November 19, 2021 | News | Updates

ICYMI: The Public Option Could Worsen Rural Health Disparities, Produce Minimal Coverage Gains 

WASHINGTON – As lawmakers celebrate National Rural Health Day, a recent report by researchers at FTI Consulting serves as a reminder that the best way to increase access to affordable, high-quality health care for rural communities is by building on what’s working in health care rather than creating new, government-controlled health insurance systems.  

It is therefore unsurprising members of Congress are working to build on our current system during ongoing budget reconciliation negotiations, instead of pursuing policies like Medicare for All, Medicare at 60, or the public option. 

The report, which was supported by the Partnership for America’s Health Care Future, warns that underrepresented populations could disproportionately experience reduced access to health care services under a public option as a consequence of lower reimbursement rates to already struggling hospitals. At the same time, the report finds creating the public option could result in minimal coverage gains, reducing the national uninsured rate by a mere 0.7 percentage points. 

Key findings of FTI Consulting’s report, “Ripple Effects: Potential Impacts of a National Public Option on Provider Viability and Disparities in Access to Care,” include: 

The Public Option Could Produce Minimal Coverage Gains While Putting Patients & Providers At Risk: 

  • While the public option aims to expand access to health care coverage, coverage gains under the proposal are likely to be limited, reducing the overall national uninsured rate by only 0.7 percentage points. 
  • More than 1.5 million currently insured individuals will likely forgo private insurance under the proposal, shifting more of the U.S. population into government-controlled health insurance systems. 
  • By increasing the number of individuals with government coverage characterized by low reimbursement rates, the public option could lead to more financial challenges for health care providers. Of the hospitals in the report’s sample, approximately half would suffer financial losses due to the public option, totaling $1.3 billion annually.  
    • More than 500 of these hospitals are already operating at a significant loss and would be at higher risk of financial distress under a public option. 
    • These higher-risk hospitals could be forced to reduce service lines, shorten appointment times, or implement staffing changes to make up for lost revenue, thereby diminishing access to essential health care services for patients. 

The Public Option Could Put Rural Hospitals & Patients At Greater Risk: 

  • The public option could decrease access to care in rural communities by putting one in four rural hospitals at increased risk of financial distress. Of the higher-risk rural hospitals in the sample, 90 percent were the only hospital in their county.  
    • Given that many rural, low-income areas have a limited number of health care providers, losing even one hospital could have a dire impact on access to care. 

To read FTI Consulting’s full report, “Ripple Effects: Potential Impacts of a National Public  Option on Provider Viability and Disparities in Access to Care,” CLICK HERE


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