IHP 610 Module 3 Milestone One Example

Milestone One: The Coverage Gap and Prairie Ridge Health

[Student Name]

Southern New Hampshire University

IHP 610: Health Policy and Law

Module Three Milestone One

[Instructor Name]

[Date]

The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.

Milestone One: The Coverage Gap and Prairie Ridge Health

This course ends with a policy analysis recommending a course of action on an issue affecting a health care organization. This milestone defines that issue for Prairie Ridge Health: the gap in coverage for low-income adults in a state that has not expanded Medicaid. It explains where the gap comes from, who falls into it, what it costs the system and its patients and how the problem should be framed for policymakers.

How the Gap Was Created

The Affordable Care Act was designed to cover low-income adults in two ways: Medicaid for anyone earning under 138% of the poverty line and subsidized marketplace plans for those above 100%. When small business groups and 26 states challenged the law, the Supreme Court held in its 2012 NFIB decision that the federal government could not withhold existing Medicaid funds from states that declined to expand, which made expansion effectively optional. Because marketplace subsidies begin at 100% of poverty, adults below that line in non-expansion states qualify for neither program. That legal structure is the origin of the coverage gap.

Who Falls Into the Gap

In Prairie Ridge's state, an estimated 180,000 adults have incomes below the poverty line and no Medicaid eligibility, because the state covers nondisabled adults without children only in narrow circumstances and covers parents only at very low incomes. Most are working, often in jobs without employer coverage such as food service, construction and home care. They are disproportionately rural and disproportionately Black and Hispanic.

What It Costs Prairie Ridge

Prairie Ridge's four hospitals provided about $48 million in uncompensated care last year, roughly 5.8% of operating expenses. About 22% of emergency visits were by uninsured patients, rising to 29% at the two rural hospitals. Those rural hospitals ran operating margins of minus 3.1% and minus 1.4%, and the system subsidizes them from its urban flagship.

Table 1. Uninsured Care at Prairie Ridge Hospitals, Last Fiscal Year

Note. Composite figures from system finance reports.

Evidence From Other States

Dranove et al. (2016) compared hospitals in states that expanded Medicaid with those in states that did not and found that uncompensated care fell substantially in expansion states, driven by a drop in uninsured patients, while hospitals in non-expansion states saw no comparable decline. The largest reductions occurred at hospitals that had served many uninsured patients before expansion, a profile that fits Prairie Ridge's rural facilities.

Effects on Patients

Wherry and Miller (2016) examined the first two years of Affordable Care Act expansions and found that coverage rose substantially among low-income adults in expansion states, along with increased use of some services and more new diagnoses of chronic conditions such as diabetes, while self-reported health had not yet changed over that short period. For Prairie Ridge's patients, the gap means conditions discovered late, in emergency departments, when treatment is harder and costlier.

Framing the Problem for Policymakers

Brownson et al. (2009) distinguish evidence about the content of policy, what should be done, from evidence about the process of adopting it and about its outcomes, and they stress tailoring evidence to decision makers. Legislators in Prairie Ridge's state have long framed expansion as a question of federal spending and welfare. The problem is more likely to gain traction if defined as a threat to rural hospitals and local jobs, supported by data from legislators' own districts.

What the State Has Tried

The state has not been idle. It funds a small indigent care program that reimburses hospitals for a fraction of uninsured inpatient costs, about $11 million a year spread across all hospitals in the state, and supports free clinics through grants. Three years ago, it applied for a limited waiver to cover adults up to the poverty line with a work requirement, but the application stalled after federal policy shifted. Each of these efforts has reached only a small share of the people in the gap, and none has changed the financial picture for rural hospitals in a meaningful way.

Political Context

Expansion bills have failed in committee for eight sessions, largely along party lines. Three developments may change that: a new governor who campaigned on rural hospital survival, a business coalition that now supports coverage as a workforce issue and a federal law that sweetens the deal for late adopters with two years of extra matching funds on their existing Medicaid population. Opponents remain concerned about the state's 10% share of expansion costs and about dependence on federal funds that could change.

Why This Is Prairie Ridge's Problem

Some trustees argue that coverage is the state's responsibility, not a hospital's. But the gap directly affects the system's finances, its rural mission and the health of the communities it serves, and nonprofit hospitals have long been expected to advocate for policies that improve community health. Prairie Ridge also has credibility with legislators in rural districts that few other organizations share.

Problem Statement

Because the state has not expanded Medicaid, about 180,000 low-income adults lack an affordable coverage option, contributing to $48 million a year in uncompensated care at Prairie Ridge Health, negative margins at its two rural hospitals and delayed care for patients who arrive sicker and later than they should.

Scope

The analysis will consider state-level policy options for covering adults below 138% of poverty, including traditional expansion, expansion through private plans under a federal waiver, a limited expansion and no change. It will not address federal legislation or broader coverage reform, which lie beyond the state's control, or the system's own charity care policy, which is addressed separately.

Guiding Questions

Three questions will guide the next milestones. Which policy options are available under current federal law, and what are their costs, effects and political prospects? Which option best meets criteria of coverage, cost to the state, effect on hospitals and feasibility? How should Prairie Ridge advocate for that option, and with whom?

Conclusion

The coverage gap is a product of federal law, a court decision and state choices, and it imposes measurable costs on Prairie Ridge and its patients. Framed around rural hospitals and local communities, it is a problem the system has both the stake and the standing to address.

References

Brownson, R. C., Chriqui, J. F., & Stamatakis, K. A. (2009). Understanding evidence-based public health policy. American Journal of Public Health, 99(9), 1576-1583. https://doi.org/10.2105/AJPH.2008.156224

Dranove, D., Garthwaite, C., & Ody, C. (2016). Uncompensated care decreased at hospitals in Medicaid expansion states but not at hospitals in nonexpansion states. Health Affairs, 35(8), 1471-1479. https://doi.org/10.1377/hlthaff.2015.1344

Wherry, L. R., & Miller, S. (2016). Early coverage, access, utilization, and health effects associated with the Affordable Care Act Medicaid expansions: A quasi-experimental study. Annals of Internal Medicine, 164(12), 795-803. https://doi.org/10.7326/M15-2234