Rural and Urban Sources of Insurance Coverage: the Role of Public and Private Coverage over Time

Research center:
Lead researcher:
Project funded:
September 2018
Project completed:
March 2021

Despite a wealth of survey data available on the topic of health insurance, much less attention has been paid to understanding the relative importance of the sources of coverage in rural areas compared to urban, especially when looking within the "rural" category. Kaiser Family Foundation found in 2017 that public insurance plays a larger role in rural places, using ACS 1-year survey data and classifying 20% of counties as "urban," 20% as "rural," and the remaining 60% as "other" based upon an Index of Relative Rurality. We believe that it is likely that there is significant variation across locations of residence, i.e. subcategories of rural, using definitions based on Urban Influence Codes, as well as rural places in various regions of the country. Thus, the purpose of this project was to conduct a careful calculation of rates that accounts for multiple sources of coverage, both currently and over time. The reliance of rural people on various types of health insurance coverage has changed considerably in recent years – for example, as the recession has impacted employer-sponsored coverage, expansions of Medicaid coverage have raised the number with Medicaid coverage, and the aging of rural America has increased Medicare coverage rates. We hypothesized that these trends and others have led to a greater dependence on public sources overall, with some rural locations having been particularly impacted, although the reliance on public coverage may also be lower in some regions of the country. Our analysis identified other factors that appear to be correlated with this distribution, such as shifting employment patterns.

The trends analysis provided information on the impact of policy changes over the past several years on rural counties. As coverage sources shift, funding sources may also shift from federal to state or vice versa. Rural areas with low employer-sponsored coverage (which may have been impacted more significantly by employment changes) may benefit from policies that promote or incentivize non-group private insurance options, while places with heavy dependence on public insurance may benefit from policies that support healthcare providers in an environment of low reimbursement rates.

Finally, this analysis served as a benchmark against which future policy improvements can be measured. This was the first opportunity to conduct rural analysis at the county level since the implementation of the Patient Protection and Affordable Care Act. As such, it was important to measure the current landscape of insurance sources and coverage.