A new report released this month argues that Republican proposals to remake the nation’s health care system would hurt rural Coloradans by cutting parts of the current law that help small towns and by shifting benefits to big cities.
Which is exactly what Tony Adkins, a geologist who lives in Nucla, has been worrying about lately.
Adkins and his wife receive generous subsidies under current law to buy health insurance in their county on the Western Slope, where plans can be among the priciest in the country. Without those subsidies, Adkins says he and his wife would have to pay $25,000 a year for coverage.
The GOP proposals, though, reduce those subsidies. The plan that Republicans in the U.S. House of Representatives passed this year — called the American Health Care Act — and the version that the Senate unveiled Thursday — called the Better Care Reconciliation Act — do this differently. But the effect would be the same: People in areas where health insurance costs a lot to buy would have to shoulder more costs themselves.
And, in Colorado, those areas are often rural.
“We’re going to come out worse for it,” Adkins said of the GOP proposals. “I don’t see any way we don’t come out worse for it.”
Adkins’ worries are backed by the findings of a number of research groups, all of which argue that the GOP plans would shift government benefits away from rural communities and into cities.
Many of these analyses focus on Medicaid, the government’s program for insuring people in poverty or just above.
A report Thursday by the Colorado Fiscal Institute found that rural counties account for nine of the top 10 counties in the state for the percentage of the population that receives Medicaid benefits — making them the most vulnerable if Medicaid is cut. Meanwhile, 75 percent of the households that would receive tax cuts under the House’s version of the health care plan live in the Denver metro area, the report found.
Crunching the numbers differently, the Colorado Fiscal Institute found that only six counties in Colorado would see more money coming in from tax cuts than they see going out in federal Medicaid spending and premium subsidies. Four of those counties — Boulder, Broomfield, Douglas and El Paso — are along the state’s urbanized Front Range. The other two — Pitkin and Eagle — are the buckle of Colorado’s resort belt.
“Urban counties will come out as huge winners when you take into account the hefty tax cuts for upper income earners,” the institute’s report states.
An analysis by the left-leaning Center on Budget and Policy Priorities released this month echoed that conclusion, finding that Medicaid provides coverage for 45 percent of kids and 16 percent of adults in small towns and rural areas, compared with 38 percent of kids and 15 percent of adults in cities.
“If Medicaid is cut, it will undermine the financial stability of rural hospitals and health care clinics that whole communities rely on for care,” Sarah Barnes, a senior policy analyst at the Colorado Children’s Campaign, said in a statement accompanying that report’s release.
Adkins’ story illustrates another way, though, that experts say the GOP proposals would impact rural Colorado.
Under the Affordable Care Act — the law that is also known as Obamacare and that the GOP is trying to repeal — people who buy health insurance on their own receive tax credits to help them pay the premiums. The credits are tied to how much the person makes but also to how much that person’s insurance costs. When the cost of insurance goes up, so do the credits.
Under the House’s health care proposal, that dynamic changes. Credits would be fixed, based on age and income, and wouldn’t take into account the price of insurance.
A report released this month by the National Academy for State Health Policy argued the change would effectively widen the disparity between urban and rural Colorado.
Using data from the Kaiser Family Foundation, NASHP predicted health insurance costs in Denver and Mesa County, on the Western Slope. Under current law, insurance for a 40-year-old making $30,000 a year would cost $4,420 a year in Denver and $7,030 a year in Mesa County. After the current tax credits are applied, though, the cost would be equal in both places: $2,480, according to the NASHP report.
Under the health care bill the House passed, the disparity in costs would persist after the tax credits are applied. The 40-year-old in Denver would see premiums drop by more than $1,000 a year, while the 40-year-old in Mesa County would see premiums rise by over $1,500.
The disparity becomes even more pronounced if insurers begin charging older customers more for coverage than they currently do, something that the House and Senate versions of the health care plan could allow them to do.
When Adkins — who is 64 and whose household income was around $20,000 last year — hears that, he cringes.
Adkins has a heat condition, which he controls through medication. Before the Affordable Care Act, no traditional insurer would provide him coverage.
He and his wife have savings to help cover increased insurance costs for a bit, he said. And, within about three more years, he and his wife will both be old enough for coverage under Medicare.
But, until then, Adkins said he is just hoping that his heart doesn’t give out before his insurance does.
“I never would have thought,” he said, “that I would have said I am looking forward to Medicare.”
