The Blue Dog leader on Health Care is Congressman Mike Ross of Arkansas. He has been arguing that we need to increase Medicare reimbursement rates in rural areas because they are lower in those areas and have to be raised in order to attract good doctors and to keep hospitals open.
We share those concern. But like the Blue Dog idea of negotiating reimbursement rates in the public health insurance plan instead of setting them at Medicare rates plus 5%, Rep. Ross’s solution will raise premiums in the public health insurance plan, not just in rural areas but across the country. It will also cripple the public plan and reduce competition for private insurance, which will also raise premiums. And, because higher subsidies will be required for these higher premiums, the cost to the Federal government and, ultimately, taxpayers will be greater.
And, at any, rate it’s not totally clear that Medicare reimbursement rates create access problems in rural areas. Costs for many things, after all, are lower in rural areas than urban areas, so it makes sense that reimbursement rates will be lower. Other problems, particularly higher rates of un-insurance, a problem that is exacerbated if premiums in the public are too, lead to hospitals closing in rural communities.
Moreover, reimbursement rates are not the problem in Pennsylvania. While much of Pennsylvania is rural, we have been and can continue to deal with rural health care access without crippling the public health insurance plan.
There is some variation in Medicare reimbursement rates between urban and rural areas in Pennsylvania—as costs vary as well. But our state average reimbursement $6860 is higher than the national average of $6,611.
The average reimbursement rates in the districts of Representative Altmire and Murphy, $7152 and $8344 respectively, are far above the national average. Rates vary in different parts of the other districts because costs vary as well. But the average rates in the districts of Representatives Carney ($6350) Dahlkemper ($6262), and Holden ($6042) and not very far below the national average.
In addition, 13 rural hospitals in Pennsylvania, including one in Representative Dahlkemper’s district and four in Representative Carney’s district, have qualified under Critical Access Hospitals program of the federal government. They are thus already reimbursed on a “cost-plus” basis by Medicare, which is above usual reimbursement rates.
Moreover, the most important thing we can do in Pennsylvania to insure that rural hospitals stay open is provide insurance to the people most likely to use them. We know that when hospitals close or move it is almost always those hospitals located in lower income areas. And the hospital managers always say they can’t survive because of an “unfavorable patient mix” that is too many patients without health insurance. Hospitals in Pennsylvania had a respectable total margin of 4.7% in 2008. However, if 90% of uncompensated care had been covered by health insurance, that total margin would be a stellar 7.04%, enough to keep rural hospitals in business and bring down health care costs.
I don’t know whether things are different in Arkansas. But in Pennsylvania, the best way to guarantee health care access in our rural areas is to make sure that everyone who lives in those areas has quality, affordable health insurance.