Medicaid cuts: A threat to every Arkansan

Today, Arkansas hospitals face significant challenges. Analysis from the most recent Medicare Cost Reports data shows that over 40% of Arkansas hospitals and more than 70% of rural hospitals operate at a loss in our state. When hospitals are not adequately reimbursed for providing care, they are forced to reduce services and staff.

Evidence of the current financial strain on Arkansas hospitals is clear: we are down to just 33 hospitals that deliver babies. Only 24 of our 75 counties have a hospital with a labor and delivery department. The closure of even one more would place an unsustainable strain on the remaining facilities that deliver babies and further diminish access to specialized care for moms and babies.

The budget reconciliation bill, H.R. 1 — known as One Big Beautiful Bill Act 119th Congress — recently passed the United States House of Representatives and is now under consideration in the Senate. This bill threatens health care in Arkansas. The Congressional Budget Office projects that 8.6 million Americans will lose Medicaid coverage over the next decade if this legislation becomes law. You might think this won’t affect you, but it impacts every citizen in our state and our fragile health care system.

Medicaid ensures coverage for more than 880,000 Arkansans, with children and the elderly making up the largest percentage of those enrolled. Chances are that you, your family, or your neighbors have a loved one who is eligible for and currently receiving Medicaid and is at risk of losing that coverage. An increase in the uninsured rate in our state will directly impact hospital finances.

When more Arkansans lack coverage, hospitals bear the cost of uncompensated care. Arkansans who lose Medicaid will still need health care and will turn to our already overburdened emergency departments for services, increasing wait times for all patients, whether insured, uninsured, or covered by Medicaid or Medicare. Patient care in emergency departments often is more extensive and requires more costly treatments that drive up health care bills. Hospitals are forced to absorb significant uncompensated expenses. When expenses outpace revenue, hospitals are left with no choice but to make more cuts.

We cannot afford to lose more service lines. Hospitals that are already operating at a loss and have already cut services and staff could face closure, leaving Arkansans with decreased access to health care.

It is no secret that Arkansas ranks near the bottom for health care costs mainly because our reimbursement rates for Medicaid, Medicare, and commercial insurance are the lowest in the nation. For Medicaid, specifically, the federal government has allowed certain health care providers — like hospitals, nursing homes, and ambulance services — to participate in supplemental payment programs to at least partially offset Medicaid underpayments.

If the bill passes the Senate as is, these supplemental Medicaid rates for hospitals will remain locked in at the current rate. This legislation unfairly penalizes fiscally responsible, low-cost states like ours by capping rates at the current level, while rewarding high-cost states, such as California and New York, with a higher percentage. As prices for supplies, employees, and pharmaceuticals continue to rise, hospitals will have no way to increase Medicaid reimbursement rates to keep up. Unlike other industries, hospitals cannot simply raise prices when governmental payers control more than half of our payments.

As it currently stands, the reconciliation bill will unfairly punish our small state. We urge Arkansans to speak up and let our Senators know that losing coverage and access to hospital care is unacceptable.

Editor’s note: Bo Ryall is president and CEO of the Arkansas Hospital Association. The opinions expressed are those of the author.