Health Reform for Rural America

NRHA Agenda

The Rural Uninsured

• A greater proportion of rural residents than urban residents are uninsured or covered through public sources. (23% compared to 19%)

• 30% of uninsured rural residents are not employed compared to 27% of urban residents.

• For those who are employed - - small firm size, low wages, and self-employment - - continue to be risk factors for higher uninsured rates in the most rural places.

Despite that - - the problem in rural health care is ACCESS• Health reform that expands health care coverage is

necessary - - rural Americans lack insurance at a higher rate than their urban counterparts - - but there is a greater crisis in rural America: access to health care. Coverage does not equate to access. – Over 50 million Americans live in areas where there are too

few providers to meet their basic primary care needs. – Yet these rural patients face the most daunting of health

care challenges: per capita, rural populations are older, poorer and sicker.

• For health reform to be a success, the access crisis in rural America must first be resolved.

Important for Rural Patients the Rural Economy

• Healthcare is the fastest growing segment of rural economy.

• Each rural physician can generate numerous other jobs in the local rural economy

• In most rural communities hospitals are the largest or second largest employer

• Health care can represent

20% of a rural community's

employment and income.

The NRHA Solution:• To resolve the health care crisis in rural

America, the rural health care safety net must be prevented from crumbling. Three reforms are crucial:– The workforce shortage crisis must be

abated; and– Equity in reimbursement must occur.

Workforce Shortage

• Expand National Health Service Corp• Title VII and Title VIII improvements • Improve Residency Training Programs• Medical School Rural Training Tracks • Lift Caps on Rural Residency Programs• Meet the Needs of Emergency Medical

Services in Rural America• More…

Capitol Hill and Rural Issues

• Briefings:– Senate Rural Health Caucus, Senate Rural

Coalition, House Blue Dogs, Senate Democratic Policy Committee, House Rural Caucus, House Rural America Solutions Group, Tuesday Group

• Stakeholder Meetings with Leadership and Committees

Health Reform Update

• Senator Ted Kennedy (1932-2009)– Health care legacy– Replacement?

• Current Mass. Law – special election• Governor must change to allow Governor appointment,

as some other states do

– 60 Votes to eliminate a filibuster in Senate• Without Kennedy (or replacement) • Without Sen. Bob Byrd (D-WV) – currently in hospital

– So, only 58 Democrats total

• Therefore, need some Republican support

Health Reform Update

• Rumors…???– Dems may split the bill into two sections

• First - Coverage – “Public Option”• Second - less controversial issues – Medicare, workforce

– To get it passed without 60 votes• Budget Reconciliation – only needs 51 votes

– “Back door” or loophole strategy

– Dems Considered same strategy during Clinton Administration Health Reform Effort

• Sen. Byrd, a supporter of the bill, said no.

Other Important Members

• Senate Rural Allies (Caucus)

• Rural W & M and E & C

• House Blue Dogs

• Senate HELP and FINANCE

Medicare Provisions• Critical Access Hospitals

– Reinstate Necessary Provider– Bed Flexibility– Lack of HIT funding in Stimulus– Expand 340B prescription drug program– Elimination of CAH “isolation test” for ambulance

reimbursement– Recruiting residents and physicians– Equitable reimbursement for anesthesia services

Medicare Provisions

• Independent Medicare Advisory Committee (IMAC)…or Sen. Rockefeller’s version– Long-standing problem with rural representation

on current MedPAC Commission• Despite statutory requirements

– Carve out for rural safety net providers– Or, requirement for HRSA/ORHP involvement– At a very minimum, rural representation

Medicare Provisions• Extenders

– GPCI– Hospital hold harmless– Section 508 hospital payments– 2 percent bonus for ambulance payments– Others (included in document on our table)

Medicare Provisions

• Rural Health Clinics– Increase Cap from $77 to $92

• Bringing them closer to CHC cap

• Disproportionate Share Hospitals– Rural hospitals capped at 12%, urban has no cap

• Rural Community Hospital Demonstration Program– Established by MMA

• Set to end soon, and then must go through HHS approval process

– Meanwhile, currently functioning hospitals would be forced to close

– Asking to keep them open until HHS decision (2011), since they are expected to fully instate the program anyway

Analysis of the Health Reform Bills

The Process

• House– Unified “Tri-Committee” Bill.

• Senate– Separate bills reported from Senate HELP

Committee and Senate Finance Committee.

Unifying themes

• Expanding access of coverage• Individual Mandates• Employer Requirements• Expansion of Public Programs• Subsidies to health people get coverage• Quality measures and patient safety (c/e,

VBP)• Insurance pooling (portability

and choice)

Issues that Divide

• Public Plan• Cost• Subsidies (% federal poverty level)• Employer Mandates• Medicaid Expansion• Abortion

Issue that Unites: RURAL!

The Big IssuesBoth bills (HELP and House Tri-Committee bill) would require employers to provide health insurance to workers and individuals to enroll in an employer-based, private or government health care insurance plan or face penalties. But there are differences in the details.

• Employer Insurance Mandate– HR 3200: The bill would require employers that do not offer coverage to pay a payroll

tax equal to 8 percent of their payroll costs. Certain small businesses would be exempt.

– Senate Committee Draft Bill: For employers that do not provide coverage, the bill would assess a fee of $750 per worker per year, or $375 for part-timers. Businesses with 25 or fewer employees would be exempt.

• Individual Mandate– HR 3200: The legislation requires individuals, by 2013, to buy coverage or pay a fine

of 2.5 percent of their income — but the fine would be capped at the cost of the average plan in their area. It offers a hardship exemption.

– Senate Committee Draft Bill: The bill would make individuals pay a fee of $750 a year if they fail to obtain coverage. As with the House version, it exempts those who have not qualified for any affordable coverage.

• Subsidies– Both versions would offer subsidies to those with an income below 400 percent of the poverty level (about $88,000 for a family of four and $43,000 for individuals)

down to the eligibility threshold for Medicaid coverage.

The HELP CommitteeThe Affordable Choices Act

• Require all to have insurance• Create Health Insurance Exchange

(Gateway) - - Individuals and Employers can purchase.– Premium and cost-sharing credits available for up

to 400% of FPL

• Impose new insurance regulations on plans in exchange• Expand Medicaid to 150% of FPL

Is it good for rural?• HELP bill contains very strong workforce

provisions – AHEC funding quadrupled – Strong investment in NHSC– 340B Expansion

H.R. 3200,the House Tri-Committee Bill

• Require all to have health insurance• Create a Health Insurance Exchange - - Individuals

and Employers can purchase.– Premium and cost-sharing credits available for up to 400%

of FPL

• Require employers to provide coverage or pay into exchange (small employers exempted)

• Impose new insurance regulations on plans in exchange

• Expand Medicaid to 133% of FPL

Is it good for Rural?

• NRHA Concerns:– Many Medicare Inequities Not Addressed– Residency Redistribution– Public Plan Reimbursement Rates– Investment in Workforce not sufficient (Title

VII, Title VIII, GME provisions omitted)

H.R. 3200/Rural Positives• 340B Drug Expansion – CAHs, MDH, SCH, RRC, expand to

inpatient drugs.• Primary Care Investment

– NHSC– GME grants for expanding residency programs to RHCs and

FQHCs– Primary care payment increases – extra 10% bonus for primary

care in HPSA.• IOM Study on Geographic Adjustment Factors• Medicare “Extenders” plus:

– marriage and family therapists; and – Mental health counselors

• MedPAC Rural Representation – Congressman Walden Amendment– Also protects proposed IMAC, or similar entity (Sen. Rockefeller’s

plan) to ensure rural representation

HR 3200 - status

• Ways and Means – 16 hour mark, party-line vote. One republican amendment accepted.

• Energy and Commerce – Finished mark after Blue Dog agreement

• House Floor Vote? Sometime in September.

The Big Question…

Finance Committee

• Traditionally strong rural advocates.

• NRHA strong advocacy and grassroots focus on Finance.

• Attempts to Make it a Bipartisan Bill– Grassley, Snowe, Enzi

• Want to keep bill under $1 trillion– Don’t forget Doctor “fix”

Emerging Issue

• Co-Op concept:– Sen. Conrad’s Co-Op Plan - - Alternative to

public plan• Must have enough participation to make it

viable “critical mass.”• May not offer lower premiums but can offer

choice.• Only could become important sources of health

coverage if govt. gets involved (control risk pooling, subsidies)

Our Rural Champions

• Sen. Conrad and Sen. Roberts - - original cosponsors of S. 1157

• Ranking Member Sen. Grassley - -Strong Interest in Rural GME reform

• Sen. Baucus – Focusing on Rural Medicare Reimbursement: Requested suggestions for improving CAH HIT/Nec. Provider

Many Important Players• Chairman Baucus – Montana• Senator Grassley – Iowa• Chairman Stark - California• Senator Wyden - Oregon• Representative Pomeroy – North Dakota• Senator Bingaman – New Mexico• Senator Lincoln – Arkansas• Senator Enzi -- Wyoming

Rural America Needs You!

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Thank you!

Danny Fernandez

Manager, Government Affairs and Policy National Rural Health Association

Fernandez@nrharural.org