverage,” said Jon Bailey, Center for Rural Affairs Rural Research and Analysis Director and author of the report.
The Affordable Care Act requires states to have an operating health insurance marketplace by January 2014. States have the authority to create two such marketplaces -- an American Health Benefits Exchange for individuals and a Small Business Health Options (SHOP) Exchange for businesses with up to 100 employees.
“Competitive health insurance marketplaces will benefit everyone, but since rural areas have high numbers of people without health insurance, have vastly higher numbers of people who purchase health insurance on the individual market and have more small businesses -- as well as farmers, ranchers and many other self-employed individuals -- these marketplaces will be crucial for access to affordable, quality health insurance in the countryside and in our rural communities,” explained Bailey. “Many of the questions and issues facing states as they develop their health insurance marketplaces are important to making them work for rural people.”
This report identifies issues with exchange, or marketplace, systems that affect rural areas, for example:
* Outreach to rural residents... Outreach in rural areas is challenging for a number of reasons. Residents are scattered across vast expanses of land, making personal or community outreach difficult. Communication vehicles in rural areas are limited and different than in urban settings. Resources dedicated to rural outreach are also limited. Grant programs established by the Affordable Care Act should also be written to specifically address rural outreach initiatives and some portion of grant resources be made available to implement rural outreach initiatives...
* Rating areas... the Affordable Care Act allows for geography to be used as one of the factors that insurance companies may take into account when assigning insurance rates. Lower population density may lead insurers to charge rates in rural areas that are higher and ultimately unaffordable for many rural residents. Therefore, rating areas in plans offered through health insurance marketplaces should be at least statewide. In states with particularly small populations, interstate rating areas should be allowed...
* Making the Exchanges attractive to rural employers, small businesses and the rural self-employed... Small businesses and self-employed individuals make up a substantial percentage of the rural population. Historically these workers have the highest likelihood of being uninsured due to the high cost resulting from very small risk pools. Because of the importance of small businesses to the rural economy and to rural communities, health insurance marketplaces must be attractive to small businesses employers in order to be successful in rural areas...
* Exchange governance... Existing state agencies, new state agencies or contracts with a nonprofit entity are the administrative options provided by the Affordable Care Act. Whatever option is selected by the state, there is likely to be some sort of governing or advisory board for the Exchange. These boards should include broad representation of state agencies with which the marketplace must work, interested parties and those with expertise on related matters. Governance should include geographic diversity, including rural representation, and representatives from those who will purchase coverage through the health insurance marketplace (primarily the self-employed and small businesses).
“Almost all states are in the process of developing health insurance marketplaces with an eye toward having them ready in 2012 or by early 2013. This is a new undertaking by most states -- Massachusetts, Utah, Washington, Connecticut and California are the only states that have some form of insurance marketplace already established,” added Bailey. “Given the newness of this state function, state policy-makers have many questions to answer and issues to address.”
According to Bailey, rural places and the residents of them have unique circumstances that must be considered and addressed in the development of Exchanges, state-based or otherwise. By their very nature rural places and their residents are more isolated. That is particularly true of low-income rural residents. Information about health insurance marketplaces will be difficult to spread to these populations without a specific emphasis and significant resources.
“For example, conventional wisdom appears to be that Exchanges must be web-based to be effective and efficient. This may be true for the largest number of people across the nation, but it is not necessarily true for many rural residents who generally have less access to high speed telecommunications technology. Again, that is particularly true for low-income rural residents and residents of remote rural areas,” concluded Bailey.
A full copy of the report can be viewed and downloaded at: http://files.cfra.org/pdf/Health-Insurance-Exchanges.pdf,
“As the first anniversary of the Affordable Care Act being signed into law arrives, we believe it is crucial to reflect on what the Act really does... what it actually has to offer, especially to rural Americans who have faced stern challenges in finding and accessing quality, affordable health care coverage,” said Jon Bailey, Center for Rural Affairs Rural Research and Analysis Director and author of the report.
The Affordable Care Act requires states to have an operating health insurance marketplace by January 2014. States have the authority to create two such marketplaces -- an American Health Benefits Exchange for individuals and a Small Business Health Options (SHOP) Exchange for businesses with up to 100 employees.
“Competitive health insurance marketplaces will benefit everyone, but since rural areas have high numbers of people without health insurance, have vastly higher numbers of people who purchase health insurance on the individual market and have more small businesses -- as well as farmers, ranchers and many other self-employed individuals -- these marketplaces will be crucial for access to affordable, quality health insurance in the countryside and in our rural communities,” explained Bailey. “Many of the questions and issues facing states as they develop their health insurance marketplaces are important to making them work for rural people.”
This report identifies issues with exchange, or marketplace, systems that affect rural areas, for example:
* Outreach to rural residents... Outreach in rural areas is challenging for a number of reasons. Residents are scattered across vast expanses of land, making personal or community outreach difficult. Communication vehicles in rural areas are limited and different than in urban settings. Resources dedicated to rural outreach are also limited. Grant programs established by the Affordable Care Act should also be written to specifically address rural outreach initiatives and some portion of grant resources be made available to implement rural outreach initiatives...
* Rating areas... the Affordable Care Act allows for geography to be used as one of the factors that insurance companies may take into account when assigning insurance rates. Lower population density may lead insurers to charge rates in rural areas that are higher and ultimately unaffordable for many rural residents. Therefore, rating areas in plans offered through health insurance marketplaces should be at least statewide. In states with particularly small populations, interstate rating areas should be allowed...
* Making the Exchanges attractive to rural employers, small businesses and the rural self-employed... Small businesses and self-employed individuals make up a substantial percentage of the rural population. Historically these workers have the highest likelihood of being uninsured due to the high cost resulting from very small risk pools. Because of the importance of small businesses to the rural economy and to rural communities, health insurance marketplaces must be attractive to small businesses employers in order to be successful in rural areas...
* Exchange governance... Existing state agencies, new state agencies or contracts with a nonprofit entity are the administrative options provided by the Affordable Care Act. Whatever option is selected by the state, there is likely to be some sort of governing or advisory board for the Exchange. These boards should include broad representation of state agencies with which the marketplace must work, interested parties and those with expertise on related matters. Governance should include geographic diversity, including rural representation, and representatives from those who will purchase coverage through the health insurance marketplace (primarily the self-employed and small businesses).
“Almost all states are in the process of developing health insurance marketplaces with an eye toward having them ready in 2012 or by early 2013. This is a new undertaking by most states -- Massachusetts, Utah, Washington, Connecticut and California are the only states that have some form of insurance marketplace already established,” added Bailey. “Given the newness of this state function, state policy-makers have many questions to answer and issues to address.”
According to Bailey, rural places and the residents of them have unique circumstances that must be considered and addressed in the development of Exchanges, state-based or otherwise. By their very nature rural places and their residents are more isolated. That is particularly true of low-income rural residents. Information about health insurance marketplaces will be difficult to spread to these populations without a specific emphasis and significant resources.
“For example, conventional wisdom appears to be that Exchanges must be web-based to be effective and efficient. This may be true for the largest number of people across the nation, but it is not necessarily true for many rural residents who generally have less access to high speed telecommunications technology. Again, that is particularly true for low-income rural residents and residents of remote rural areas,” concluded Bailey.
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