Big Medicaid cuts will hurt everyone in health care system

The House Committee on Energy and Commerce is readying a plan to enact $880 billion in cuts from programs under its jurisdiction to help fund an extension of the 2017 tax bill. The cuts likely will focus on Medicaid, particularly on funding provided to states. Every consumer who uses our health care system, and every business that provides coverage to its workers, should be deeply concerned about the implications of these reductions.

Because Medicaid is jointly financed by the federal and state governments but administered by states, it will fall to governors and state legislatures to figure out how to absorb cuts of such magnitude. There are three options: reduce Medicaid benefits, limit who is eligible for coverage, or cut reimbursements to health care providers. Many congressional Republicans say they won’t support cuts to beneficiaries but any of these options will do so. Forcing states to make these hard decisions shifts the responsibility elsewhere but not the blame.

Cutting provider reimbursements has the same impact on enrollees as reducing benefits and eligibility — more uninsured patients means more fragile provider finances, which means reductions in services. Providers will have no choice but to shift more costs to commercial insurers, which means higher premiums. All consumers lose, not just Medicaid beneficiaries.

As one of three pillars of our health care system, with Medicare and employer-provided insurance, Medicaid matters to all of us. It covers 43% of New York’s children and 72% of nursing home care for the frail, elderly and disabled. More than half of all births in the state are covered by Medicaid and it is the single largest payer for behavioral health services nationwide. It offers low-cost coverage to families with modest incomes and young adults aging off their parents’ plans. New York’s aggressive expansion of Medicaid and other low-cost insurance options, with federal support, has been a great success. That’s why our uninsured rate is below 5%.

New York’s Medicaid program isn’t perfect. It reimburses hospitals and health systems much less than the cost of providing care; that hurts providers, but not as much as a flood of uninsured patients would. Many patients will defer care until they are in crisis and more expensive to treat, a cost to be borne by hospital charity care policies. Most uninsured people will avoid preventive screenings and primary care, making them sicker and more expensive patients because they did not receive care when their condition was more manageable and less expensive to treat. Either way, we all pay — a little now or a lot more later.

Meanwhile, already fragile providers will suffer from lost reimbursement. The median statewide hospital operating margin is 0.0%, doctors cannot afford to take on new patients, and nursing homes are closing units, making a spike in uninsured New Yorkers deeply damaging. Health care jobs — the bedrock of many communities’ economies — will shrink along with coverage.

Fortunately, four of New York’s seven Republican House members — Andrew Garbarino, Nick LaLota, Mike Lawler and Nicole Malliotakis — and nine of their colleagues have written to their leadership in opposition to Medicaid cuts. We urge them to hold the line. They can provide the margin that determines whether this package passes or fails, given the narrow House majority. Their success matters to families, to the stability of the health care system we all use, and to our economy.

This guest essay reflects the views of Wendy Darwell, president and chief executive of the Hauppauge-based Suburban Hospital Alliance of New York State.