Hospital Leaders Rally as Senate Moves to Slash Medicaid

More than 250 hospital and health system leaders gathered in Washington, D.C., on June 17 for an AHA Advocacy Day briefing, as the Senate prepared to vote on its version of the budget reconciliation bill. The stakes are high: the Senate Finance Committee's draft, released on June 16, includes provisions that could shift millions of people into uninsured status, according to the American Hospital Association (AHA).

The Senate's draft legislation, which has jurisdiction over Medicaid and taxes, proposes significant changes that could lead to more than 10.9 million people losing Medicaid coverage. This is a stark contrast to the House-passed legislation, the One Big Beautiful Bill Act (H.R. 1), which already faced criticism for its proposed cuts to Medicaid and the Affordable Care Act (ACA).

The Senate's draft includes several provisions that could have a profound impact on Medicaid coverage and access to healthcare services. One of the most significant changes is the requirement for states to implement work requirements by December 31, 2026. This provision mandates that able-bodied adults aged 19-64, without dependents, must work or perform other qualifying activities for at least 80 hours a month to maintain their Medicaid coverage. Exemptions are provided for certain individuals, such as pregnant women, those with serious medical conditions, and tribal members. However, states will be responsible for verifying compliance, establishing outreach plans, and developing an appeals process before disenrollment. This requirement is likely to disproportionately affect low-income individuals who may struggle to meet the work requirements, potentially leading to a loss of coverage for millions of people.

Another provision that could shift people into uninsured status is the lowering of the federal match for the Medicaid expansion population. The Senate draft legislation proposes lowering the federal match from 90% to 80% if a state provides any form of financial assistance to undocumented immigrants, except for children and pregnant women. This change could make it more difficult for states to fund their share of Medicaid, potentially leading to cuts in benefits or coverage. States that have fully state-funded coverage for undocumented immigrants, such as 14 states and D.C., may be particularly affected by this provision.

The Senate draft legislation also includes provisions that could limit states' ability to incentivize high-quality care or improve access to care. For example, the legislation caps future state-directed payments at 100% and non-Medicaid expansion states at 110% of the Medicare rate. This could limit a state’s future options to incentivize high-quality care or improve access to care, potentially leading to a reduction in services and an increase in uninsured individuals.

These changes are likely to have a disproportionate impact on different demographic groups and geographic regions. For example, rural hospitals were more likely to have negative margins than urban hospitals, with 44% of rural hospitals having negative margins compared to 35% of urban hospitals. This could make it more difficult for rural hospitals to absorb revenue losses resulting from the reconciliation bill, potentially leading to a reduction in services and an increase in uninsured individuals in rural areas. Additionally, the loss of Medicaid coverage for Medicare beneficiaries, including 1.3 million people with Medicare, could disproportionately affect low-income individuals who rely on Medicaid to pay for Medicare premiums and cost sharing.

The AHA leaders emphasized the importance of urging Congress to address these provisions and protect Medicaid, the ACA coverage gains, and access to health care and services in all communities. "We are in a very important stage of the reconciliation process, and we have a lot at stake," said Rick Pollack, AHA President and CEO. "The magnitude of the Medicaid reductions and the changes to the health insurance marketplaces now being considered are going to shift millions of people into uninsured status. … Now is the time to make your presence felt and your voices heard."

The Senate is expected to vote on its version of the budget reconciliation bill by the middle of next week. The AHA and other healthcare advocates are urging lawmakers to consider the real-world impacts of these proposed changes and to work towards a solution that ensures access to healthcare for all Americans.