Medicaid Cuts could have a “drastic impact” on suppliers

Sinai Chicago, a health network of the safety network located on the south and western sides of the city, serves patients who could face life expectations of many years shorter than residents of the city who live a few kilometers away.

Most patients are African-American and Latinos and are faced with greater impacts of chronic diseases and worst health results, said Ngozi Ezike, president and chief executive officer of Sinai.

“This gives us an excellent opportunity to try to reduce these health disparities between individuals who are in our community and those who are a few kilometers from there who benefit from many years of life and better quality of life,” she said.

As such, Medicaid is a “critical” payer for the health system, according to Ezike. About 70% of supplier patients are registered in the public insurance program for low -income Americans – a large part compared to Illinois as a whole, where around 25% of residents are covered by Medicaid.

Today, Sinai, as well as suppliers across the country, are faced with the potential repercussions of security-cleaning cuts currently under study at Congress.

Limiting the Flux of Dollars Medicaid would have a considerable impact on service providers, in particular those who serve a higher number of low -income people, hospitals in rural communities and long -term care providers that are already on the program, according to experts.

Medicaid has a wide range, representing approximately one fifth of hospital care spending and more than 60% of long -term care services, according to the KFF health policies research company. Some providers may need to reduce services, dismiss staff or consider a sale to restrict the impact, according to experts.

Sinai, for example, has built emergency plans to ensure that the health system can maintain its operations, which could include service cuts, said Ezike.

“We understand that we may have to provide less care – to cut and minimize our losses – rather than continuing to do everything and providing nothing in the long term,” she said.

Transfer costs to states

Last month, Republican legislators approved a budgetary plan which called the Chamber’s Energy and Trade Committee, which oversees Medicare and Medicaid, to find $ 880 billion in savings.

The resolution did not appoint Medicaid, but the legislators would find it difficult to find cuts of this magnitude without reducing the financing of the program. The target of $ 880 billion is probably impossible to achieve without reducing the main health care programs as the Office Budget Congress Committee.

The legislator method to reduce expenses for Medicaid is not yet clear, although the energy and trade committee should meet next week to mark its part of the reconciliation package and legislation on the hasd.

Most of the plans considered to reduce Medicaid involve travel costs in the States, said Edwin Park, a research professor at the Georgetown University McCourt School of Public Policy, during a round table held last month by journalism from the University of South California Annenberg.

For example, the congress could place a ceiling per capita on the growth of federal spending for Medicaid. Over time, states will receive less money by registration of the federal government, increasing financial pressure to reduce providers’ payment rates or reduce services, said Alice Burns, director associated with the KFF program on Medicaid and the non-assured.

Legislators could also establish a ceiling on federal expenses only for registrants covered by the expansion of Medicaid, where most of the States have expanded the eligibility for the security insurance program under the affordable care law.

Other options include restrictions on providers’ taxes – where states take taxes on providers and use income to increase state financing share, which the federal government corresponds – and eligibility and renewal changes, such as work requirements.

The work requirements, which equalize the eligibility for Medicaid at work, education or volunteer hours, could lead to the loss of coverage of the beneficiaries, although some may re -register in the program, said Burns. Many registrants may not know that they have been removed from the program until they go to the doctor or try to fill in a prescription, potentially leaving suppliers to the hook for unpaid care, she added.

Medicaid finances a significant part of health spending

Personal health expenses by the payer, 2022

States must also balance their budgets, unlike the federal government, leaving them to increase taxes, reduce other parties of their budgets or Slash Medicaid, said Park. This could include the reduction in providers’ rates, limiting eligibility or reduction in advantages.

The cuts could cause large coverage losses. Millions of people could lose Medicaid or become not insured if the congress implements ceilings per capita or limits taxes on suppliers, according to an analysis published this week by the CBO.

“It would be every state to make the painful decisions they must make to balance their budgets,” said Park.

“ Drastic impact ” for suppliers

The size of the potential cuts – perhaps hundreds of billions of dollars – means ramifications for providers, said Burns.

“No matter how you cut the program, the cuts of this size imported,” she said.

The cuts could come because many providers always recover from the cocovid-19 pandemic, when the hospital margins have shrunk while the facilities faced increased expenses for the workforce and the supplies.

Although the financial performance of many hospitals has improved from 2023, the recovery was uneven – including for hospitals which counted more on Medicaid.

The operating margins were 1.7% and 2.3% respectively for hospitals with high drugs from Medicaid in rural and urban areas, according to a KFF analysis. In comparison, operating margins in all hospitals were 5.2% in 2023.

After Covid, many hospitals were already trying to find efficiency and reducing spending, said Mary Haddad, president and chief executive officer of the Catholic Health Association, which represents Catholic hospitals and other suppliers.

“We recognize the fact that we have finished resources, and we will have to understand how we will continue to provide care to those who need it most,” she said. “It will have a drastic impact.”

Hospitals will seek to reduce costs, potentially in dismissing workers or by reducing services, said John Fanburg, director and president of health care law at Brach Eichler. Doctors’ practices could close their doors, or they could try to sell for greater health systems or investment capital companies.

The impact will be worse for providers who serve a higher number of Medicaid patients, said Fanburg. If Medicaid is a larger part of its budget, the more the system will be concerned “because a decrease of 5% has important implications if Medicaid pays $ 10 million per year”, “,” Fanburg said. “Where do you find that?”

Rural hospitals could also be hardly affected by Medicaid cups, as these suppliers tend to have thinner margins and are more likely to operate in the red, said Zachary Levinson, project manager of the KFF project on hospital costs.

And if their patients are losing coverage, the costs of their care could fall to providers. Many community health centers – which offer primary care to a low -income population where half of the patients are on Medicaid – already operate with negative margins and limited days in cash, said Kyu Rhee, president and chief executive officer of the National Association of Community Health Centers.

“The health center must bear these costs. And if you don’t have the money to pay for it, what do you do? With this negative level of margin and not much money at hand, you are actually forced to let people go or close sites,” he said.

Meanwhile, if the beneficiaries lose coverage, they can avoid looking for health services due to the potential cost – exerting additional pressure on other parts of the health system.

Before the ACA passes, many patients used the emergency service for primary care, said Haddad. This sometimes caused overcrowding in emergency services or delayed care for more sick patients-and could make a resurgence if Medicaid is cut, she said.

Ezike du Sinai is worried that MEDICAIDE COUPTE, in addition to hitting the health system, could stop through the security safety ecosystem. Other suppliers refer patients to Sinai because the health system offers a range of specialties that others may not be able to offer, such as a high -level neonatal intensive care unit.

And if there are cuts, some small security networks could close, she said.

“This would continue this spiral to ensure that people do not receive care and then only present much more advanced diseases, which caused very worse results,” said Ezike. “This gap of life expectancy that we actively work to restrict will actually be able to worsen.”