Gaps in health care access and data in rural and underserved communities complicate how actuaries assess risk, design coverage, and evaluate models of care.
By Noah Kirsch
Since the Affordable Care Act was adopted in 2010, the number of people in rural areas without health insurance has dropped by nearly half, according to a 2024 report from the U.S. Department of Health and Human Services. Still, significant coverage gaps remain. Rural citizens are more likely to be uninsured than their urban counterparts, according to the report, Access to Health Care in Rural America: Current Trends and Key Challenges. And even in urban centers, health care access varies dramatically based on economic and social factors.
These disparities are crucial elements of the American health care landscape at large. A fifth of the population lives in rural areas, according to census data. In these regions, about a quarter of adults are covered by Medicaid (a larger percentage than in urban environments), according to the KFF report, How Might Federal Medicaid Cuts in the Enacted Reconciliation Package Affect Rural Areas?
Meanwhile, about 13% of Americans in principal cities within metro areas live below the poverty line—a level of financial insecurity that is correlated with health issues. “Unmet social needs, environmental factors, and barriers to accessing health care contribute to worse health outcomes for people with lower incomes,” the Office of Disease Prevention and Health Promotion said in its Healthy People 2030 initiative.
For actuaries, understanding the unique dynamics and barriers to health care access for rural and underserved urban populations is necessary to accurately model risk and engage with policymakers about potential solutions. This is especially true given recent changes to national and state health policies.
For instance, the One Big Beautiful Bill Act (OBBBA) of 2025 reduced “federal Medicaid spending in rural areas” by an estimated $137 billion over 10 years, KFF found. At the same time, however, it introduced a $50 billion Rural Health Transformation Program designed to spark innovation in rural markets to improve “health care access, quality, and outcomes.”
This article examines many of the key hurdles facing both rural Americans and underserved urban Americans, including limited provider networks, transportation challenges, difficulties acquiring quality data, and social factors that can exacerbate health care issues, such as lack of access to fresh produce and stable housing. It also examines these challenges in the context of actuaries who model health care risk and evaluates emerging care delivery models designed to improve access and efficiency.
Overall, the role of actuaries in the health care system is about much more than simply calculating premiums and risk, said Donna Novak, a member of the Academy’s Health Equity Committee. “If the actuary’s goal is to bring down health care costs in order to bring premiums down, then they get involved in these issues.”
Obstacles to Health Care Access
One of the core challenges to achieving equitable health care outcomes for rural and underserved urban Americans is ensuring they receive care to begin with. “There are just a lot of barriers to providing access,” said Robert Moser, medical director for the University of Kansas Health System’s Care Collaborative.
In rural markets, he observed, poverty rates tend to be higher, and fewer individuals work for large employers that provide access to affordable insurance. “If you look at the average out-of-pocket cost for health care in rural [areas], it’s significantly more than what it is in urban areas,” he said. Kansas is also one of 10 states that have not adopted Medicaid expansion coverage. Rural populations in those states have much higher uninsured rates, according to the U.S. Department of Health and Human Services.
Brock Slabach, chief operations officer at the National Rural Health Association, noted that rural patients also tend to be older and sicker than their urban counterparts.
Additionally, underserved markets often have fewer providers. The reason for the shortage varies by region, said Mick Diede, chairperson of the Academy’s Health Care Delivery Committee, including high crime rates or because the mix of patient insurance plans results in low reimbursements.
On average, rural America has 40% fewer health care providers per capita than the country as a whole, said Jim King, CEO of Fahe, a network of more than 50 nonprofits in Appalachia. That might mean “there flat out aren’t any specialists of a certain kind,” Diede noted, or that primary care physicians are stretched thin and might not be able to see patients in a timely manner.
For instance, Moser said, “If I want to consult with a rheumatologist in Western Kansas, I’d probably be looking across into Colorado or Wichita,” which would require a three-to-five-hour drive and “at least a year wait time to get in.” The distance also makes it challenging for specialists and primary care doctors to coordinate care, Novak added.
For doctors who decide to practice in these regions, overhead is higher because practices often need to “deliver a lot more services” and must invest in a wide array of equipment, Moser said. In rural areas with fewer patients, the lack of volume can make it hard to recoup that overhead. This applies to small and large practices alike, and is “one of the drivers behind why more than 100 rural hospitals have closed or reduced core services since 2010,” King said.
To remedy this problem, “you need to make the economics work for a provider to be there,” said Julia Lerche, the Academy’s senior actuary, Health. “That might take some additional investment.”
A second barrier to coverage for these demographics is that hospitals and health systems frequently struggle to stay open. This is true for several reasons. One factor, Diede said, is that many procedures that used to require inpatient care can now be done on an outpatient basis, which reduces revenue for hospitals. Moreover, he said, reimbursement rates often don’t cover the total cost of operating a hospital or other medical practice.
These issues may become more pronounced due to certain elements of the OBBBA, originally known as H.R. 1. As part of cost-saving measures, it is expected to increase the number of uninsured Americans in rural areas, and it “reduces Medicaid payments to many hospitals as well,” Lerche said.
Even when care is available, patients in underserved and rural regions may struggle to receive it. Reliable transportation isn’t always available in these communities, said Susan Pantely, co-vice chairperson of the Academy’s Health Practice Council. Lower-income individuals face an additional hurdle in that they might not be able to take off work for an appointment, Novak added.
Separately, for patients who need to be transferred to larger health care systems in rural markets, there often aren’t enough ambulances or drivers available, Moser said. In some cases, that means patients are transferred using air transport, a much costlier alternative.
Virtual and digital health models are seeking to remedy some of these issues, Pantely said, but patients still need access to stable internet, which is not always the case.
Price, of course, is a barrier as well. In rural areas, insurance plans often include higher out-of-pocket costs, Novak said, “so people will go without services sometimes.”
There are also qualitative obstacles, said Yi-Ling Lin, a member of the Academy’s Health Equity Committee. For example, patients might have trouble finding a local practitioner who speaks their language or who they can relate to (for instance, regarding the nuances of their sexuality).
“For actuaries, the implication of modeling health care needs in areas with few providers and struggling health systems is that market dynamics don’t operate as they do elsewhere. As a result, it is more challenging to ensure that patients have access to care and that medical systems remain viable.“
Moreover, Lerche said, actuaries should recognize that addressing these problems won’t immediately transform them; it will require long-term investments. “You can’t just put a [new] primary care provider in place and then, the next day, emergency room visits are going to go down,” she said. “It takes some time.”
Data Credibility
Another ramification of the health care dynamics in rural and underserved areas is that actuaries often struggle to obtain quality data to forecast medical needs. This is partly true because of the barriers to access outlined in the prior section. When “people aren’t going to the doctor, understanding their health risk is hard,” Pantely said. On the other hand, “when people have access, they can use a lot of services.”
Therefore, a person who can’t afford their prescription medicine and doesn’t go to the pharmacy—or who can’t find or reach a local physician, or who lacks insurance and doesn’t seek care—may appear in the data to be healthy because there are few health visits in their history. Ultimately, though, that individual “could be more costly because they’re going to wait until they’re in a crisis mode and maybe have a hospitalization,” Pantely said.
There are other reasons for actuaries to worry about accessing credible data. In rural regions, populations are smaller, and there is more variability in utilization and costs from year to year, Novak said.
It can also be challenging to segment data in an effort to draw insights about risk, Pantely added—and even more so when the sample size is small. “Most of the time as actuaries we are limited to claims data, and we have to tie it to other data in order to figure out what the income level is,” she said, citing one possible sub-category. “Anytime you’re combining data sets that aren’t directly linked, it’s an imperfect process.”
Population-level data is available, she noted, but much of it relies on self-reporting and surveys, which are not necessarily reliable or “a strong predictor of the individual risk level.” This issue may improve with more structured data from electronic health records and “Z codes”—diagnosis codes designed to offer details on patient backgrounds beyond illnesses and diseases, such as social determinants of health like housing security and financial well-being.
The problem, Lin said, is that Z codes are frequently left empty. “Even if you see a primary care physician, some of them may not actually ask you those questions or the information may be misrecorded or incomplete.” In her view, the codes are helpful data points, but the data set as a whole is “sparse and unreliable.”
For actuaries, missing or inaccurate data makes it extremely difficult to forecast costs and assess risks. Lin cited the theoretical example of a ZIP code with a high number of breast cancer screenings. That might lead actuaries to assume that the area needs more attention, such as additional public safety announcements, more screenings, and more access to doctors.
In that scenario, an actuary might assume that a zip code with no breast cancer screenings doesn’t require as much of an investment. However, the lack of data might simply be because people can’t access doctors, she said. Failing to note these concerns creates a “very cyclical problem” that could disadvantage certain rural and underserved areas that already aren’t receiving the same level of care, she said. Lin noted that, in cases where limited data is available, actuaries already attempt to extrapolate statistics from other locations to avoid falling into this trap.
Lastly, Lin said, actuaries seeking to address coverage gaps should not just consider short-term costs when debating the effect of spending or policy changes. “If health outcomes are better but your costs are higher because people want to get more screenings, that’s a good thing,” she said. “But that doesn’t end up showing up in the premiums, not for a long time.”
Innovations and Emerging Models
There are numerous efforts underway to improve health care outcomes for rural and underserved urban patients. The first category of initiatives centers on social determinants of health: increasing access to quality food, housing, clean water, and other things that many of us take for granted, Lerche said.
King offered the example of a health center in Whitesburg, Ky., that operates a “Farmacy” and gives vouchers for free food and produce to patients who come every week to have their blood pressure and vitals checked.
Simple, low-cost initiatives can both serve patients and save the health system money in the long run, said Jackie Mayo, CEO of HomeSource east tennessee, a nonprofit working to address housing insecurity. The organization is working on various “aging-in-place” efforts that would reduce the frequency of emergency room and hospital visits, particularly as more hospital systems are closing in rural areas. “It might be something as simple as step-in showers,” she said.
Pantely offered a similar potential policy: helping families that have children with asthma purchase a vacuum cleaner to preempt health problems. “Our system isn’t always set up to pay that way, but in the end, it’s much cheaper to buy them the vacuum than to have them go into the hospital,” she said.
On local and national levels, there are ongoing efforts to encourage more providers to practice in underserved areas, and to help buoy struggling hospitals. Still, Lerche said, private insurance companies might also consider how they can “support access in communities,” particularly if those initiatives ultimately result in savings.
Another potential way to help providers is to shift to new models of reimbursement, such as those that don’t rely purely on volume. For instance, doctors or health systems could get paid using a “value-based model”—with compensation tied to health care outcomes or delivered in a bundled manner for a patient’s overall care.
“That gives a little bit more stable income to providers that may have a smaller number of patients,” Lerche said. Still, Diede added, even alternative models will not ultimately help providers if their overall revenue doesn’t increase.
Slabach noted that more than 3,000 rural health clinics and roughly 590 critical-access hospitals are currently participating in an Accountable Care Organization (ACO), in which they coordinate patient services and care. The Centers for Medicare & Medicaid Innovation (CMMI) also recently released program guidance on its initiative called the Long-term Enhanced ACO Design (LEAD) Model that hopes to attract rural providers to apply, he said.
Public and private entities are also working to increase access to care. Examples include treating patients on site rather than transporting them to the hospital, utilizing more nurse practitioners or other health care professionals to free up time for doctors, and investing in mobile clinics for health screenings and treatments, Pantely said.
“If you want to keep Medicaid costs down, you have to provide transportation to the OB-GYN for low-income [pregnancies] because they can have a transportation problem,” Novak added. More regions are also investing in community health workers paid by insurers to help people navigate the health care system, Lerche said, which can ensure underserved patients receive attention before suffering more severe health problems.
As a separate measure, providers are utilizing technology to reduce barriers to medical access as well. Wearable devices can monitor real-time health statistics and vital signs. Remote ultrasound devices and apps that can potentially diagnose skin cancer have also been in use for years, Novak said.
In North Dakota, she continued, officials launched the state’s Rough Rider Network, which uses “AI technology to identify high-risk patients and give them value-based care.” The state is also investing in broadband infrastructure, which will make telehealth treatment more widely available.
The challenge with remote care is that some conditions, like heart attacks, aren’t treatable with it, Diede said. Moser added that these visits aren’t always reimbursed “at a level that makes it worth the time away from the in-person volume.”
The Rural Health Transformation Program, part of H.R. 1, designates $10 billion each year between 2026 and 2030 to fund health care initiatives, ranging from clinical recruitment to chronic pain management to value-based care and other new payment models.
The grant money will hopefully spark innovation and help surround patients with medical attention from all sides—including care coordinators, nurse navigators, telemedicine, and beyond—Moser said. That would also ensure that physicians’ practices aren’t solely responsible for ensuring that “preventive measures are addressed and taken care of.”
Already, Kansas is planning to launch a hub-and-spoke transport model to help transfer patients from rural hospitals to regional health centers. “We’ll see a significant decrease in the number of patients that get transported by air,” he said.
In the end, actuaries will need to grapple with these proposed and ongoing innovations to offer advice on the best way forward, even though many of the models don’t yet have a track record and their impacts are therefore hard to predict.
In Novak’s view, actuaries are well-equipped to handle that task. “We’re not just mathematicians,” she said. “We’re problem solvers with a lot of math in our pocket to help figure out solutions.”
Academy Participates in Texas Health Care Affordability Hearing
The Academy was invited to testify before the Texas House Select Committee on Health Care Affordability, along with other witnesses, during a two-day hearing in May. The newly created committee in the Texas House of Representatives has been charged with comprehensively reviewing the factors affecting health care affordability in Texas.
The hearing, held April 30 and May 1, was the first in what is expected to be a series of discussions among state legislators, insurers, hospitals, academics, consumers, and actuaries aimed at understanding the underlying drivers of health care costs, identifying affordability solutions within the commercial market, and exploring potential improvements in health care delivery.
Health Practice Council Co-Vice Chairperson Susan Pantely testified at the hearing. Read more in the Actuarially Sound blog post, “Academy Brings Actuarial Perspective to Texas House Committee Hearing on Healthcare,” available on the Academy website at actuary.org.
Noah Kirsch is a freelance writer for Contingencies.