By Anna Kaminski, Kansas Reflector
TOPEKA — A hiring freeze, deferred wage raises and delayed hospital maintenance are all on the table at the Hutchinson Regional Health Center as chief executive officer Benjamin Anderson and his team weigh the potential impacts of a federal budget bill that would axe Medicaid, forcing rural hospitals in Kansas to shutter.
Federal lawmakers are scrambling to approve the massive bill, which is replete with major tax cuts and public program reductions, before the Fourth of July. Since the One Big, Beautiful Bill Act was first proposed, Medicaid has been slated for billions in cuts, which has caused advocates and health providers to warn communities and elected officials of dire consequences.
Across the country, rural hospitals will face $70 billion in cuts over the next decade under the current version of the bill.
A report from the National Rural Health Association and Manatt Health, released Tuesday, found that rural hospitals will lose 21 cents out of every dollar they receive for funding Medicaid, the joint state and federal public health insurance program that serves more than 360,000 Kansans.
Kansas is now set to lose more than $4 billion in Medicaid funding if the bill passes in its current form, according to updated estimates from the Hutchinson-based United Methodist Health Ministry Fund. The total losses increased by nearly $280 million after changes to the bill in the U.S. Senate.
Cuts to Medicaid are “best done with a scalpel and not with a machete,” Anderson said during a Tuesday press briefing hosted by the rural health association.
Anderson said he is interested in stewardship of federal funds, but cuts to Medicaid aren’t the right way to do it. Those cuts don’t just threaten the accessibility of the health care system for those on Medicaid but for the entire system, he said.
“Cutting Medicaid actually doesn’t save money because it sends people into the emergency department, where they get the most expensive and inefficient and inappropriate care for their ailment,” he said.
Difficulty accessing quality care, inadequate insurance and existing financial distress are already playing out in the Hutchinson Regional Health Care System, Anderson said. The hospital in Hutchinson, which serves around 100,000 people in central Kansas, must prepare for federal cuts while cutting its own budget by $7.5 million, along with shouldering costs for people without insurance.
“The story of Hutchinson, Kansas, is the story of middle America,” Anderson said.
More than half of rural hospitals in Kansas are at risk of closing, and the report found that Kansas would experience a 15% reduction in total rural Medicaid hospital reimbursement under the proposed bill. Plus, 5,000 rural Kansans enrolled in Medicaid are expected to lose coverage, according to the report.
The proposed bill passed the U.S. House by a one-vote margin May 22. The U.S. Senate is expected to conduct negotiations this week.
Cindy Mann with Manatt Health, an arm of a national law and consulting firm, said during the press briefing that the cuts to public programs, including Medicaid, within the proposal are designed to reduce spending to partially offset the costs of lost revenue from tax cuts.
“In some states, the cuts are really big, and in other states, they’re bigger,” she said.
Half of all children and one in five adults in rural communities across America rely on Medicaid. Half of all births in rural communities are paid for by Medicaid, according to the report.
All the while, rural health providers are struggling to keep their doors open, Mann said.
The Kansas Republican Congressional delegation has been publicly supportive of the One Big, Beautiful Bill Act. Other Republicans, including U.S. Sen. Josh Hawley of Missouri, have said they won’t vote for a bill that cuts Medicaid benefits and targets rural hospitals, according to reporting from Stateline. The U.S. Senate could create a rural hospital stabilization fund to mitigate Medicaid cuts, but specifics on negotiations have yet to be released.
One of Craig Thompson’s greatest fears is what federal cuts might do to maternity care access. Mothers on Medicaid are nearly three times more likely to experience a bad health outcome than a mother on commercial insurance, said Thompson, CEO of Golden Valley Memorial Healthcare in Clinton, Missouri.
Twelve rural hospitals have already closed in Missouri in recent years.
“But that doesn’t really tell the full story,” he said.
At existing care facilities in the state, shifts in the type of care offered have created a lack of health services in rural communities, especially when it comes to maternity care. A similar story has played out in Kansas, where maternity care deserts are commonplace in rural areas.
As CEO of the HCC Network, a collection of six community health centers serving rural areas in Missouri, Toniann Richard often uses the term “whack-a-mole” to describe the necessary approach to the everyday challenges of being a health care leader.
She also used the term to characterize the feeling patients experience when they lose their coverage, which is expected to become more common under the federal proposal. They don’t know what to do, Richard said.
Based on Richard’s unit cost of health care analysis, the fewer people who are insured, the higher the cost of health care will be.
Alan Morgan, CEO of the National Rural Health Association, said the federal proposal threatens the viability of rural facilities by eliminating Medicaid coverage and reducing access to care for rural patients.
“It’s very clear that Medicaid cuts will result in rural hospital closures, resulting in loss of access to care for those living in rural America,” he said in a press release.
An updated analysis commissioned by the United Methodist Health Ministry Fund and REACH Healthcare Foundation and conducted by Manatt Health predicts Kansas will lose a combined $826 million in federal and state Medicaid funds in the first year of cuts and $4.05 billion over 10 years. Of that total, Kansas hospitals are expected to lose $664 million in state and federal Medicaid funding in the first year and $2.8 billion over 10 years.
Based on updated modeling, about 13,000 fewer Kansans, both urban and rural, would be able to enroll in Medicaid, which could lead to increased uninsured rates, according to the analysis.
David Jordan, president and CEO of the health fund, encouraged lawmakers to strengthen rural health systems instead of weakening them through the proposal.
“Our hope was for the Senate to protect rural hospitals and minimize coverage loss,” he said in a news release. “However, the plan the Senate is rushing through the process will cut $4 billion from our Medicaid program and make it harder to sustain health care in rural Kansas communities.”
Brenda Sharpe, president and CEO at REACH Healthcare Foundation, said rural hospitals will be uniquely challenged if Medicaid cuts pass. They are often sole sources of preventative care, prenatal visits and mental health support. The cuts put entire communities at risk, she said.
Sixty-three rural hospitals in Kansas are facing closure, and 87% of hospitals in Kansas are operating in the red, according to the fund. Twenty-six are at immediate risk of closure.
“Without them,” Sharpe said, “families may be forced to go without care altogether.”
