Hospitals say Medicaid cuts in GOP plan would leave millions without coverage, and force closures

The House GOP spending plan may not have imposed the steep cuts in Medicaid some had feared, but hospitals and healthcare leaders say the proposal would leave millions without coverage.

Bruce Siegel, MD, president and CEO of America’s Essential Hospitals, said the House GOP's plan could lead some hospitals to close.

The House Energy and Commerce Committee, which oversees Medicaid, unveiled a plan that would impose work requirements on some adults. The plan also caps the tax states impose on medical providers, which could prompt some states to raise their own taxes or choose to cover fewer people.

Some conservative Republicans had sought more sweeping cuts in Medicaid funding, but hospitals say the plan would still mean many would no longer have coverage. Healthcare leaders also say the plan would add more financial pressures to hospitals, and that it could lead some hospitals to close.

Bruce Siegel, MD, president and CEO of America’s Essential Hospitals, denounced cutting Medicaid to finance tax breaks and said the plan is “a direct assault on our nation’s health care system.” The organization serves more than 350 safety-net hospitals.

“This proposal, which includes sweeping cuts to the Medicaid program, poses a grave threat to the health and well-being of millions of Americans and to the essential hospitals that serve as lifelines in their communities,” Siegel said in a statement.

Siegel said the proposal would disproportionately hurt those with lower incomes, including Americans living in rural areas. He also suggested that the proposal, if enacted, would lead to some hospitals shutting their doors.

“This unprecedented level of Medicaid cuts would devastate the program, undermining the ability of essential hospitals to provide critical services, including trauma care, behavioral health, maternal health, and public health emergency response. These hospitals, which already operate on thin margins, cannot absorb such losses without reducing services or closing their doors altogether,” Siegel said.

The Congressional Budget Office, a nonpartisan research arm, estimates that the House GOP plans would result in 8.6 million Americans losing coverage. The office suggested a total of 13.7 million more Americans would be out of health coverage by 2034, including 5 million who would lose coverage with the expiration of expanded tax credits that support the Affordable Care Act.

The office also estimated that the plan would cut $715 billion by 2034.

‘A devastating blow’

Rick Pollack, president and CEO of the American Hospital Association, said the House GOP proposal represents a “devastating blow to the health and well-being of our nation’s most vulnerable citizens and communities. There is no avoiding the real-life consequences they will create for hospitals serving our most vulnerable and hard-working families.”

Pollack said in a statement that the reductions “will lead to millions of hard working Americans losing access to health care and many of our nation’s hospitals struggling to maintain services and stay open for their communities. We urge Congress to reject efforts to dismantle this vital program.”

Catholic hospitals, which have been some of the most vocal defenders of Medicaid, said the proposal would hurt many vulnerable Americans.

Sister Mary Haddad, president and CEO of the Catholic Health Association of the United States, said the cuts would threaten access to care for millions in vulnerable communities.

“Congress has a moral obligation to consider the harm that such disastrous cuts would have on America’s health safety net and the impacts this proposal would have for America’s most vulnerable communities,” Haddad said in a statement. “Moreover, the cascading effects of lost coverage, including higher costs and greater strain on the system, will impact nearly all Americans – not just those who rely on Medicaid.”

Hospitals have been pressing Congress for months to preserve funding for Medicaid. Fitch Ratings has warned that substantial cuts to Medicaid could threaten the recovery of nonprofit hospitals.

Haddad said Medicare is “a lifeline” to the communities with the biggest needs.

Details of the plan

President Trump has said repeatedly that he won’t cut funding for Medicaid, but he also indicated he would give states more latitude in managing programs.

Medicaid is a partnership with the federal government and states to provide coverage for those with lower incomes and individuals with disabilities. The federal government has covered 70% of the costs, and states can pay for their share through their budgets or taxes on healthcare providers. The House GOP plan would freeze the provider taxes issued by states at current levels.

The plan would also call for “able-bodied adults without dependents” to work at least 80 hours per month, or engage in community service or educational programs for 80 hours per month, or some combination.

States would also be compelled to impose “cost sharing” requirements on recipients with incomes over 100% of the federal poverty level; the co-pay would be capped at 5% of the individual’s income.

Anthony Wright, executive director of Families USA, said the proposal undercuts Trump’s promises to preserve Medicaid funding.

“After months of promises from President Trump and Congressional Republicans that they weren’t going to touch Medicaid or its benefits, we now have proof in writing that this new GOP budget bill will do just that,” Wright said. “This is the biggest cut to Medicaid ever, and an attack on the health care system on which all Americans rely.”

The proposal would also crack down on Medicaid funding for those who are undocumented and would prohibit the use of Medicaid funds for gender transition procedures for those under the age of 18.

U.S. Rep. Brett Guthrie, R-Kentucky, the chairman of the House Energy and Commerce Committee, said the House GOP plan preserves funding for the most vulnerable. In an op-ed that appeared in The Wall Street Journal, Guthrie said the measures are designed to sustain the program and that Medicaid spending will rise for the foreseeable future.

Guthrie denounced criticisms of the bill as fear mongering.

“This bill refocuses Medicaid on mothers, children, people with disabilities, and the elderly—not illegal immigrants and capable adults who choose not to work,” he said in a statement Monday.

U.S. Rep. Frank Pallone, D-N.J., the ranking Democrat on the House Energy and Commerce Committee, said the proposal isn’t about cutting waste or abuse.

“This is not trimming fat from around the edges, it’s cutting to the bone,” Pallone said in a statement. “The overwhelming majority of the savings in this bill will come from taking healthcare away from millions of Americans.”