The Danger of the Not-So-Beautiful Bill

Today, I was asked by Newsweek to comment on the adverse impact of the not-so-beautiful bill to dismantle America’s safety net. I had thoughts. Many thoughts. And since I know only a small share of my remarks will make it into the article, I’m sharing them in their entirety here as I watch House Minority Leader Hakeem Jeffries surpass seven hours of speaking in opposition to these draconian cuts that will threaten the survival of hospitals and their patients.

The reality is that to accommodate tax cuts for the wealthy, the cuts have to come from somewhere, and consistent with prior Republican approaches, the cuts are coming from America's safety net programs. One in five Americans relies on Medicaid for their health coverage and one in seven Americans relies on SNAP for their food security, so cutting these critical programs will be devastating. Since some of the Medicaid cuts come through the imposition of a Medicaid work requirement, it's critical to emphasize that 92% of Medicaid beneficiaries are already working or would be exempt. So, what leads them to lose coverage is not noncompliance with work hours, but rather the administrative burdens of documenting their work or exemption. For that reason, the requirement can be better characterized not as a work requirement, but rather as a paperwork requirement. What's more, people who work multiple jobs, have inconsistent hours, or do gig work have particular challenges with reporting and are vulnerable to losing coverage, in turn becoming unable to access needed medical care. And while the requirements technically exempt the disabled, it is notoriously difficult to get on SSI/SSDI — it can take an average of six to eight months, and thus there is notably low take-up — so many people with disabilities will be vulnerable to losing health coverage.

Further, Medicaid paperwork requirements are not costless to implement: the 2018 Arkansas paperwork requirement cost $26.1 to implement for 115,000 people (a far cry from the 9.8-14.8 million covered by the BBB), and Georgia's Pathways to Coverage (which contains an onerous paperwork requirement) has cost its taxpayers around $86 million to cover just around 7,000 people. It's hard to look at these numbers and see the implementation of this requirement as the mark of fiscal conservatism. Some have characterized Medicaid paperwork requirements as a solution in search of a problem, because contrary to some characterizations of people playing video games in basements, most people on Medicaid are working or would be exempt. I don't think it's a solution in search of a problem so much as it is a solution to a different problem: low-income Americans being provided health insurance.

On top of that, the BBB seeks to reduce the federal medical assistance percentage (FMAP) of Medicaid expansion states (in effect, an attack on the Affordable Care Act and not just Medicaid, though Republicans have avoided characterizing it as such), leaving states to pick up more of the tab for Medicaid. This will be difficult for states to accommodate, so they may need to scale back benefits — and on top of that, 12 states have Medicaid "trigger laws," according to which Medicaid expansion is retracted when the FMAP decreases. So, the law shifts tremendous costs to individuals and the states, typically beyond their means, and the result is that many people will delay or forego needed medical care.

There are a number of other key adverse effects. Medicaid is the single largest payer of behavioral health care — that is, care for mental health and substance use disorders — so cutting Medicaid will make it much more difficult for the one in five Americans with mental illness and one in six Americans with substance use disorder to get treatment. Many rural hospitals, including behavioral health centers, are operating in the red, and we've already seen MercyOne close entirely its behavioral health unit at Clinton Medical Center in Iowa. This will only get worse.

The cuts to Medicaid will also have dire consequences not only for Medicaid beneficiaries, but also the privately insured. 190 rural hospitals are on the brink of closure, and Medicaid cuts would, in most cases, be the final nail in the coffin because when fewer people are insured, hospitals take on uncompensated care when they seek out needed services. When a rural hospital closes, the average driving time to the next hospital increases by 20 miles for common services and 40 miles for specialized care. That time can be precious in the setting of a heart attack, stroke, or bad fall, and that extra driving time applies whether you're on Medicaid, Medicare, or have private insurance. It's sad that we need to emphasize that it's not just poor people's lives that are endangered by these cuts, but that's where we are.

When a rural hospital closes, in addition to increased driving distances to medical care, there are job losses in communities since hospitals are significant employers, and businesses may be deterred from operating in communities with economic downturn. And while there is a rural hospital fund in the BBB, it is a drop in the bucket relative to the devastation headed their way.

The BBB's assault on Planned Parenthood is likewise wildly misguided. While Republicans like to focus on their provision of abortion services, not only does the Hyde Amendment restrict Medicaid funding from going toward abortion care, but Planned Parenthood provides a range of health services — including STD testing and treatment, HIV testing, cancer screenings, contraceptive care, and even prenatal and postpartum care — that low-income women may now be forced to go without. This is not an issue of protecting life, and it's certainly not about making America healthy again. This is going to make teen births and STDs great again, and increasing unintended and higher-risk pregnancies is especially dangerous right now both because of Dobbs v. Jackson and, related, the closure of many obstetric wings of hospitals which will be increasingly under strain amid Medicaid cuts.

Related, Medicaid covers just over 60% of nursing home residents and nearly 600 nursing homes have been designated as being at "elevated risk" of closure if Medicaid cuts are enacted, since the vast majority of their residents are on Medicaid. Absent the ability to receive nursing home care (which is very expensive), the burden of caretaking will fall on other family members, who may be juggling other responsibilities and strained financially. So, there are significant spillover effects of Medicaid cuts, affecting hospitals, nursing homes, and the broader public.

It's worth emphasizing that these cuts are profoundly unpopular. The June Quinnipiac poll showed that just 10% of people want to see Medicaid funding decrease. It's no accident that Republicans are advancing legislation very late at night and at a striking speed, not to mention deferring most of the pain that people will feel until after the 2026 midterm elections in hopes that they will not electorally suffer from turning their backs on Americans' health and wellbeing. Senator McConnell has claimed that people will "get over" the Medicaid cuts. But the reality is that people will be reminded of this damage when they are unable to go to the doctor or get their prescriptions, or when their local hospital closes.