This article includes corrections to the story published in the Oct. 2, 2013 Agri-Pulse newsletter.
Jon Bailey, who directs research at the Center for Rural Affairs, says the new federal insurance marketplace was practically created for people in rural areas. Nearly one in five uninsured Americans lives in a rural area and a greater proportion of rural residents lack health insurance in comparison to urban residents, according to government data.
“Rural people will have more choices, and the marketplace might be more competitive,” Bailey insists.
The Department of Health and Human Services also emphasizes the program’s potential impact on rural areas, estimating more than 7.8 million uninsured rural Americans under 65 will have the opportunity to sign up for healthcare through ACA.
“The Health Insurance Marketplaces are expected to increase competition in the insurance market in rural areas – especially in the 29, mostly rural states, where a single insurer currently dominates more than half the health insurance market,” HHS claims in a fact sheet.
Bailey said about one-third of rural residents purchase insurance on the individual marketplace instead of through an employer.
“The affordability of insurance will determine the success of the primary goals of the Affordable Care Act – enrollment in health insurance exchanges to increase insurance coverage and reduce the nation’s uninsured,” Bailey added.
The ACA provides tax credits to offset the cost of health insurance premiums, depending on the income of the purchaser and the type of health insurance purchased.
Premium tax credits will be available to individuals and families purchasing insurance through a health insurance marketplace and with incomes between 100 and 400 percent of the federal poverty level. That’s between about $11,000 and $45,000 for an individual and between about $23,000 and $94,000 for a family of four for 2013, explains the Center for Rural Affairs.
Rural residents who live nonadjacent to metropolitan areas are responsible for nearly 22 percent more of their total health care costs, which includes premiums and out-of-pocket costs, than are urban or rural residents adjacent to a metropolitan area, the Center also notes.
Bailey says rural health care coverage is often not as good as coverage more common in urban areas. He notes that individual or small group insurance generally does not cover as much as larger group insurance, which is more readily found in cities.
According to a paper he wrote in August 2013, however, ACA will now set limits on out-of-pocket costs through cost-sharing assistance provisions. Those with incomes below 250 percent of the federal poverty level are eligible for cost-sharing assistance.
Cost-sharing assistance provisions in the ACA are intended to decrease the amount of out-of-pocket health care expenses and increase the actuarial value of insurance.
However, it might not be quite that easy for rural residents currently struggling with out-of-pocket costs. Bailey noted that the capping costs for a certain part of the population would likely necessitate balance elsewhere in federal insurance costs.
“Somebody’s going to have to make that up,” Bailey said. “By no means is this law perfect. There are some unintended consequences that will rear their head.”
Still, Bailey says the government has been able to fix problems in large programs like the ACA before, using Social Security and Medicare as examples.
“It’s really difficult to make presumptions before the [program] really opens up,” he said. "It would be like reviewing a restaurant before it opens.”
For the Nebraska Farm Bureau, the potential unintended consequences of the law are already a burden. The organization found that most farmers and ranchers purchase insurance on the open market instead of from an employer. The group conducted a survey of its members in 2009 on its health care habits, and began another survey last month asking about members’ insurance types and premiums.
Although the most recent survey is still underway, Jordan Dux, who directs national affairs at Nebraska Farm Bureau, said most of the conversations and responses so far indicate that premium rates are increasing for his members.
“We’ve never had this amount and this significant amount of comments on an issue ever before,” Dux said. “There are hundreds of responses so far. The majority of those are seeing increases, some are significant increases.”
Dux also explained that Nebraska is a largely rural and agricultural state. He said roughly half of the state’s rural residents would qualify for subsidies for federal insurance. However, the premium and out-of-pocket costs, as well as the available coverage, are still unknown.
Dux also noted that many rural residents that currently seek healthcare on the open marketplace do not necessarily want to rely on federal subsidies to buy their healthcare.
“With as massive as a piece of legislation as this is, I think there’s confusion nationwide,” Dux notes. “There are so many different pieces to this I don’t think there’s a clear understanding from the folks in Washington or the health insurance companies.”
In a letter from 2009, the Nebraska Farm Bureau warned that requiring compulsory health insurance in the form of an individual coverage mandate or forcing insurers to cover everyone would mean higher insurance premiums.
“With a large percentage of farmers and ranchers being self-employed, and as such purchasing their own health insurance, we are concerned any coverage mandates would only increase the cost of health insurance,” the organization maintained.
Dux said his Farm Bureau’s latest survey, which will conclude in mid-October, would hopefully provide more data and general information for state lawmakers interested in the healthcare law.
Meanwhile, rural ACA advocates like Bailey and the Center for Rural Affairs face a significant challenge in effectively communicating the opportunities of the new law to rural residents. Many residents of states that do not have state-based exchanges need information directly from the federal government, which has limited resources to promote the law.
The ACA added a section to the Fair Labor Standards Act requiring employers to provide existing employees with basic information about exchanges by Oct. 1, including letting employees know they may be eligible for federal tax subsidies to buy health plans through exchanges.
Businesses are coping with this demand in a number of ways. In one example, the National Restaurant Association created an online resource designed to help employers notify employees about government-run health insurance exchanges by Oct. 1.
However, a large portion of rural residents are self-employed, especially farmers and ranchers. Nebraska Farm Bureau’s Dux added that many rural businesses are also small businesses, which still do not fully understand how the law will influence them.
“As the new law gets implemented, there are a lot of new things for businesses to do and records to keep,” he said.
Healthcare sign-up experiences hiccups
Tuesday’s initial healthcare sign up did not go off without a hitch, with many reporting glitches that limited accessibility to the online marketplace.
“We have been warned time and time again that Obamacare is not ready for prime time,” said Rep. Tim Huelskamp, R-Kans., after he attempted to sign up for the federal exchange. “Well, it turns out that is right . . . I was met with error messages, unfinished security forms and misspelled notices at every click.”
Congressional Republicans also put emphasis on delays for other parts of the law, which were not implemented Tuesday with the release of the federal healthcare marketplace. These delayed provisions include the employer mandate, which requires companies with 50 or more employees to offer insurance to their workers or pay penalties, and online enrollment in some small business exchanges.
Fully ready or not, individuals have until Dec. 15 to buy health insurance through the exchange for coverage that starts on Jan. 1. Enrollment will continue until March 31, with the next enrollment period beginning in October 2014 for coverage in 2015.
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