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Healthcare on the farm

Affordable Care Act employer mandate delayed one year. How are rural communities preparing for ACA?  

When the Affordable Care Act (ACA) is fully implemented, it will change America’s healthcare sector. But for the nation’s aging farmers and ranchers daunting problems are still dogging the system.

In early July, the White House announced the delay of the ACA’s employer mandate by one year. The action, said Bob Stallman, American Farm Bureau Federation president, is a good thing as it, “will allow the administration to streamline the process for complying and provide farm employers with the information they need to follow the law.

“Many farmers have been confused from the ‘get go’ about their obligations under the ACA because they employ a workforce that is both seasonal and transitory. The proposed rules regarding what farm employers need to do to comply are complex, raising many questions about responsibility under the law.

“Farmers need access to high-quality, affordable health care for themselves and their workers. Unfortunately, questions about how the ACA will help them attain this have been many, while at the same time definitive answers have been hard to come by. We … look forward to simpler direction so that farm employers will know what they have to do to comply with this law.”

Brian Smith at the Missouri Rural Crisis Center says the delay is unlikely to affect many farms since most have fewer than the mandate-triggering 50 employees. “In some industries, (the delay) may be a good thing. In terms of farmers and agricultural industry, it really won’t have an effect. Most farms have far less than 50 employees and the businesses that support them – farm equipment places, the seed and feed stores – also have less than 50 employees.”

In rural Missouri, the delay of the employer mandate won’t really help or hurt, either. Regardless of when the implementation happens, Smith says the problems with rural health care won’t be solved overnight.

“One thing I’ve been working on quite a bit is Medicaid expansion. That has a great impact on rural communities. What we’re seeing in rural Missouri is that farmers and those who work in the agricultural industry, in general, have much less access to work-based insurance. They usually end up having to go to the private market and that normally results in the highest premium/high deductible type plans.”

In many farmers’ minds, even though they’re paying high premiums with high deductibles, the insurance they have isn’t the most effective. That means, says Smith, “They end up acting as if they don’t have insurance in terms of avoiding doctor visits, putting procedures off and things like that.

“That ends up being a problem economically when … they end up in the emergency room. That is the most expensive way to get care. At that point, you’re likely in worse condition than you would be if you’d been going to the doctor regularly.”

And those who don’t have insurance end up going to the emergency room for everything. Many times, those without insurance are unable to pay the bill and the hospital eats those costs.

That leads to another problem in rural communities: coming DiSH cuts (Disproportionate Share Hospital cuts), which came into being when the ACA passed in 2010. The DiSH cuts are expected to reduce hospital funding $17.1 billion between 2014 and 2020.

“One of the provisions in the ACA involves states expanding Medicaid. Under that expansion, hospitals were going to provide funds to the hospitals swallowing the bills from uninsured patients.

“However, the Supreme Court later ruled that the Medicare expansion is optional. Well, for the states that opted out of that, or opted to wait, the rural hospitals are in a tough spot because those cuts are still coming. Urban hospitals will be able to absorb that quite bit better. Rural hospitals are already having a problem.”

Hospitals are already laying off workers and cutting back on services in anticipation of the cuts, which are set to begin in 2014.

“One example is Liberty Hospital (in Liberty, Missouri) that laid off 129 employees, many of them nurses,” says Smith. “Heartland Health in St. Joseph, Missouri, is planning to end ambulance service in July of 2014. In Columbia, BJC is reducing hours for 35 of their employees and leaving 90 positions unfilled that they were once planning to hire for. Also, BJC in St. Louis is laying off 160 employees.

“So, already the hospitals are beginning to take action. They have no choice because of budgetary realities.”

Up in the air

Will Missouri truly, fully enact the ACA? A key piece, Medicaid expansion, is still up in the air, says Smith. “There are a lot of opponents of ACA in the state legislature. Because it’s a part of ‘Obamacare,’ their first instinct is to resist it.

“When you’re talking rural communities, you’re talking about citizens that are older in age and lower in income. The ACA will be a big help to those folks. There are a lot of folks that would qualify for Medicaid expansion if it is allowed.

“There will also be a lot of folks that would qualify for subsidies on their premiums. So a lot of farmers, who have high premium/high deductible insurance or go without a plan and keep their fingers crossed, would be able to get premium subsidies even if they don’t qualify for Medicaid.

“We would be looking at health insurance plans with much more robust benefits than are being offered today. Plus, if they fall within the right income range – I believe that is 400 percent of the federal poverty level – they’d qualify for premium subsidies. That would make insurance affordable with real merit and value.”

In 2008, a Missouri rancher interviewed for a Farm Press story (see here) on health care said he was considering dropping health insurance and buying a $500,000 life insurance policy. “Then, I’d use that policy as collateral. If I did have a big hospital debt, I’d just sign the policy over to them. When I die, they’d get their money.”

Smith says such considerations continue to this day. “All the time, farmers and other rural citizens must make really tough choices. ‘I can pay for these high premiums and end up with a plan that has a sky-high deductible. And if I meet that deductible and absorb that cost, then I’m looking at a 70/30 split. Thirty percent of a surgery that costs $20,000 means I’m still on the hook for a bunch of money, plus the premium cost.’

That’s led to many farmers taking out life insurance in lieu of health insurance. Some also begin to exercise in earnest in a bid to keep health concerns at bay. “Well, that is fine,” says Smith, “but they’re still in a precarious position (because that approach) doesn’t guard against farm accidents, car wrecks, slipping on the ice, whatever.”

In terms of delivering health care in rural Missouri, hospitals “do a darn good job. But because the state of Missouri – and there are a bunch of other states doing this, as well – doesn’t want to participate in Medicaid expansion, (the problems are building). Right now, we’re not at a point when someone shows up having a heart attack or with a broken leg will be told ‘if you can’t show an insurance card, you’re going to have to fend for yourself.’ Those cases will be treated and stabilized regardless.

“The problem, of course, is if that person doesn’t have insurance and are handed a $10,000 bill. Maybe their farm is making money, maybe not. Maybe they work for a farm equipment store and are making $20,000 or $30,000 a year and are unable to pay the bill. That has an impact on the health care of the whole community because the hospital must absorb it.”

As an example of what rural hospitals are facing, Smith offers the testimony of the CEO of Pemiscot Memorial Hospital in the Missouri Bootheel before the state legislature last year. “He said if we didn’t do Medicaid expansion, when the DiSH cuts come, the very first year the Pemiscot hospital will face a $1 million shortfall. That’s the very first year.

“So, what we’ll see is hospitals cutting back on staff and services. In some cases, they’ll close. And if a hospital like Pemiscot Memorial is routinely $1 million in the red year after year, they can’t keep the doors open forever. Maybe a hospital in a big city can handle that but smaller hospitals can’t.”

That means rural citizens will be forced to bigger city hospitals. There will be many more life flights and ambulances rushing car wreck victims or those having heart attacks to large Missouri cities like Springfield, Columbia, St.Louis and Kansas City.

That won’t just increase the patient load on those hospitals it will also increase their costs.

“Now, when ACA is fully enacted, we’ll have far fewer people that don’t have health insurance. That will be helpful. But if that comes with many more people being flown or trucked into big city hospitals from rural communities it will put all kinds of new pressures on the system.”

In Missouri, the Medicaid expansion debate is still raging. This summer, hearings will take place in the state legislature. Smith says farmers should call their lawmakers and “respectfully encourage them to get Medicaid expansion done and make sure our hospitals are properly funded.”

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