Potential $880B cut to Medicaid could have big impacts on Wyoming hospitals, nursing homes

Yahoo

03-05-2025

CHEYENNE — Should Congress follow through with a proposed $880 billion cut to Medicaid, Wyoming hospitals and nursing homes stand to lose significant funding on top of an already fragile health care system, stakeholders told the Wyoming Tribune Eagle this week.
Congress is having ongoing discussions about how to cut $880 billion in program spending. There is a current deadline of May 9 for congressional committees to make their budget recommendations, but this deadline is not set in stone, according to reporting by Politico.
'To get to that number, Medicaid would have to take a pretty big hit,' said Wyoming Hospital Association Vice President Josh Hannes.
States with expanded Medicaid programs under the Affordable Care Act are going to feel the brunt of these cuts. Although Wyoming is one of a handful of states that didn't opt in to Medicaid expansion, the Cowboy State is far from being in the clear, according to sources.
'Wyoming didn't expand Medicaid, so that wouldn't touch us. But that also doesn't get them to $880 billion,' Hannes said. 'So, what else are they gonna do?'
One potential area that has health care officials concerned is the looming expiration date of premium tax credits. These are a federal subsidy that makes insurance policies more affordable on the health insurance marketplace. Around 42,000 Wyomingites depend on these tax credits, Hannes said.
'If those go away … rates on the marketplace are going to jump dramatically,' he said.
This is a 'significant concern' for Cheyenne Regional Medical Center, said Cheyenne Regional Health System Chief Financial Officer Yvonne Wigington. First and foremost, hospital associates are worried about the impact the loss of these credits will have on patients, she said.
People will either have to forgo their health insurance or choose a plan that doesn't fully meet their health care needs. More people will be at risk of losing their health coverage and delaying treatment, Wigington said.
'We really don't ever want patients to feel like they have to delay their care,' she said.
On the financial side, CRMC would lose between $9 million and $18 million in annual revenue if the tax credits were to expire.
'We care for any patient, regardless of their ability to pay for their services,' Wigington said. 'If those individuals did not have health care insurance and did not have a way to pay for their health care, that would be $9-18 million that we don't get paid for.'
Hospital officials are currently evaluating 'many different scenarios for potential cuts' at CRMC, Wigington said. However, it's difficult to pinpoint what the actual impact would be, with so many cuts being proposed at the federal level.
'We're not sure exactly which cuts may actually be implemented,' Wigington said.
In addition, the hospital is facing stress from another major federal action — increased tariffs. Wigington said President Donald Trump's tariffs affect the hospital's vendor contracts, medical supplies, pharmaceuticals and the information technology area. However, with the percentage of these tariffs constantly changing, preparing for financial impacts has been a moving target.
'We're in the preliminary stages, but we definitely have seen price escalations,' Wigington said. 'Some of our vendors have notified us that they're not able to honor quotes that they've given us previously until they are better able to evaluate the impact of tariffs.'
Wigington said tariffs have not impacted services or employment at CRMC so far.
'The (tariffs') percentages have changed a few different times,' Wigington said. 'We, like probably every other hospital, are really just trying to plan with what we know now and anticipate those things that are being proposed.'
Uninsured rates in Wyoming
The Kaiser Family Foundation (KFF) reported that 59,400 Wyomingites, or 10.5% of the state's population, were uninsured in 2023. By comparison, 8% of the entire U.S. population was uninsured that same year.
'We already have struggling hospitals and nursing homes, and Medicaid is a lifeline for a lot of those facilities,' Hannes said. 'Medicare and Medicaid together represent way over half of total revenue for our hospitals in the state.'
A 2022 contribution analysis conducted by the Center for Business and Economic Analysis at the University of Wyoming found that Wyoming's hospitals and nursing homes directly contribute a combined $47.5 billion to the gross state product.
The hospital and nursing home industry made up 3.5% of Wyoming's total economic contribution, as well as provided 19,370 jobs, according to the analysis.
'If you're not investing in our health care infrastructure, you're doing harm, and if you're going to pull away investment, that's even worse,' Hannes said. 'So it's certainly concerning, the discussions that are going on at the federal level.'
Adding to the number of uninsured patients increases cost of care, Hannes said. When a patient is unable to pay for services, 'hospitals eat that.'
'Our industry is different from so many others, because we don't get to decide what we get paid, and we have to serve everyone who comes in through the door,' he said.
About 7% of CRMC's total patient population is on Medicaid, Wigington said. The potential $880 billion cut in funding to Medicaid, equivalent to about an 11% spending reduction for the program, would expand the local hospital's funding gap by $1.8 million.
'The payments already that we receive for caring for our Medicaid patients don't cover our cost to care for those patients,' Wigington said. In the 2024 fiscal year, there was a $10 million shortfall in Medicaid payments, which the hospital tries to alleviate through other funding sources, she said.
'That is a lot of money,' Wiggington said.
In January, U.S. Sen. John Barrasso, R-Wyo., brought up Wyoming's challenges with rural health care to Robert F. Kennedy Jr., who is now U.S. secretary of Health and Human Services. Barrasso said six Wyoming hospitals are at risk of closing, two are in immediate risk of closing in the next two years, and 10 have had to cut available services, according to a news release from his office.
'We have 33 hospitals in Wyoming. Twenty-six are located in various locations often hard to get to, or weather impacts them,' Barrasso said. 'This is a concern of rural hospitals in both Republican and Democrat states. It's bipartisan. It is critical that the financial, workforce challenges that we are facing are addressed.'
Nursing homes at risk
Most states finance at least a portion of their Medicaid spending through taxes collected from health care providers, which generates additional federal matching payments to the states, according to a Congressional Budget Office (CBO) analysis. States return the collected taxes to those providers in the form of higher Medicaid payments.
Wyoming's had a hospital provider tax since 2017 and a nursing home provider tax since 2011, according to the Center on Budget and Policy Priorities, a progressive think tank based in Washington, D.C. These mechanisms help draw down federal dollars to the state, Hannes said, and nursing homes are a huge benefactor of these programs.
There is currently a 6% provider tax cap. The CBO estimated a 5% cap on the provider tax 'would reduce the deficit by $41 billion from 2024 to 2032.' A 2.5% cap 'would reduce the deficit by $209 billion over that period.'
Critics of restricting provider taxes argue this 'will create financing gaps for states that could result in higher state taxes, reductions in Medicaid eligibility, lower provider payment rates, and fewer covered benefits,' according to KFF.
'If they dial back these provider loopholes, that's a direct reimbursement reduction to the nursing homes,' said Wyoming HealthWorks CEO Tracy Brosius. 'They're almost entirely dependent on that.'
Around 70-80% of patients in nursing homes are reliant on Medicaid, Brosius said. People are there because they have a high clinical need and no one to take care of them. She questioned where these people are supposed to go once nursing homes start shutting down.
'What happens if they cut the provider taxes and now the nursing homes start to fold?' Brosius said. 'What happens to the 80 people that are there?'