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House-Passed Bill Would Undermine Medicaid’s Critical Role in Rural America

Medicaid, according to Office of Management and Budget Director Mick Mulvaney, “is designed for more of an urban poor population than a rural poor.” In fact, Medicaid plays a disproportionately greater role in providing health coverage in rural areas than urban areas — especially for children and families — a study out today from the Georgetown University Center for Children and Families and the North Carolina Rural Health Research Program shows.

The study reinforces our previous findings that, by effectively ending the Affordable Care Act’s (ACA) Medicaid expansion coverage for 1.7 million rural residents and providing an inadequate tax credit that would sharply increase premiums and other out-of-pocket costs for rural Americans, the House-passed bill to repeal the ACA would hit rural America especially hard.

Forty-five percent of children in rural areas are enrolled in Medicaid or Children’s Health Insurance Program (CHIP) coverage, compared to 38 percent in metropolitan areas, the researchers found after analyzing data from the Census Bureau’s American Community Survey (ACS). That’s largely because private coverage is less available in rural America where, in general, fewer employers offer coverage, contract and part-time work is more prevalent, and incomes are lower.

Recent increases in Medicaid coverage have dramatically reduced the uninsurance rate in rural areas. The share of children in rural areas with Medicaid or CHIP coverage has risen from 40 percent to 45 percent since the ACA’s major coverage provisions took effect. These increases in Medicaid and CHIP coverage helped fuel a drop in uninsurance among children in rural areas from 9 percent to 6 percent, the study shows. This drop has been most pronounced in states like Nevada (from 21 percent to 7), Colorado (from 15 percent to 7), and Alaska (from 16 percent to 9).

The study also shows that each of the ten states with the largest drop in uninsurance among non-elderly adults in rural areas took up the ACA’s Medicaid expansion. For example, uninsurance among non-elderly adults in rural Oregon dropped by 19 percentage points, in rural Kentucky by 17 points, and in rural Nevada, California, and New Mexico by 16 points.

The House-passed bill’s Medicaid cuts put these historic coverage gains, and rural health care more broadly, at severe risk. That’s because the bill would cut federal Medicaid funding by $834 billion over ten years (and reduce Medicaid enrollment by 14 million people by 2026) by effectively ending the Medicaid expansion and converting all of Medicaid to a per capita cap or block grant. These cuts threaten all populations covered by Medicaid, including children and their parents living in rural areas. Overall, the House bill would increase the number of uninsured by 23 million compared to current law.

Senate Republicans are reportedly contemplating modest changes to the House bill. The reality, though, is that modest changes won’t shield children and families in rural America from these disastrous effects.