How the Affordable Care Act Is Impacting Communities

Continuing Promise 2011When President Barack Obama signed his healthcare legislation, the Patient Protection and Affordable Care Act (ACA), into law, one of its many goals was to improve access to health care services among the country's rural communities.

According to statistics contained in the administration's fact sheet on rural America, one in five uninsured Americans lived in a rural area in 2014. Experts projected the ACA would extend health coverage to more than 7.8 million uninsured people younger than age 65 living in underserved areas. But has the law delivered on its promise?

A Reduction in the Uninsured

While precise numbers are difficult to pinpoint, most analysts agree that, in 2014, the number of newly insured people under the law was about 10 million. Demographic analysis suggests that people in rural areas are signing up at a rate higher than those in non-rural areas.

Arkansas, Kentucky, and West Virginia, as well as the rural areas of Texas, Nevada, and New Mexico, saw a large decrease in the number of uninsured people, either because of plans purchased on the exchanges or due to Medicaid expansion. In that way, the law is having its intended effect.

Unintended Consequences in Rural Community Hospitals

Since 2010, more than 50 rural community hospitals have closed their doors, according to the National Rural Health Association, and more than 280 are on the brink of shuttering. Many of these hospitals are in the same rural areas that have seen the highest reductions in uninsured populations. Ten of these hospitals closed in rural southern Texas alone, and Tennessee lost three rural community hospitals since January 2014.

What's causing the closures? Health executives and economists point to a perfect storm, citing low reimbursement rates under Medicare and Medicaid, penalties for hospital readmissions, costly technology mandates, high-plan deductibles, and the inherent inability of smaller hospitals to meet the economy of scale larger institutes achieve.

The carrot-and-stick approach toward encouraging Medicaid expansion has also hit rural hospitals hard in states that declined to expand their programs. The law's structure significantly reduces reimbursement for care to uninsured patients — designed to compel states to comply with the Medicaid expansion.

When the U.S. Supreme Court declined to uphold the law's mandate for Medicaid expansion in 2012, 17 states opted out of the program. Not surprisingly, many of these states have significant rural populations, such as North Carolina, Tennessee, Oklahoma, and Texas. These states are hardest hit by hospital closures.

The practical effect has been a decline in access to care for the newly insured, some of whom must travel an hour or more to reach the nearest hospital. This situation is a real-world example of how business practices are affecting the healthcare industry. Industry leaders, like those with an MBA in Healthcare, can help pioneer the way to better understanding how these current and future business practices are affecting healthcare.

A Focus on Prevention

However, the ACA does expand preventive services to rural communities. The Act has funding mechanisms for well-child visits, flu shots, mammograms, and a number of cancer screening tests provided at no cost.

It is certainly too soon to objectively measure the ACA's impact on community health, as the law has been fully implemented for only a short time. It would seem, however, that the ACA has extended health insurance to many previously uninsured Americans.


About the Affordable Health Act
Rural Health Voices
Obama’s Health Law: Who Was Helped Most
Rural hospitals, beset by financial problems, struggle to survive
Rural hospitals in critical condition