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Obamacare Subsidies Can Be A Lifeline For Rural Residents

Bram Sable-Smith/Side Effects
Roxanna Leavell (left) and Patty Hendren are certified application counselors with Randolph County Caring Community Partnership, who help consumers find insurance through the federal marketplace.

When Darvin Bentlage needed colon surgery in 2007, he had an expensive stay at the hospital.

“The room alone for a week was $25,000,” Bentlage says. Add in the cost of the procedure and, “it added up to about $60,000 or $70,000.”

Bentlage is a farmer in Golden City, a small town in southwest Missouri. His colon surgery came right on the heels of another major medical expense. He had hepatitis the year before. All together his medical bills totatalled about $100,000 in two years. Without insurance, Bentlage had to refinance his farm to pay the bills.

Like Bentlage, many rural Americans tend to be a little older, sicker and poorer than their urban counter parts, a combination that previously put health insurance out of reach for many. Today, Bentlage is one of more than six million Americans who receive tax subsidies to purchase health insurance through the federal marketplace.

The legality of these subsidies was upheld last week by the U.S. Supreme Court in the King v. Burwell case.  They are available to those earning between 100 percent and 400 percent of the federal poverty level. A disproportionate number of rural residents fall into this income (50 percent compared to just 43 percent of their urban counterparts).

And rural residents are more likely to need to purchase insurance through the exchanges, explains Maggie Elehwany, vice president of government affairs at the National Rural Health Association.

“There are not a lot of large companies that provide employer based health coverage” in rural areas, Elehwany says. “Often you’ll see that many in rural America are self-insured.”

In Missouri, about half of the almost 200,000 consumers receiving subsidies live outside of the state’s two major urban centers, according to the Missouri Rural Crisis Center.

Patty Hendren works with the Randolph County Caring Community Partnership in Moberly, MO, which helps resident in 17 rural northeast Missouri counties enroll through the exchange. She says many residents in her area simply went without insurance before.

“I worked with a gentleman who was 54 years old who had never had insurance in his life,” she recalls.

This year in Randolph County alone, Hendren estimates she helped enroll about 100 people. Most of them received some subsidy, which is important, she says, because they all have one question for her: “How much is this going to cost me?”

“It’s human nature,” Hendren says. “They want to know, ‘Can I afford this?’”

Even with the subsidies, the answer is not always Yes. Rural residents have fewer plans to choose from on the exchange, and that lack of competition can often translate to higher priced plans.

And, Hendren notes that she sees many consumers who fall into what’s called the “coverage gap.” In states that did not expand Medicaid, of which Missouri is one, there is a part of the population that makes too much money to qualify for Medicaid, but too little money to qualify for subsidies to purchase insurance on the exchange.

Still, an estimated three-fourths of the nation’s rural uninsured population is in the income range to receive subsidies. Darvin Bentlage is one of them.

When he first tried to get insurance before Obamacare went into effect, the insurance salesmen found out about his medical history, and quoted him prices that were practically impossible given his estimated income of about $25,000.

“They were quoting me $1,500 a month with a very high deductible, about $10,000,” he recalls. “If something happened and I had to use the insurance, I was out $30,000 a year.”

In 2014 using the federal Obamacare exchanges, he was able to enroll in a health insurance plan that costs him about $5,000 a year because of the subsidies.

“It’s a big load off your mind,” he says of being covered by insurance. “Part of dealing with health issues is your mental capacity. And I don’t think your ability to heal yourself is quite as great when you’re worrying about how you are going to pay for this.”