Dire warning: Proposed Medicaid cuts could close rural hospitals
The more than $700 billion in proposed cuts to Medicaid could be devastating to Pennsylvania’s hospitals, health care experts and advocates continue to warn.
Major cuts to Medicaid funding could significantly increase uncompensated care, potentially leading to reduced services and staffing, or hospital closures, especially in rural areas.
More than 3.1 million Pennsylvanians — roughly 21% of the state’s population, including people in long-term facilities, children, pregnant women, and people with disabilities – are covered by Medicaid, the public health insurance that also connects patients to everything from school-based health screenings to addiction treatment and mental health services.
The Medicaid cuts threaten to end coverage for as many as 300,000 Pennsylvanians.
President Donald J. Trump is pushing for a July 4 deadline for Congress to pass his budget reconciliation package, called “One Big Beautiful Bill Act,” which includes slashes to Medicaid funding. The cuts would end health-care coverage for as many 600,000 Pennsylvanians.
“There is no winning for Pennsylvania hospitals in this bill,” said Patrick Keenan, policy director for the Pennsylvania Health Access Network (PHAN), a nonprofit organization that last week released a report on the impact of hospitals if Medicaid is reduced.
In what he described as a “double whammy,” hospitals could be faced with treating an increasing number of uninsured patients while dealing with a reduction in Medicaid reimbursement for services.
Essentially, hospitals will be under increased pressure to treat people with serious illnesses who would have otherwise been treated by primary care physicians, but end up showing up at hospitals sicker, with illnesses or diseases that could have been prevented if they had health insurance available.
“Hospitals are going to struggle to deal with a large number of people who are sick, need care, and show up without insurance,” Keenan said.
And experts worry that rural health care, which is already in a crisis, could be pushed further to a breaking point.
The Hospital and Healthsystem Association of Pennsylvania (HAP) said the proposed Medicaid cuts would put rural Pennsylvanians’ access to care at risk.
“Medicaid is not just a lifeline for three million Pennsylvanians who rely on the program for coverage but is also a critical funding source that hospitals depend on to care for everyone in our communities. Reducing health care coverage makes Pennsylvanians less healthy, increases hospitals’ burden of uncompensated care, and raises health-care costs for everyone,” said HAP President and CEO Nicole Stallings.
About half of Pennsylvania’s 65 rural hospitals – which often care for a greater percentage of patients with Medicaid coverage – are operating at a loss, largely because payments do not reflect the actual cost of providing care, said Stallings.
On average, rural Pennsylvania hospitals – which include UPMC Greene, WVU Medicine Uniontown, and Penn Highlands Connellsville – are reimbursed 74 cents for every dollar they spend caring for patients covered by Medicaid.
“Reducing payments even further or increasing uncompensated care will force more rural hospitals to reduce services or, in the worst cases, close,” Stallings said. “We cannot have healthy, vibrant communities in rural Pennsylvania without strong hospitals. Rural hospitals are top job creators and economic anchors in their communities, and health-care deserts can quickly turn into economic deserts.”
In Pennsylvania’s 14th District, 29,712 people would lose either Medicaid or Pennie insurance, with more than an estimated $270 million in Medicaid dollars lost, according to a PHAN report released last week.
Pennsylvania Gov. Josh Shapiro said the state won’t be able to compensate for significant cuts to Medicaid funding, saying there are no dollars available at the state level to make up for the cuts at the federal level.
According to the Southwestern Pennsylvania Partnership for Aging (SWPPA), 43,981 Washington County residents rely on Medicaid for health coverage. Of those, 36% are children and 33% are seniors, pregnant, or people with disabilities.
Medicaid is a top funder for several critical services in the county, including mental and behavioral health care, school nurses, substance use disorder treatment, community health centers, rural hospitals, in-home care, and nursing homes – in 2022, Medicaid paid $45 million to Washington County’s 12 nursing homes.
SWPPA, which has compiled Medicaid county-specific fact sheets for the region, contends that without the funding that Medicaid brings, counties will see increased health-care costs and wait times, new tax burdens, lost jobs and economic opportunities, and sustained pressure on county and municipal budgets.
Economic consequences, too, extend beyond health care. Proposed budget cuts could affect 477,000 healthcare jobs and impact employees’ local and state economies. Hospitals support 1 in 9 jobs statewide and deliver a $186.5 billion economic impact, according to HAP.
For example, there are 2,355 people employed in Washington County’s 66 “nursing and residential care facilities” who earn $98 million annually in wages, according to SWPPA data.
“This is a step backward, for sure, in every way. For the individuals who will be impacted, and for the hospital system, it will be very bad,” said Joe Angelelli, president of SWPPA.
Even people who aren’t on Medicaid should be alarmed, said Keenan.
“If there are people out there saying, ‘Hey, I’m not enrolled in Medicaid or Pennie, this doesn’t affect me,’ it does because if these cuts happen, you’re going to be impacted by longer wait times, fewer appointments available, fewer community-based services, less staffing, less care being available, and other limitations to access to hospitals,” said Keenan.
HAP is urging members of Congress to reject cuts that would diminish the health and competitiveness of Pennsylvania’s rural communities.
PHAN is encouraging individuals to contact their elected officials regarding a Medicaid bill, emphasizing the importance of protecting funding and services for those who rely on Medicaid.
“There is a large number of folks on Medicaid in the 14th District who would lose coverage and there’s more than $270 million in Medicaid dollars at risk of being lost,” said Keenan. “Contact senators (John) Fetterman and (Dave) McCormick, get in touch with Rep. (Guy) Reschenthaler and let them know how concerned you are about the bill. This impacts everyone.”
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Medicaid by the numbers
In Washington County, 43,981 Washington County residents rely on Medicaid for health coverage. Of those, 36% are children, and 33% are seniors, pregnant, or people with disabilities.
In Greene County, 9,618 Greene County residents rely on Medicaid for health coverage. Of those, 37% are children, and 33% are seniors, pregnant, or people with disabilities.
In Fayette County, 40,175 Fayette County residents rely on Medicaid for health coverage. Of those, 41% are children and 33% are seniors, pregnant, or people with disabilities.
Source: SWPPA