Rural Health Wins in Super Committee Failure

The recent news that the so-called "Super Committee" was unable to reach an agreement on large spending cuts may be the best outcome for rural health care access.

Cuts being considered by the committee included deep reductions in rural health programs that make limited special payments to some rural hospitals to account for the challenges of delivering care in rural areas. 

Cuts to Medicaid and to the new health insurance premium support tax credits in the Affordable Care Act were also being considered by the committee. Such cuts would hit rural people disproportionately hard because utilization of Medicaid is proportionally higher in rural areas. Health insurance premium tax credits, which go into effect in 2014, are similarly expected to have higher rates of use in rural areas where incomes are lower and self-employment is more common.

No deal by the Super Committee means these cuts are off the table for the time being.

However, in the absence of an agreement on spending cuts, across-the-board cuts will now be triggered in 2013. Many health programs are exempted from these automatic, cuts, including Medicaid, the Childrens Health Insurance Program and the premium tax credits that start in 2014. Medicare benefits are also largely protected from cuts.

But not all health care programs are protected. The across-the-board cuts will increase out-of-pocket health care expenses for low and moderate-income people who enroll in new state-based health insurance marketplaces beginning in 2014 by cutting cost-sharing provisions.

Also included in the automatic cuts is a two percent cut for all Medicare providers. Because retirees account for a higher percent of the rural population, Medicare payments make up 40% of rural critical access hospitals payments, compared to 32% for urban facilities. That means cuts to Medicare reimbursement rates will disproportionately harm rural hospitals.

Congress could still make changes before the automatic cuts go into effect in 2013. Further changes may once again raise the prospect of deeper cuts to programs that support access to health care in rural America.

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