Trump's Tax Bill Draws Rural Backlash Over Proposed Medicaid Reductions

NDTV

2 days ago

Washington:
Rural hospitals are sounding the alarm over proposed healthcare cuts in President Donald Trump's sweeping tax-cut and spending package, warning the changes could force them to scale back services or close their doors.
The bill would reduce federal spending on Medicaid, the health program for low-income Americans, by tightening enrollment standards and limiting federal aid to states.
That worries rural providers, who rely heavily on the program to serve a population that tends to be poorer and sicker than the nation as a whole.
"We can't sustain serving our community the way we are with additional cuts," said Carrie Lutz, CEO of Holton Community Hospital in Holton, Kansas. The independent nonprofit hospital, which serves a farming community of 13,000, is asking voters for a quarter-cent sales-tax increase to help cover its costs, which outpace annual revenues in many years.
Lutz's concerns highlight the delicate balancing act lawmakers face as they try to enact Trump's priorities.
Republicans who control both chambers of the US Congress aim to cut Medicaid spending by $785 billion over a decade, to partly offset the cost of extending and adding to the 2017 tax cuts that were Trump's signature first-term legislative achievement.
The nonpartisan Congressional Budget Office estimates the bill will add $3 trillion to the $36.2 trillion national debt over the next decade, when interest payments are taken into account.
Independent analysts have said the bill will effectively boost incomes for wealthier Americans and reduce incomes for the less affluent, due to cuts to Medicaid and other safety-net programs.
Republicans have set a July 4 deadline to pass the bill out of Congress, giving the Senate three weeks to make changes, pass it and send it back to the House of Representatives.
No Democrats voted for the bill in the House, and no Democratic supporters for it have emerged in the Senate. So Republicans who hold a slim 53-47 Senate majority must reconcile demands of budget hawks who want deeper spending cuts against concerns of others worried about the toll on rural and working-class voters who helped elect Trump.
An internal Republican poll in May found voters in the most competitive congressional districts would be less likely to vote for a Republican who supported cutting Medicaid to pay for tax cuts.
Lobbying Pushback
The upper chamber's slower pace has given interest groups time to seek changes to the 1,100-page bill.
Multinational companies seek to neutralize a retaliatory tax they say could discourage investment in the US Some states are fighting a provision that would prevent them from regulating artificial intelligence. Solar-energy companies warn the bill could devastate their industry by revoking subsidies for green energy.
Much opposition has focused on changes to Medicaid, which covers 71 million low-income Americans. The bill would cut spending on Medicaid, which represented about 9% of the $6.8 trillion federal budget last year, by requiring adult recipients to work, excluding non-citizens and limiting an accounting mechanism states use to boost the federal government's contribution.
Overall, the bill would leave 10.9 million more people without insurance, CBO estimates.
Any cuts to Medicaid would hit hard in rural areas and small towns, where roughly 18% of adults are enrolled in Medicaid compared with 16% for the country as a whole, according to Georgetown University's Center for Children and Families.
Rural residents tend to be sicker, with higher rates of addiction, mental illness, and mortality from heart disease, cancer and stroke, the center found.
The National Rural Health Association said the bill could force providers to cut services or close. Nearly half of rural hospitals currently lose money, and 120 have closed or stopped offering inpatient services over the past decade, the trade group says.
The cuts could be especially acute in Kansas. The state recently increased its tax on Medicaid providers from 3% to 6%, an accounting maneuver that would effectively boost the federal government's contribution.
The provider tax has been widely criticized as a gimmick or loophole that does not accurately reflect how much money is actually being spent on medical care.
The bill would block that increase, freezing the state's provider tax at a lower level than in many other states.
Lutz said that would reduce Holton Hospital's $22 million annual revenue by roughly $1 million - a significant hit for an organization that typically spends more money than it takes in each year. Tighter Medicaid enrollment standards, meanwhile, would increase red tape for hospital staff, while the citizenship provisions could exclude the town's Guatemalan immigrants, she said. With those changes, she said, the hospital would have to treat more uninsured patients.
'Don't Cut Into The Bone'
At least 41 of the Senate's 53 Republicans represent rural states, and several said they will work to remove the bill's limits on the provider tax.
"Leave the provider tax alone. Put the work requirements in and all that kind of stuff. But for God's sakes don't cut into the bone," said Senator Jim Justice of West Virginia.
The Senate Finance Committee could unveil changes to the House-passed bill in coming days. Failure to tackle that issue, they say, could leave many of their residents without reliable access to care.
"If we don't get it right, doctors do not have to serve Medicaid patients and so in rural areas we could have doctors exit and I don't think our members from rural states would want that," said Senator Thom Tillis of North Carolina.