The Republican-backed proposal calls for at least $880 billion in spending reductions through 2034, with Medicaid widely expected to bear the brunt of these cuts. Hospital leaders across the country have urged lawmakers to reconsider the legislation.
In a Feb. 25 statement shared with Becker’s, America’s Essential Hospitals said that it was extremely disappointed that the House passed the bill, arguing that it will open the door to “unacceptable and damaging cuts to Medicaid and Medicare.”
“This budget resolution will open the door to devastating Medicaid cuts that will impact millions of Americans, especially those middle-to-low-income working Americans in both rural and urban communities, who rely on Medicaid to access critical healthcare services,” Bruce Siegel, MD, president and CEO of America’s Essential Hospitals, said. “This budget resolution, and its directive for the House Energy and Commerce Committee to cut $880 billion dollars of federal spending, will slash the Medicaid program and threaten to discontinue life-saving safety-net services in many communities.”
Medicaid and the Children’s Health Insurance Program, which provide health insurance coverage to almost 80 million Americans, are jointly funded between the federal and state governments. The federal government matches state Medicaid spending through a formula called the Federal Medical Assistance Percentage, which varies by state.
Medicaid alone provides healthcare coverage to about 72 million Americans, and reduction in funding could destabilize healthcare access nationwide. Medicaid cuts could leave many hospitals struggling to operate, particularly in rural areas where Medicaid is a financial lifeline. The potential Medicaid cuts come at a time when 432 rural hospitals are already at risk of closure.
While the specific mechanisms for achieving the proposed budget reductions remain unclear, previous proposals have suggested adding work requirements for Medicaid enrollees or reducing the FMAP, which helps states finance their Medicaid programs.
Hospital leaders nationwide are urging Congress to reject the measure, warning of dire consequences for patients and providers, particularly in rural communities and among children with complex health needs.
“On behalf of the hospitals, nurses, doctors and those who care for and serve the needs of the 72 million patients that rely on Medicaid, we urge you to consider the implications of hinging the budget reconciliation bills’ fate on removing healthcare access for millions of our nation’s patients,” American Hospital Association President and CEO Rick Pollack said.
For children, the stakes are especially high. The Children’s Hospital Association warned that cuts could drastically reduce provider availability, increase wait times and limit essential services for the 37 million children enrolled in Medicaid.
“Slashing funding would mean fewer healthcare providers, fewer services and longer wait times for patients who already face significant barriers to care. These cuts will impact the 37 million children on the Medicaid program, including nearly 50% of children with special healthcare needs, 3 million children in military-connected families, and more than 40% of children living in rural areas and small towns. Patients in rural communities would be hit especially hard, as hospitals and clinics in these areas rely heavily on Medicaid funding to stay open,” Matthew Cook, President and CEO of CHA, said. “Now is the time to strengthen access to care, not put it at risk.”
The impact on rural communities is a major concern. Many hospitals in small towns and underserved areas depend heavily on Medicaid reimbursements to keep their doors open. With fewer resources, hospitals may be forced to scale back services or even close, exacerbating healthcare disparities.
Chip Kahn, president and CEO of the Federation of American Hospitals, also criticized the budget resolution, highlighting its contradiction with previous assurances from the Biden administration.
“The President rightly made it clear that Medicaid is out of bounds for cuts when he said, ‘it’s not going to be touched,’ but the House budget resolution would drive a hole through that pledge,” Mr. Kahn said in a Feb. 25 statement.
“Medicaid is a federal-state partnership, and slicing hundreds of billions of dollars from federal funding will force states to cut the care children and families depend on or raise taxes on hardworking Americans to keep the care,” he said. “Neither of these options will make America healthier, lower costs for families or boost our nation’s economy. Congress should go back to the drawing board and craft a resolution that meets its agenda without cutting the care of millions of Americans and threatening access to 24/7 hospitals.”
