HUGO, Colo. — From the bed in his bright, airy room at Lincoln Community Hospital, a nonprofit 15-bed facility on the western edge of this 800-person town, Ted Lyons rifles through a U.S. Post Office box stuffed with medical bills.
His hands, trembling with Parkinson’s, find the one he’s looking for. It shows that Lyons owes $12,000 for 30 days’ worth of care for a serious skin infection he has been battling for months. To cover this one, he says, he has made a deal with the hospital to take out a deed on some storage units he co-owns. Another bill shows that he must pay $1,400 for a single medication prescription. The box holds more than a dozen other folded documents on identical letterhead.
At 68, Lyons is on Medicare, which saw no change under the Affordable Care Act and is not expected to see change under the American Health Care Act, now being pushed by Republicans in Congress. (Republican leaders in the House postponed today’s vote in the struggle to round up enough votes for passage.)
But Lyons says that the costs of his medications are still unmanageable under Medicare’s drug benefit, and those costs illustrate the larger point about the healthcare debate in the U.S. “It’ll just eat you alive,” he says of the financial burden, speaking with labored breaths. He fears that even with supplemental insurance coverage, this one illness is going to drain his life’s savings.
His experience with Medicare after more than 30 years with “very good” private insurance coverage has piqued Lyons’ interest in the failings of the U.S. healthcare system.
“There’s got to be a solution to it,” he says. “I don’t have all the answers, but what’s been going on isn’t working. We’ve tried it for seven or eight years.” This frustration is partly what motivated Lyons, like 78 percent of the residents in Lincoln County, to vote for President Donald Trump.
It’s not just Lyons who is suffering. Lincoln Community Hospital, like many rural hospitals across the U.S., is struggling financially. Many of these rural hospitals, even those in deeply red counties, fear what passage of the Republican-backed American Health Care Act would mean for health insurance coverage, and thus for their bottom lines.
Lincoln Community Hospital is the only hospital for a radius of about 70 miles, and it offers not only walk-in and emergency room care but provides ambulatory services, long-term care and 17 total specialties. Without it, patients would have to travel long distances to receive treatment.
But Lincoln’s situation is a bit unique. Unlike the majority of rural hospitals, which saw significant financial benefits from Medicaid expansion under the Affordable Care Act, Lincoln has seen its revenues dwindle in recent years. In 2012, it ended the year $1.7 million in the black. In 2015, the nonprofit netted barely $150,000.
“It’s a bit of an anomaly,” admits Joe Hanel, who manages public policy outreach for the Colorado Health Institute. “This is just not a county that benefitted a whole lot from the ACA.” Hanel says that in a dataset of 86 Colorado hospitals, only 10 saw revenues decrease over the past few years. The Colorado Hospital Association lists 41 rural hospitals in the state.
Lincoln’s status as something of an outlier helps explain why on Wednesday, on the eve of the expected push by Republicans in the U.S. House of Representatives to repeal the ACA, you don’t find in Hugo the same post-Trump regrets reportedly found in other rural, pro-Trump communities — the fear that any rollback of the ACA’s Medicaid expansion could be the last straw.
That’s not to say the hospital’s employees aren’t worried about healthcare under a Republican plan, especially as it has been drafted to this point. But for now, they are more focused on what they see as the most critical issue: Whether Colorado will keep its rural hospitals in mind when it plans for next year’s budget.
Since Colorado implemented the Affordable Care Act’s expansion of Medicaid, most rural hospitals have seen their revenues increase. That’s because they now receive federal Medicaid reimbursement for patients who previously would have been uninsured. Hospitals like San Luis Valley Health Medical Center, which serves patients around poor, rural Alamosa County, used this injection of funds under Medicaid expansion to update their equipment, expand their hours and improve their bottom line.
But Lincoln County is different. When conservative residents of Hugo complain that the Affordable Care Act didn’t do much for them, it’s not sour grapes. The numbers tell the same story.
The Affordable Care Act presented two main benefits: An expansion of the qualifications for Medicaid coverage, and federal subsidies for lower-income Americans to buy individual health insurance on the health exchange. Medicaid enrollment here did rise about 7 percent, which parallels the state average. About 24 percent of Lincoln County’s approximately 5,000 residents are now on Medicaid, and a significant percentage of the aging population is on Medicare. But Lincoln’s demographics mean the Affordable Care Act’s benefits mostly end there. Those who don’t qualify for Medicaid earn too much to qualify for the ACA tax credits.
Only 1.2 percent of all Lincoln County residents get subsidies to purchase healthcare on the ACA exchange. Rising premiums and slimmer pickings on the exchange likely pushed those without subsidies to purchase lower quality plans, such as those offering only catastrophic coverage, with higher premiums and higher deductibles, says Lincoln Community Hospital CEO Kevin Stansbury.
That shift, he says, has been noticeable. “If you’re paying $1,000 a month in insurance premiums, more than your house payment, you don’t have the disposable income then to suddenly meet that deductible when you come in needing care. We actually saw an uptick in our bad debt because of that issue.”
Hospitals, particularly those in rural areas, know that some of their patients either won’t be able to pay or will choose not to. Uncompensated care can be classified as “bad debt” or “charity pay.” When insured patients ultimately default on their medical bills, it’s “bad debt.” In 2015, Lincoln Community Hospital’s bad debt costs were nearly $800,000, and the cost has been rising over several years.
“Our sense is, the reason for the increase in bad debt is attributable to the increase in high deductible plans and patients’ inability to fund their deductibles,” says Stansbury. He adds, “We have more people coming in because of Medicaid — that’s better than nothing — but then this other group that we counted on, that commercial insurance group, now suddenly they’re in these exchange plans with very high deductibles. So we sort of swapped that out,” he says. “That’s a problem that we’d like to be solved.”
Stansbury is hopeful about a few aspects of the proposed AHCA. He hopes that giving a larger role to market forces will bring premiums down, and he likes that the new plan addresses the issue of tort reform. Without this legal reform, doctors often conduct unnecessary tests out of a fear of lawsuits, something he calls “defensive medicine.” He also says that he’s in favor of block grants to states, rather than dollars earmarked for specific purposes, “because it gives us more flexibility.” (Critics say that block grants, which don’t increase with rising Medicaid enrollment, would amount to funding cuts.)
But Stansbury says the bottom line comes down to, well, the bottom line. “Rural healthcare has got to be funded enough. The fear I have is there’s going to be a meat-ax approach to cutting costs, which will lead to a continued gap in life expectancy between rural and urban communities. We’ll see our communities dwindle down.” As of 2009, the life expectancy gap between urban and rural residents was two years and predicted to grow.
Hope comes in the form of the state’s Hospital Provider Fee, which redistributes monies from larger hospitals to those in smaller, poorer areas. The fee is at risk of major cuts under a budget proposal by Gov. John Hickenlooper in an attempt to keep the state from losing revenue under the Taxpayer’s Bill of Rights. TABOR, which was approved by voters, limits how much revenue the state can collect before triggering refunds to taxpayers.
Democrats in the statehouse have tried for years to reclassify the fee to, in essence, pull it out from beneath TABOR limits, thus freeing up hundreds of millions of dollars for education, health care and other state needs. Republicans have fought against the reclassification, saying it thwarts the will of the voters to keep state spending down. To the surprise, then, of many State Sen. Jerry Sonnenberg, a key Republican lawmaker whose district includes 11 rural hospitals — including Lincoln — broke ranks and announced Tuesday that he will sponsor a bill to reclassify this fee so that it doesn’t affect TABOR limits. Reclassification, if successful, would likely eliminate the need for a cut, though that’s still in contention.
Stansbury, and several other members of the Lincoln County staff, expressed their wish that Congress would take its time, rather than rushing to push a new plan through in the first 90 days of the Trump administration. “There is not a one size fits all answer to this, even among rural healthcare providers,” he says. Ken Buck, who represents Lincoln County in the House, was still undecided before today’s vote was postponed.
For all his frustration with the realities of the Affordable Care Act, Lyons, too, isn’t exactly thrilled with all of the partisan fighting in Congress.
“I don’t know if they couldn’t have taken some parts of Obamacare and patched the parts that weren’t working if they could have gotten along,” he says.
Photos by Allen Tian