As Congress considers proposals to deeply cut federal Medicaid funding, it’s critical to understand what’s at stake.
Medicaid is a financial foundation for hospitals across the country, accounting for 19% of all spending on hospital care in 2023, according to the Kaiser Family Foundation (KFF). This is especially true for hospitals in rural areas and those that predominantly serve low-income communities.
Any cuts to the program will hit hospitals directly, but it doesn’t stop there. When hospitals lose funding, they are forced to scale back services, reduce staff or even close entirely. In many rural and underserved communities, where health care options are limited, Medicaid is the foundation keeping hospital care available and accessible.
KFF’s findings are reinforced by what local health care leaders are trying to tell us from their on-the-ground experience. In a recent guest essay in the New York Times, Kevin Stansbury, chief executive of Lincoln Health in Hugo, Colorado, provides a firsthand account of how vital Medicaid is to keeping hospitals open and how patients suffer when funding cuts force those services to disappear.
“According to the Colorado Rural Health Center, the state’s nonprofit office of rural health, roughly half of my state’s rural hospitals are operating in the red,” Stansbury writes. “Yet we’re relatively lucky: Colorado’s decision to expand Medicaid in 2014 has been a lifeline for us because it reduces the number of patients we see who can’t pay. Our neighbors in Kansas and other states that have not expanded Medicaid are in worse financial shape.”
But even with Medicaid, rural hospitals are still vulnerable.
Take maternity care, for example. In 2023, Medicaid covered 1.5 million births and nearly half (47%) of all births in rural areas. However, maternity units are often the first services cut when hospitals are forced to reduce costs. Stansbury’s experience at Lincoln Health underscores the real-world consequences behind the numbers.
“But, despite our best attempts, we cannot offer all the services our community needs. No rural hospital can. Case in point: Lincoln Health stopped obstetric services nearly 20 years ago; we could no longer recruit specialists to attend to a shrinking number of births,” Stansbury explains. “Since then, at least two of our hospital employees have given birth alongside the highway while trying to make it to the nearest labor and delivery ward 85 miles away.”
These stories underscore that hospitals like Lincoln Health are already struggling, and further Medicaid cuts could push many past the breaking point.
The evidence is clear: hospitals rely on Medicaid, and patients need hospital care. Cutting the program reduces access to care, especially for those who already face the steepest barriers.
For more information on Medicaid’s vital role, visit https://modernmedicaid.org.