Democratic state treasurers from four states are sounding the alarm about the potential consequences of proposed Republican cuts to Medicaid. Not only would these cuts impact state budgets and beneficiaries, but they could also have a devastating effect on hospitals, particularly those in rural areas.
According to the treasurers, many individuals who would lose Medicaid coverage would not be able to afford alternative health insurance options, such as plans available on the Affordable Care Act marketplace. Without Medicaid, these individuals would likely go uninsured, leading to an increase in uncompensated care for hospitals.
The American Hospital Association reported that between 2010 and 2021, 136 rural hospitals across the country closed their doors. Additionally, Time magazine highlighted that nearly a third of rural hospitals were at risk of closure in 2024. This trend is already forcing patients in rural areas to travel long distances to access care, with closures particularly impacting maternity services.
Oregon State Treasurer Elizabeth Steiner, who is also a practicing physician, shared a poignant example of the importance of Medicaid coverage. She treated a man with a heart condition who would have faced sudden cardiac death without medical intervention. This man, a cab driver with a family of five, relied on Medicaid for health insurance. Steiner emphasized that the majority of Medicaid recipients are employed.
The treasurers from Oregon, Colorado, New Mexico, and Delaware highlighted the significant role that federal funding plays in supporting their Medicaid programs. If federal cuts are implemented, states would be forced to redirect funds from other areas of their budgets to sustain Medicaid services. New Mexico Treasurer Laura M. Montoya underscored the impact on tribal communities in her state, while Colorado State Treasurer David L. Young pointed out the potential need to cut other essential programs to support Medicaid.
In Oregon, Medicaid covers one in three residents, including 57% of children and two-thirds of nursing home residents. Steiner warned that the state stands to lose $3 billion if Medicaid budget cuts are enacted. Similarly, Delaware Treasurer Colleen C. Davis expressed concerns about the risk to treatment for individuals with pre-existing conditions.
The treasurers collectively criticized the proposed funding cuts as prioritizing tax cuts for wealthier individuals over essential healthcare services. As Republicans continue to push for significant spending reductions, including $880 billion in cuts over the next decade, the future of Medicaid remains uncertain.
While the recent Continuing Resolution passed by Congress averted immediate cuts to Medicaid, the debate over federal Medicaid spending is far from over. Various options are being considered to reduce Medicaid spending, with the House budget resolution targeting cuts of up to $880 billion or more over the next ten years.
As the healthcare landscape continues to evolve, the impact of potential Medicaid cuts on states, beneficiaries, and healthcare providers remains a critical issue. It is essential for policymakers to prioritize access to affordable healthcare for all individuals, particularly those in underserved and rural communities.
