REGIONAL— Scenic Rivers Health Services CEO Keith Harvey expressed incredulity this week in the wake of passage of a U.S. House spending and policy bill that would make dramatic cuts to Medicaid and, by extension, to community health centers and hospitals, particularly in rural parts of the country.
“For an organization like ours, or for the Cook Hospital, this would be devastating,” Harvey said. “I still can’t believe it can possibly pass.”
The measure will still need approval from the U.S. Senate, and such passage is unlikely in the bill’s current form. But the prospect of deep cuts in Medicaid has advocates of health care services for rural residents on edge.
While the Medicaid cuts would fall hardest on single adults of working age, the impact to users of community health centers and rural hospitals could well be significant. Jonathan Watson, director of the Minnesota Association of Community Health Centers, says health centers, like Scenic Rivers, can expect a 20-percent reduction in funding if the cuts in the House bill are enacted into law. Watson estimates that about 2,500 patients currently served by Scenic Rivers would lose Medicaid eligibility as a result of the House changes. Those individuals would either stop seeking most types of primary care, or would be unable to afford to pay for services, putting financial strain on the nonprofit community health centers operated by Scenic Rivers across northern Minnesota.
“It’s going to create a lot of tough choices,” said Watson. “I would say this really is doom and gloom and we are hoping that the Senate can modify this. “Otherwise, for rural health care, I really think this will be tragic at best.”
While community health centers would be among the hardest hit, Watson said rural hospitals would also be hit hard because such a high percentage of their patient load is covered by Medicaid.
Work requirements
Most of the reduction to Medicaid spending under the House bill is slated to come through the implementation of work requirements for able, working-age adults. While the public generally supports work requirements, implementation of such rules in some states in recent years, have found that the change does little to bring people back into the workforce. Instead, notes Watson, the often intense and complicated paperwork gauntlet associated with work requirements typically pushes many individuals who are working and qualified for coverage off of Medicaid.
The non-partisan Congressional Budget Office, or CBO, estimates that the implementation of a work requirement will push just over 8 million current Medicaid recipients off the rolls over the next ten years. Other changes are expected to increase the total number of uninsured individuals in that same period to 13.7 million, according to the CBO. That amounts to about 170,000 additional uninsured in Minnesota, based on an analysis by the Kaiser Family Foundation.
Across the state, Watson estimates that about 50,000 people who regularly receive care through community health centers will lose Medicaid coverage if the changes in the House bill are eventually signed into law.
That will affect those individuals most directly, but the loss of revenue to the health center clinics and rural hospitals is likely to impact all patients, notes Watson, as facilities are forced to operate with less funding. Scenic Rivers’ Harvey said Watson advised him to expect a 20-percent reduction in Medicaid funding if the House bill is enacted as recently passed. “For us that’s more than a million dollars a year,” said Harvey. “That’s huge for us.”
But Harvey notes that Scenic Rivers won’t be the only health system in the region to feel the pain. “This will affect Essentia, it will affect St. Lukes, and Fairview, right on down the line,” he said.
Fearing the future
Harvey worries that the Medicaid changes, combined with the phaseout of enhanced premium tax credits for private insurance on the online marketplaces created by the Affordable Care Act, has the potential to put the country back where it was before the passage of the ACA, with a huge and growing uninsured population. Such an outcome could force systems like Scenic Rivers to make hard choices about the services they can offer and how many clinics they can sustainably operate.
Passage of the ACA and the additional revenue stream it created by expanding insurance coverage for patients was a key factor in the ability of Scenic Rivers to open and operate its clinic in Tower, for example. Health care advocates worry that gutting that revenue stream could well force entities like Scenic Rivers to backtrack on the progress they’ve made in recent years, limiting services and possibly closing clinics.
Harvey said advocates for rural health will need to organize to fight the changes. “There is at least some time to build grassroots coalitions,” he said.
Harvey was hesitant to talk specifically about the potential impacts of the Medicaid cuts, noting that even suggesting cuts in services or possible closure of clinics can create stress throughout their health system.
What’s more, he said he’s still working with a lot of unknowns, such as whether the state of Minnesota will fill some of the funding gap or whether any new sources of funding might be approved at the federal level. “Ultimately there is going to be a reduction in income,” he said. “And we have a pretty tight margin already.”