REGIONAL— The ongoing budget-making in Washington, D.C., could have a major impact on the health care available to low-income children, families, and the elderly across the North Country.
While the specifics of the possible cuts to health care programs, such as Medicaid, will be hashed out in budget negotiations over the next few weeks, those involved in the operations of federally funded community health centers and area nursing homes are deeply concerned about the impact of the cuts currently being discussed.
Health care funding in America is complicated, with a mix of public and private funding sources, percentages of which can vary significantly depending on the region. Rural parts of the country could be among the hardest hit, however, since they tend to rely more heavily on programs like Medicaid, known as Medical Assistance in Minnesota, and the Childrens Health Insurance Program, or CHIP, than urban areas.
Since President Trump had promised not to cut Medicare, the health care program that predominantly serves seniors, that leaves Medical Assistance to potentially take the brunt of the potential cutbacks.
“Some of the proposals out there would be catastrophic,” said Jonathan Watson, CEO of the Association of Minnesota Community Health Centers.” Watson, who was in Washington, D.C. earlier this month, has been watching most closely the work of the House Energy and Commerce Committee, which has been tasked with finding $880 billion in cuts under its jurisdiction, which includes the Medicaid program. Watson said those reductions, which would be implemented over ten years, could come in several forms, such as changes in the funding formula that would force states to pay more of the cost. They are reportedly also considering work requirements, which have the effect of dropping coverage for the least capable individuals. “It becomes a ‘how good are you at filling out paperwork?’ issue,” he said.
The impact of the cuts currently under consideration would almost certainly be felt most dramatically in places like Tower, Ely, and Cook, which are served by federally funded community health centers or area nursing homes that rely heavily on Medical Assistance to fund care for the elderly.
In St. Louis County, for example, approximately 21.2 percent of non-elderly patients rely on Medical Assistance or CHIP, and it’s as high as 21.8 percent in Itasca County. By contrast, only about 14.2 percent of non-elderly patients in Hennepin County rely on Medical Assistance or CHIP. That’s according to the recent analysis put out by the Georgetown University McCourt School of Public Policy.
Many rural patients on Medical Assistance or CHIP rely heavily on community health centers, like those operated by Cook-based Scenic Rivers for their primary care, be it medical, dental, or behavioral. Across the state, about 180,000 Minnesotans rely on community health centers for their care, according to Watson. These centers serve patients on Medical Assistance and other types of insurance, as well as the uninsured, who are typically served with minimal or no charge. Of patients served by community health centers in Minnesota, about 46 percent have coverage through Medical Assistance.
The expansion of Medicaid as part of the Obama-era Affordable Care Act, sharply reduced the number of Americans living without health insurance and it allowed for the spread of community health centers, since it meant they served fewer patients who lacked the ability to pay. While Medical Assistance typically pays less than the cost of providing care, it still provides substantially more in terms of reimbursement than those who are uninsured.
Such facilities operate with minimal margins, so the loss of coverage by Medical Assistance or CHIPS, which will push more patients into the ranks of the uninsured, has the potential to devastate these clinics.
“In a short time, community health centers would not be able to stay in existence,” said Wende Nelson, of Ely, who serves as board vice president for Scenic Rivers. Nelson also served as CEO of a community health center in Duluth for many years before her retirement.
While community health centers will likely be the first to see the impact of cuts to Medical Assistance and CHIP, Nelson said rural hospitals would not be far behind.
“Everything is hooked together in the health care system,” she said. “The kind of impacts we’re likely to see with community health centers will also impact rural hospitals. The whole health care system would be massively impacted. We would lose rural hospitals and rural clinics. It would be ugly.”
Nursing homes would be hit hardest of all
While Medical Assistance is often associated in the public’s mind with poor families, the bulk of this federal spending, in fact, goes to keep elderly residents in nursing homes. According to Kaylee Hoard, the CFO of the Cook Hospital and Nursing Home, about 60 percent of the nursing home residents there rely on Medical Assistance to pay their cost of care.
“Funding cuts of any kind would be detrimental to our facility, as the care center already runs at a loss per resident day,” said Hoard.
The Cook nursing home is hardly an exception, notes Nelson. Of all the pieces of the health care system, said Nelson, nursing homes are the most fragile financially, and that’s particularly true of nursing homes in small communities, where a relatively limited number of residents often fail to cover the overhead costs of maintaining a facility. The Cook nursing home, for example, is a 28-bed facility that currently serves 23 residents.
As the Timberjay reported last August, both the Cook nursing home and the Boundary Waters Care Center in Ely received emergency state funding for the next two years to help keep their doors open. But those extra funds were approved by the Legislature at a time when the state budget was flush. With much tighter budgets predicted in the next few years, Cook Hospital and Nursing Home CEO Teresa Debevec said she isn’t optimistic about any extra help in the near future.
Minnesota, like other comparatively wealthy states, already pays a higher percentage of Medicaid costs than most states, particularly states in the South where the federal government picks up a much higher share of the cost. That makes it less likely that the state can be expected to backfill federal cuts in any meaningful way.
Local economies would be affected
While the prospect of deep Medicaid has, to date, focused most of the attention on patient impacts, Nelson notes that the loss of health centers, hospitals, or nursing homes could be economically devastating in small communities. The health sector is, by far, the largest employer in many rural regions, including northeastern Minnesota, where one-out-of-every-four workers is employed in the health care sector. “This could seriously affect the rural economy,” said Nelson, as facilities begin to layoff staff or shutter completely due to the cuts from Washington.