WASHINGTON — Alabama’s hospitals are warning that cuts to Medicaid and the expiration of the Affordable Care Act’s enhanced premium tax credits will harm the state’s already strained health care system.
Struggling rural hospitals will be especially susceptible to the changes proposed in President Donald Trump’s megabill that will cut taxes and slash spending, advocates say. Loretta Wilson, CEO of Hill Hospital in rural York, Ala., said any cuts to Medicaid will be difficult for her hospital to overcome.
“The hospitals are not going to survive,” Wilson said during a recent online conversation hosted by U.S. Rep. Terri Sewell, D-Birmingham. “If we are not here, it will be detrimental, not only to the individuals, to the ambulance services, etcetera.”
Hill Hospital is one of five at-risk rural hospitals in Alabama that Senate Democrats consider the most likely to be negatively impacted by the reconciliation bill. The hospitals on the list either meet the criteria by being a top Medicaid provider or by having negative margins for three consecutive years. Hill Hospital falls into the top Medicaid provider category, according to the Senate Democrats’ list.
Community Hospital in Tallassee, Marion Regional Medical Center in Hamilton, Lawrence Medical Center in Moulton and Bullock County Hospital in Union Springs are the other Alabama hospitals on the Democrats’ most at-risk list.
“If we are considering making America healthy again, there is no way we’re going to be able to do that if our people, whether you’re rural or urban, Black or white, if we do not have access to health care, if we do not have rural hospitals or hospitals in general, where individuals can get the care that they need, there is no way America will be healthy,” Wilson said.
Sewell said the bill would be a “gut-punch” to hospitals.
Since Alabama has not expanded Medicaid, some of the health care cuts in the bill won’t be as deep as they will be for expansion states.
Current language in the Senate draft freezes the current 6% provider tax rate for states like Alabama that didn’t expand Medicaid under the Affordable Care Act.
That alone may not impact Alabama, Danne Howard, deputy director of the Alabama Hospital Association, told ADN, but questions remain.
“What we will have to closely look at, and what the unknown is, is what the regulatory guidance will be,” Howard said. “So, depending on the regulatory guidance, it could.”
U.S. Sen. Tommy Tuberville, R-Ala., said he didn’t have any issues with freezing the provider tax at current levels for non-expansion states.
“For us that didn’t expand Medicaid, it’s good,” Tuberville told ADN. “There’s not really any pressure on us unless they change the percentages.”
Forty states that did expand Medicaid under the Affordable Care Act are looking at “significant decreases” and have until 2031 to get their provider tax to 3.5%.
“It’s going to have a negative impact on a majority of the country,” Howard said.
The association has questions about how the provider rate reduction could impact Medicaid expansion efforts, which it has helped lead. If that meant a 3.5% provider rate, that would be an issue “we likely couldn’t overcome,” Howard said.
Association President Dr. Don Williamson said the Senate’s proposal disincentivizes Medicaid expansion in several ways.
The proposal also does away with a 5 percentage point federal funding bump for two years for states like Alabama.
“There will no longer be an enhanced rate for a state to expand now,” Howard said about the current Senate language.
Howard said that won’t prevent expansion efforts in Alabama, but it will mean a new revenue stream will be needed.
Last year, the association and other advocates pitched a public-private Medicaid expansion proposal called All Health that factored in that increased federal payment.
“If (the Senate bill passes intact) we will have to approach that differently, there will have to be a revenue stream from somewhere.”
It’s too early and there are too many unknowns to start estimating amounts for that revenue stream, Williamson said.
Williamson and Howard agreed their biggest concern with the bill in the Senate is that it doesn’t extend the Affordable Care Act’s enhanced premium tax credits that expire at the end of the year. Congress expanded eligibility for the credits in 2021.
Alabama Daily News reported earlier this month that credits help make health insurance more affordable on the marketplace. Premium costs for enrollees are expected to rise without an extension of the credits.
“At the end of this year, about 170,000 Alabamians will no longer have health care plans that are subsidized through the marketplace,” Howard said. None of those people qualify for Medicaid, Howard said.
“The best guess is the majority of those will not be able to afford or won’t go get another plan in the marketplace,” Howard said. “So we just substantially added additional uninsured individuals who need health care services and uncompensated care provided in our hospitals at a time when we’re already more fragile than ever.
“And most importantly, you’re taking away access to health care for people who need it, so what are we doing to our health outcomes?”
Dr. Mehmet Oz, the Center for Medicare and Medicaid Services administrator, joined Senate Republicans last week to defend the proposed cuts. Speaking at a press conference, Oz defended the changes to the provider tax and state-directed payments, the latter of which are not used in Alabama.
“Well, the details of the language are up to the leadership, but the specifics, the framework of addressing the legalized money laundering with state-directed payments and provider taxes must be in this bill,” he said. “It should be in the bill, and I believe it will be in this bill.”
Wilson said Hill Hospital has gone through tumultuous times to keep its doors open for the residents of Sumter County, but she said Medicaid cuts would make it much harder to continue its services.
“If Medicaid is — not go away — if it’s just reduced, if it’s slashed, I can’t tell you that I would have a fight in me to continue this journey,” Wilson said.
Senate Republicans want to get the legislation passed by July 4. Any changes made to the bill in the Senate will have to be sent back to the House for a vote, where Republicans’ razor-thin majority could prove difficult for the bill’s fate.
Alabama Daily News’ Mary Sell contributed to this report.