Republican budget proposals that would slash Medicaid would not only result in thousands of Mainers becoming uninsured but would also worsen the precarious financial health of Maine’s hospitals, threatening more closures and service cutbacks.
The state’s hospitals are already teetering under current financial conditions.
Half of Maine’s 24 rural hospitals are at risk of closing, according to the Center for Quality and Patient Reform think tank, without factoring in further cuts to Medicaid.
And two of the state’s rural hospitals — Northern Light A.R. Gould Hospital in Presque Isle and Northern Light Maine Coast Hospital in Ellsworth — would be among 338 rural hospitals across the nation most at risk of closing in the near future if the bill pending in Congress is signed into law, according to a national analysis of hospitals by the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill.
“Many hospitals are looking into the abyss,” said Steven Michaud, president of the Maine Hospital Association.
“It wouldn’t take much to throw them into a catastrophic situation.”
The cutbacks would impose work requirements and rules that would make it more difficult for Medicaid enrollees to maintain eligibility, fueling more than 60% of the proposed Medicaid cuts in the House version of the budget bill.
It’s estimated that Maine’s hospitals would lose $800 million in revenue if the House version of the bill passed, according to the Robert Wood Johnson Foundation, a health policy think tank. The Senate version would cut more from Medicaid, although official projections on how much more — and what financial impact it could have on Maine’s hospitals — have yet to be released.
Katie Fullam Harris, chief government affairs officer for MaineHealth, the state’s largest health care system that includes Maine Medical Center and seven rural hospitals, said the bill pending in Congress would push the state’s hospitals over the brink.
“If this passes, you are going to be inflicting serious pain on providers who serve patients, and the patients themselves,” said Harris, who described hospitals as being at a financial “tipping point.”
James Rohrbaugh, executive vice president and chief financial officer at Northern Light Health, which owns Eastern Maine Medical Center in Bangor, Mercy Hospital in Portland and eight rural hospitals, said the proposal “would put programs and services at risk in a pretty dramatic way.”
Rural hospitals are typically more reliant on Medicaid and Medicare for their revenue, so cuts to either of those two programs are more harmful.
“Rural hospitals are more vulnerable,” Rohrbaugh said. “They are most at risk of closing programs and services.”
And it’s already happened.
Citing financial pressures, Northern Light Health closed Inland Hospital in Waterville this year. Other hospitals have had to close or curtail services. Citing a lack of volume and financial issues, nine Maine hospitals have closed birthing centers in the past decade, including Houlton Regional Hospital and MaineHealth Waldo Hospital in Belfast this year.
The House bill would cleave about $800 billion over 10 years from Medicaid across the nation, according to the Congressional Budget Office, and result in 16 million more Americans being uninsured. That includes about 40,000 Mainers, according to KFF, a health policy think tank. The Senate’s version of the bill would cut more deeply into Medicaid, although the CBO has yet to estimate by how much.
Republicans hold a slim 53-47 majority in the Senate, and Sen. Susan Collins, R-Maine, is a key vote, although she may not cast the deciding vote on the bill. Collins has raised concerns about Medicaid cuts, but she’s also said she is open to approving work requirements.
The work requirements would mandate some able-bodied adults, ages 19-64, to work 80 hours per month or they would become ineligible for Medicaid and Affordable Care Act subsidies. These requirements are a major component of the Medicaid cutbacks, representing $344 billion, or 43%, of all the Medicaid cuts in the House bill, according to KFF.
The cuts would directly harm hospitals’ bottom lines, hospital officials said.
Every person who loses their Medicaid insurance and becomes uninsured is a “100% cut” for hospital reimbursements when they seek care at hospitals, Michaud said.
Other provisions that would also hurt hospital finances include a $167 billion cutback that would make it more difficult for Medicaid enrollees to maintain eligibility, and an $89 billion cut in provider taxes that benefit hospitals. Hospitals pay provider taxes to the state but receive significant funding from the federal government through reimbursement rules.
The Senate’s version of the bill has a steeper version of the provider tax cut. Some senators, including Collins, are pushing for a relief fund for rural hospitals in the Senate bill that would offset some of the losses.
Larry Levitt, KFF executive vice president, said in a social media post on June 20 that a “relief fund could help hospitals, and preserve access to care for rural residents. But a hospital relief fund does nothing for people who lose Medicaid and end up uninsured.”
When uninsured people seek health care at hospitals, the costs are absorbed by the hospitals as “charity care.”
Uninsured patients who put off care are more likely to “end up in our emergency departments, more compromised and sicker. Of course we will treat them, but we will not be reimbursed for that care,” said Bradford Coffey, senior vice president at Covenant Health, a small health system that owns St. Mary’s Health in Lewiston and Saint Joseph Healthcare in Bangor.
About 400,000 Maine residents — or about one in every four Mainers — currently have Medicaid insurance.
That includes Siiri Cressey, of Lewiston.
The 47-year-old said that if she were to lose her Medicaid insurance, she would likely have to choose between housing and paying for medications for several chronic health conditions.
“Without Medicaid,” she said, “I would lose services.”
COLLINS ‘STILL EXAMINING’ TEXT OF BILL
Collins’ office refused — over the course of nearly two weeks — to make her available for an interview with the Press Herald about the proposed Medicaid cutbacks. Blake Kernen, Collins’ spokesperson, said that Collins is not doing interviews about the bill because negotiations over the final provisions are ongoing.
Her office provided a statement that said Collins “recognizes the importance of Medicaid in Maine and is committed to protecting access for low-income families, children and others with disabilities, and seniors who qualify for both Medicare and Medicaid due to their low incomes.”
“Maine’s rural hospitals and nursing homes rely on Medicaid payments, and many are having financial difficulties,” according to the statement provided by Kernen.
Collins, the statement says, “supports work requirements for able-bodied adults who do not have circumstances that preclude them from participating in the workforce.”
When asked whether Collins supports the work requirements as currently written in the Senate bill, Kernen said Collins is “still examining the text at this time, which is subject to change.”
Meanwhile, in a statement last week, Democratic Gov. Janet Mills slammed the Medicaid cuts, saying those who are left uninsured are more likely to delay their care, raising costs for everyone.
“Our hospitals and other health care providers will be saddled with the increased costs of providing that care to people without coverage,” Mills said. “This could force them to reduce available services or, even worse, close, which would have devastating consequences for all Maine people and our economy, especially in rural areas where health care providers are often the largest employers.”
The rest of Maine’s congressional delegation, independent Sen. Angus King, and Democratic Reps. Chellie Pingree and Jared Golden, have also criticized Medicaid cutbacks. Pingree and Golden voted “no” on the House version of the bill in May.
‘I WOULD LOSE SERVICES’
Cressey said she needs Medicaid because her health conditions require that she takes several different medications.
“I don’t take any of these for fun,” she said. “They are to keep me sane and relatively healthy.”
Cressey, who is on disability, said she takes medications for depression, high blood pressure, high cholesterol and attention deficit disorder. She said she also takes hormone supplements.
“I couldn’t even try to pay for them out of my own pocket,” said Cressey, who volunteers for the Maine People’s Alliance progressive advocacy group.
Cressey said even if she didn’t lose her Medicaid insurance, if hospitals and other health care providers close around her, she would have a difficult time traveling farther to get to medical appointments.
Aside from transportation issues, Cressey said she’s also worried that if Medicaid is slashed, she would lose access to mental health services, which are already thin across Maine. If she loses access to her counselor, she said, it would be difficult to find another one.
ENTIRE HEALTH CARE SYSTEM IMPACTED
Medicaid and non-Medicaid patients would be harmed by the proposed cuts, Nathan Howell, president and CEO of MaineGeneral Health, said in an email.
“Both Medicare and Medicaid do not reimburse hospitals to pay the full cost of care provided,” Howell wrote.
The cuts would “add to this current destabilization,” he wrote, “as it would impose additional severe Medicaid cuts and would be detrimental to MaineGeneral Health and other Maine hospitals. All patients — not just those covered by Medicaid — would be negatively impacted if these cuts take effect.”
Howell said he has reached out to all four of Maine’s congressional delegates about the harm the bill would cause to hospitals and residents.
Leaders at Covenant Health have also expressed concerns to Collins. Coffey said Covenant Health’s hospitals — two in Maine and one in New Hampshire — would be forced to operate at significant losses if the bill goes through.
“The proposed cuts to Medicaid will reduce funding to our three hospitals by $12.7 million,” Coffey said during a June 17 news conference. “That would be devastating. Our hospitals typically operate at a loss or barely break even. This means less money to pay living wages for our staff, less money to replace equipment, less money to ensure we have adequate staffing, a reduction in the quality of care for an aging population, a reduction in access.”
He said those cuts, if passed, could also cause the end of community programs, including one in Bangor that provides 24/7 care to victims of domestic violence, abuse and rape.
With the next fiscal year approaching on July 1, Howell said MaineGeneral leaders have already made financial changes to account for recent health care shifts and hospital closures.
“Earlier this spring, we took steps to address financial challenges to ensure sustainability of services that are needed in the Kennebec Valley, including reductions in discretionary spending, labor and benefits, as well as consolidating some services and locations,” he said.
Additional cuts to services may be needed, Howell and Coffey said, if the bill passes.
“Like other parts of the country, we in Maine have been seeing hospitals close, programs cut,” Coffey said. “People in our communities — my neighbors, friends and family members — are anxious, worried and concerned about access to health care.”
