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Health Care Legislation and Rural Needs
Rural areas are likely to feel more acutely than their urban and suburban counterparts the impact of changes in Medicare and Medicaid. There are many reasons but mostly they boil down to the fact that rural areas support a large proportion of dependent populations: the poor, the young, and those over 65. These three populations are currently eligible for program funding that has helped to equalize their access to health care.
Medicaid is a state-federal matching program, with the federal government paying about 57% of the roughly $125 billion Medicaid expenses. States are laying out about 12% of their budgets to cover their share of Medicaid expenses. About 18 million children and 3.8 million elderly are enrolled nationwide. This would lead one to think that most money goes to pay for poor moms and their kids. However, the cost for each elder is about nine times that for each child. Over 44% of Medicaid expenditures go to support nursing home care. So programs undertaken by many states including Wisconsin to enroll Medicaid children in managed care, while perhaps useful for true care management purposes, will do little (perhaps 5-10% estimates the Urban Institute) to affect the costs of the Medicaid program.
A recently vetoed bill called for reducing the growth of Medicaid spending by $163 billion through the year 2002. By sodoing, these proposals would have effectively eliminated the guarantee of coverage, allowing states to define qualifications, amounts, duration and scope of coverage. Further, a proposal from the National Governors Association calls for the elimination of the Boren amendment legislation, which requires states to pay "reasonable and adequate fees" to hospitals and nursing homes. These types of proposals pose threats to the financial viability of these institutions, and nursing homes in particular. For many rural communities, these nursing homes form a crucial component of the rural health care system, often an integral part of the local hospital and a source of stable funding for local health care providers. Loss of support for nursing homes in rural areas, and their possible closure, could dismantle entire health systems.
Any attempt to change provider reimbursement rates would also adversely affect rural areas disproportionately. Federally Qualified Health Centers and Rural Health Clinics provide safety net services to rural residents. About 30% of their patients are on Medicaid. So they do not bear the full burden of the low Medicaid reimbursement rates and the care they deliver to the uninsured, these clinics are currently "made whole" at the end of the year. A recent proposal that includes the elimination of this cost-based reimbursement program for these clinics might force these clinics to close. The proposal, forged by the National Governors Association in February 1997, is currently being considered by Congress.
For other information about rural concerns:
Wisconsin
Office of Rural Health
Rural Wisconsin
Health Cooperative
National Rural Health Association
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