Leaders from four of the nation’s largest Catholic health systems — Ascension, Trinity Health, Providence and SSM Health — are sounding the alarm on proposed changes to Medicaid and the ACA marketplace, warning that the legislation would jeopardize access to care for millions of Americans and destabilize an already strained healthcare system.
Together, the four health systems serve patients in 39 states and represent a significant portion of the country’s healthcare safety net. During a May 20 media briefing hosted by the Catholic Health Association of the United States, executives outlined the human, operational and financial toll of the proposed cuts, calling on Congress to reconsider.
“Among the most troubling aspects of the legislation are changes to work requirements, provider tax policy, state directed payments and retroactive coverage provisions,” Sister Mary Haddad, president and CEO of the Catholic Health Association of the United States, said. “These provisions could result in coverage losses for millions of people, creating new administrative barriers for families, providers and states.”
Providence: We are facing a “polycrisis“
Erik Wexler, president and CEO of Renton, Wash.-based Providence, argues that U.S. healthcare is at an “inflection point” and faces a “polycrisis”driven by inflation, labor shortage, tariffs, but most concerning, the proposed Medicaid cuts being discussed on Capital Hill.
“We have reduced an enormous amount of discretionary spend, which, when it was spent, seemed like the right thing to do. But it’s just not an option any longer,” Mr. Wexler said. “We have reduced our [full-time equivalents] significantly, and we are facing further labor reductions if these cuts go through. The concern is when those cuts happen and those FTEs are reduced, it resets healthcare in a way that affects the entire population.”
Medicaid cuts may appear to affect only a subset of the population, but the reality is far broader, according to Mr. Wexler. When programs and services become unsustainable and are forced to close, access to care diminishes for everyone — not just those on Medicaid.
“That’s why we’ve got to focus on this as an ecosystem that must be maintained, and not look at it in a partitioned way,” he said.
Providence operates in seven states and — with a Medicaid mix of about 30% — expects to take a $1 billion hit if the proposed Medicaid cuts are implemented.
“That is a fairly catastrophic cut in a place where we are already not profitable,” Mr. Wexler said. “We’ve been clawing our way back since the pandemic. While we’ve made progress, we still have negative margins and this will further create the pressures.”
Providence, a 51-hospital system, recorded an operating loss of $644 million (-2.1% margin) in 2024, compared to a $1.2 billion (-4.1% margin) loss in 2023.
Trinity Health faces a $1.1 billion-dollar blow
Livonia, Mich.-based Trinity Health warns that the proposed Medicaid cuts could cost the health system up to $1.1 billion across its 93 hospitals.
“[Medicaid] is the coverage for at least 20% of those we serve, on average, with some of our communities exceeding 25% of our patients,” Mike Slubowski, president and CEO of Trinity Health, said “And for our nursing homes and long-term care facilities, it is by far the predominant form of coverage.”
Even at current coverage and funding levels, Medicaid reimbursements fall short of Trinity’s actual cost of care by more than $500 million a year — and that gap would only widen under the cuts currently being considered by Congress, according to Mr. Slubowski.
“Our estimates suggest that we are at risk of operating losses exceeding $1 billion per year if a significant number of those we serve lose their healthcare coverage, combined with the proposed reductions in Medicaid payments,” he said.
To compound the problem, the Congressional Budget Office estimates that at least 7.6 million people will become uninsured and 10.3 million people would lose health coverage by 2034 if the bill in its current form becomes law.
“Employers who provide health coverage to their employees realize that their healthcare costs are high because they, in effect, subsidize shortfalls providers incur serving Medicaid and Medicare patients,” Mr. Slubowski said. “Further cuts to Medicaid funding will create more economic chaos because employers will not accept additional burdens for a government responsibility.”
Mr. Slubowski also pushed back on Republicans’ claims of widespread Medicaid fraud, waste and abuse, and emphasized that administrative burdens like work requirements have proven inefficient and costly in states that have implemented them.
“Let’s be clear; we can’t cut hundreds of billions from Medicaid without hurting people and weakening our communities,” he said. “When people lose coverage, they skip checkups, they stop taking medications, and eventually show up in the ER, sicker and in need of more costly care that could have been prevented. That’s not just bad for health; it strains hospitals, overcrowds emergency rooms and drives up costs for everyone — insured or not.”
Ascension: The burden will shift
St. Louis-based Ascension, which serves communities in 16 states and Washington, D.C,, provided care to 6.1 million people in 2024. Nearly 750,000 of those patients were covered by Medicaid; 350,000 were either uninsured or self paid.
“Of the roughly 75,000 babies that Ascension delivers annually, 41% were insured by Medicaid,” Ascension President Eduardo Conrado said. “[Catholic health systems] like Ascension, Providence, Trinity Health and OSF [Healthcare] cover nearly 34% of the costs for Medicaid patients. Now, if you flip that for the uninsured or underinsured, we absorb roughly 88% of the costs to deliver care for those lives.”
If Medicaid enrollment is reduced, those individuals don’t disappear — they shift into the underinsured or uninsured population, according to Mr. Conrado. Nonprofit health systems care for everyone in their communities, regardless of coverage, which means the financial burden shifts directly onto them.
“In many cases, we cover 85% to 90% of the cost of care [for the uninsured],” he said. “Uninsured enrollment is a financial burden to the nonprofit systems that are already under pressure in many of our rural and inner-city communities.”
Mr. Conrado said Ascension supports lawmakers’ effort to eliminate waste, fraud and abuse from public programs, but argues that proposed legislation making its way through the House does not do that.
“It creates unnecessary red tape which causes eligible people to lose coverage because of paperwork problems and system errors,” he said. “Cuts of this scale would deepen financial pressure on hospitals, shift even more burden to the private sector, and limit access for everyone — not just those covered through Medicaid. Cutting critical services make it harder to hire and keep caregivers, risk hospital closures and limit states’ ability to fund Medicaid using proven tools like provider tax.”
SSM Health: “A crisis in rural healthcare“
Joe Hodges, regional lead executive and president of SSM Health’s Oklahoma/Mid-Missouri market — which includes Wisconsin, Illinois, Missouri and Oklahoma — underscored the risks for rural hospitals.
In Oklahoma, he noted, 70% of hospitals operate at a loss. That figure climbs to 87% in Kansas and 76% in Washington.
“It is a crisis in rural healthcare,” Mr. Hodges said. “Any challenges that are associated with taking away access or funding to rural hospitals will make them even more vulnerable.”
Rural healthcare bears a disproportionate share of the country’s chronic disease burden — with obesity rates 30 percentage points higher and premature death rates 20 percentage points higher than national averages, according to Mr. Hodges. Additionally, 25% of all U.S. veterans live in rural communities.
The reality is when reimbursement declines and fewer paying patients come through nonprofit health systems’ doors, they’re forced to shift those costs elsewhere — often to commercial insurance.
“We have to shift that over to commercial insurance where we would have to negotiate and raise the prices for those rates that, in turn, gets pushed back down to employers,” Mr. Hodges said.
In effect, the financial burden doesn’t disappear; it simply moves “from one bucket to another,” he said.
“And we have to be able to shift that around in order to continue with our mission and provide services to all people who walk through our doors,” he said. “We take care of [everyone], no matter their payer, no matter who they are, or where they’re from. All those things are irrelevant to us. When people need us, we are there. That’s why we’re in Catholic healthcare.”
Policy alternatives: Value-based solutions over cuts
Leaders across all four systems agreed that the focus should shift from blunt funding cuts to value-based models and provider-led accountability.
Rather than routing funds through third parties, they urged federal and state policymakers to partner directly with health systems to manage costs and improve outcomes — bypassing intermediaries and aligning incentives more directly with patient needs.
“Health systems that provide the full continuum of care are very willing to address and take on more alternative payment models in which we can assume total cost of care and outcomes for populations,” Mr. Slubowski said. “We’ve been able to prove through participation in all the Medicare demonstration projects, our own Medicare Advantage programs and in several Medicaid programs, that we can improve outcomes at a lower cost if providers are given that responsibility instead of working for middlemen like commercial insurance companies that first want to burn their margin and are very adept at denying claims of needed care that we provide to people.”
Mr. Slubowski pointed to Trinity’s Program of All-Inclusive Care for the Elderly (PACE) as an example in which the health system has been able to manage the care for seniors with superior outcomes at a lower cost.
“We urge lawmakers to pursue innovative, value-based solutions rather than resorting to funding cuts or eligibility reductions that would harm our most vulnerable communities,” he said.
