WHITE SALMON — As significant cuts to Medicaid, the health insurance system for over 83 million low-income or disabled Americans, come closer to fruition, Skyline Hospital CEO Matt Kollman joined several local medical leaders in warning about the disproportionate impact on rural hospitals and those they serve.
Matt Kollman, CEO, Skyline Hospital
RICHARD HALLMAN
“Hospitals are already struggling,” said Kollman. “If there’s a point where you can’t provide a service safely anymore, you’re just going to stop that service. That service doesn’t just go away for people on Medicaid — it goes away for the whole community.”
In late May, House Republicans passed the “One Big Beautiful Bill Act” that, if passed by the Senate as written, would slash federal Medicaid spending by over $700 billion in the next 10 years, according to the Kaiser Family Foundation (KFF), a leading health policy think tank. The Congressional Budget Office projected that 11 million Americans could lose coverage as a result, including nearly 130,000 Oregonians and 194,000 people in Washington.
Over the past two decades, almost 200 rural hospitals have closed across the country and an additional 300 rural hospitals face “immediate risk” of closure in the coming years, according to the Center for Healthcare Quality & Payment Reform, an estimate calculated before the House finalized its version of the budget bill. While losses from privately insured patients are the primary cause of declining revenues, uninsured patients cause major losses as well, and rural areas have a higher proportion of uninsured people compared to urban areas. Rural hospitals also have a persistent challenge of spreading fixed costs, like equipment and staffing, across a smaller patient volume.
Medicaid plays a critical role in balancing those dynamics, in protecting the financial security of rural hospitals, as demonstrated by trends following Medicaid expansion under the Affordable Care Act (ACA). Taking effect in 2014, the act led to a national decline in the number of uninsured people, but one study found that roughly 80% of rural hospitals that subsequently closed were located in states that neglected to broaden Medicaid.
“Skyline itself is not currently at risk of closing its doors or even shuttering services, but that’s based on what we know today about the federal budget process, and that could change,” said Kollman. “We are relatively strong compared with some others, but we’re still wrestling with low margins.”
Around 20% of Skyline’s patients pay for care through Medicaid. As previously reported by Columbia Gorge News, that figure hovers around 30% for Adventist Health Columbia Gorge and 44% for One Community Health. Across Oregon, the Providence network sees nearly 172,000 Medicaid patients annually.
In a letter to Senators, health experts at Yale University and the University of Pennsylvania warned the bill’s provisions will leaded to 51,000 more people dying across the United States each year.
The federal government bankrolls a varying proportion of traditional Medicaid spending for individual states based on per capita income (59% for Washington, 50% for Oregon), otherwise known as the Federal Medical Assistance Percentage (FMAP). For people qualifying under the ACA expansion, the federal government pays a flat rate of 90% to all eligible states.
During a trip to Washington, D.C., Kollman and a larger coalition urged Sen. Maria Cantwell and Rep. Dan Newhouse to maintain current FMAP rates. While the FMAP for traditional Medicaid spending remains the same, Oregon and Washington would receive 10% less federal funding to cover the ACA expansion group because both states provide health insurance to undocumented immigrants, as previously reported by Columbia Gorge News.
The biggest form of savings, however, comes via enforcing work requirements: Any childless adult without disabilities must work, volunteer or attend school for at least 80 hours per month by the end of 2026. KFF estimates this rule would reduce federal Medicaid spending by $280 billion over the next 10 years.
“A couple of states have tried work requirements for Medicaid, and the data shows that those efforts were probably less effective than those states hoped for,” said Kollman.
Take Arkansas, for example, which became the first state to implement work requirements from June 2018 to March 2019. Studies show that about 25% of those subject to the rule, or 18,000 people, lost their insurance primarily due to confusing reporting processes, and the change had no measurable increase in employment. That’s because, as in Arkansas, most able adults on Medicaid nationally are already working, according to KFF.
“When you talk about waste in healthcare, it does exist, but you have to make sure that you really know what you’re looking at before labeling it as waste,” said Kollman.
The budget bill would also mandate states to redetermine eligibility for ACA adults every six months, stop coverage for gender-affirming care for transgender people and reproductive care through Planned Parenthood, reduce minimum staffing standards in nursing homes, and not extend ACA premium tax credits that allowed more people to purchase insurance, which will causing an additional 5 million people to lose their coverage across the U.S.
Now in the Senate, Republicans say they hope to pass the budget bill by July 4, but the House must sign off on any changes made before it reaches President Trump’s desk.
“Some people will just defer care — they won’t get it. Others, maybe in more serious situations, will still show up at our front door,” said Kollman, if the cuts occur. “We will still treat them, but we’ll get nothing.”
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