Changes in Medicaid that are contained in the latest Republican effort to repeal the Affordable Care Act would have an outsized impact on rural areas, according to a new report by a nonprofit economics center.
The analysis by Headwaters Economics indicates that the counties that are most “reliant” on Medicaid tend to be rural.
The study measured Medicaid reliance based on the size of Medicaid payments expressed as a percentage of a county’s personal income. They defined Medicaid reliant counties as those where Medicaid payments equaled more than 10 percent of total personal income. Five percent of U.S. counties, or 163 counties, met this threshold in 2015. Most of those counties were rural.
Besides tending to be rural, Medicaid-dependent counties are poorer, have a higher percentage of nonwhite population, and have lower education levels than the national averages. Significant clusters of these counties are in the Appalachian coal counties, Mississippi River Delta, and tribal or reservation communities of the West.
The most recent attempt to repeal Obamacare would eliminate Medicaid expansion, which raised the income threshold for qualifying for Medicaid to 138 percent of the federally defined poverty level. The “Graham-Cassidy” proposal would also get rid of healthcare insurance marketplace subsidies starting in 2020. Instead, smaller temporary block grants would be provided to states, which could use the funding to help pay for health insurance or any other health care purpose.
The Center for Budget and Policy Priorities, a nonpartisan research and policy institute that focuses on reducing poverty and economic inequality, reports that the Graham-Cassidy bill would cut health coverage for millions of Americans by “undoing the ACA’s major coverage expansions through a block grant, and second, by radically restructuring and cutting the entire Medicaid program.”
The Headwaters Economics analysis says counties with high Medicaid reliance are likely to have additional factors associated with poor health. These include factors such as single-mother households, elderly individuals who live alone, households with no car, and others.
Rural counties with high Medicaid reliance also tend to have a higher percentage of income derived from “non-labor income,” according to economists. “Non-labor income sources such as investments, Social Security, Medicare, and Medicaid are the largest and fastest growing sources of personal income for many counties. Rural counties especially are dependent on non-labor income,” according to the Headwaters report.