Latest news with #Children'sHealthInsuranceProgram
Yahoo
29-07-2025
- Health
- Yahoo
Dr. Oz on the future of US healthcare: 'There is a new sheriff in town'
In an exclusive interview on Yahoo Finance's Decoding Retirement podcast, Dr. Mehmet Oz, the administrator of the Centers for Medicare & Medicaid Services (CMS), discussed the financial and operational challenges facing the US healthcare system. Ultimately responsible for the healthcare of 66 million Medicare beneficiaries, 78 million people enrolled in Medicaid and the Children's Health Insurance Program (CHIP), and millions more in Affordable Care Act health plans, Oz weighed in on issues ranging from new Medicaid work requirements to Medicare Advantage fraud. Medicaid work requirements The Congressional Budget Office (CBO) estimates that the One Big Beautiful Bill Act (OBBBA) could reduce federal Medicaid spending by $793 billion over the next decade and lead to 10.9 million fewer enrollees by 2034. This is partially attributed to the Medicaid work requirements the OBBA will make states enforce for certain adult enrollees by Jan. 1, 2027, which generally involves 80 hours per month of work, community service, education, or work programs. The CBO estimates the requirement will decrease coverage by 5.2 million enrollees by 2034. Concerns about red tape are not hypothetical: In Georgia, where work requirements are already in place, reports show otherwise eligible workers are losing coverage simply because of paperwork hurdles. However, Oz said that technology and digital solutions could help beneficiaries comply with the rules without losing coverage. 'We've already launched two pilots in Louisiana and Arizona with good results so far,' Oz said. The new digital process, he explained, uses a smartphone app to verify work automatically through payroll providers. "The people running it are the same folks who fixed the passport system in America,' he said. 'Ninety-one percent of people on Medicaid have smartphones. You tap on the smartphone within the app where you're working. Let's say you're an Uber driver, it knows that ADP does your payroll, and so it asks you permission, can I contact ... ADP and ask them about your hours? You say yes and boom ... the entire process is less than seven minutes." Oz, however, stopped short of addressing some key questions, for example, how many people might lose coverage under the current system, or whether administrative barriers will unfairly affect millions before the new technology is fully in place. Medicare Advantage and 'upcoding' Oz weighed in on the controversy swirling around Medicare Part C, better known as Medicare Advantage. About 33 million people are enrolled in these private plans, offered by companies such as UnitedHealth Group (UNH) and CVS Health (CVS). Medicare Advantage allows enrollees to receive Part A (hospital), Part B (medical), and, when bundled, Part D (prescription drug) coverage in one plan. The program has been under a harsh spotlight. Earlier this month, UnitedHealth confirmed it is under federal investigation. And a Wall Street Journal story detailed how some Medicare Advantage providers allegedly exploited the system through questionable or outright fraudulent billing practices. 'The whole point of launching Medicare Advantage was to give seniors options," Oz said. "But in the middle of all this, if it turns out that Medicare Advantage is costing us a lot more than fee-for-service, you're violating the whole premise.' The big problem is 'upcoding," the practice of inflating the severity of patients' conditions to trigger higher government payments. 'In Medicare Advantage, I do think that there's been an ability for the private companies to game the coding system,' Oz said. 'Instead of just saying, 'I got what I got, I'm going to take care of them and be honest about how sick they are,' they expertly devised tactics to upcode to pretend the patients were sicker than they really were. That got them more money.' Oz said CMS is now taking aggressive steps to recover funds and send a message: 'We have a process called RADV that allows us to go back to the late teens and, for the first time, audit Medicare Advantage companies,' he said. 'Based on what we find, we're going to pull money back from them. We expect it will be billions and billions of dollars. But more importantly, we're sending a message to the industry: Listen, I want you to succeed. I want you to thrive, but not at the expense of the American taxpayer.' Concern about Medicare's financial future According to the 2025 OASDI Trustees Report, Medicare Part B premiums are expected to rise 11.6% in 2026 to $206.50 a month — the steepest single-year increase in nearly a decade. At the same time, the Medicare Hospital Insurance Trust Fund, which finances Part A, is projected to run dry in 2033. If Congress doesn't intervene, that insolvency would trigger an automatic 11% cut in covered hospital services. Oz called the looming Part B increase a 'major concern,' citing the surge in prescription drug prices as the primary culprit. 'But there are other things,' Oz said, 'that are in Part B as well that we believe we have control over and we could get to be more efficient.' Rather than promising immediate regulatory fixes, Oz said his agency should work directly with industry. 'A lot of this is hearing the stakeholders and then pushing back on what you've heard and then letting them actually come up with some ideas themselves,' he said. 'We've gone back to all of them and said, we need better answers. What you're doing now is making you a lot of money, and you can do that for another year or two — and then the bottom's going to fall out.' 'The… Trustees Report predicts that [Part A] is bankrupt in 2033,' Oz added. 'That's three years shorter than we thought a month ago. And in their worst-case scenario, it goes bankrupt in [2029].' For context, Medicare Part A is primarily funded through a dedicated payroll tax under the Federal Insurance Contributions Act, or FICA. The total Medicare tax rate is 2.9% of wages — typically split evenly between employee and employer. That means 1.45% is withheld from your paycheck, and your employer contributes the other 1.45% on your behalf. Navigating Medicare open enrollment As Medicare's annual open enrollment period approaches — beginning Oct. 15 for 2026 coverage — millions of beneficiaries will face one of the biggest financial decisions of the year: whether to stick with their current plan or make a change. Most Medicare beneficiaries never switch plans, even though premiums, provider networks, and drug formularies can change from year to year. So how might retirees navigate this? 'We have to give people information,' Oz said. 'At the same point, I don't want people to panic and jump to changes." His advice is simple: Do your homework, but don't feel pressured to change plans unless you have a clear reason. One big resource: 1-800-MEDICARE. 'It's easy to remember, and it's got a ton of information,' he said. 'Especially during open enrollment, I strongly urge you to do a little work.' Hospice scams Healthcare scams are on the rise — and Medicare beneficiaries are among the top targets. The CMS recently sounded the alarm in a blog post and video featuring Oz, warning older Americans to be on guard for this disturbing trend. 'Beware of scammers, sometimes posing as salespeople, offering 'free' services or gifts,' the CMS blog warned. 'They may be trying to trick you into signing up for hospice care without your knowledge.' 'This is a reprehensible activity,' Oz said. 'It's run by criminal syndicates — not small-time operators. They take advantage of people at their most vulnerable time.' Hospice fraud is insidious because it targets people making some of the most difficult decisions of their lives. Oz said, 'We are hearing horror stories about people who thought they were entering legitimate hospice and there's nothing there for them. And even worse — because you're not really sick — people are on these hospice programs for years. We're going after them in a big way.' 'There is a new sheriff in town' Oz promised a tougher stance against healthcare fraud, both foreign and domestic. 'We already have actions in several states,' he said. 'The Department of Justice is pursuing a lot of these leads. We will leave no stone unturned. There is a new sheriff in town. I promise you, if you're cheating the American people, we will come after you. And if you're doing it to hurt folks who are most vulnerable — we'll be doubly vigilant.' Beyond enforcement, Oz emphasized that better technology and patient identification are key to preventing fraud before it happens. 'You're talking about an agency with a $1.7 trillion budget,' Oz said. 'One policy memo can affect [tens of millions of Americans.] We have to get it right.' One key: distilling the complexity of the system into actionable information for both the public and his team. 'The goal is the same as it was" on his TV show, Oz said. "Explain it so people understand it and can act on it,' he said. 'If we simplify the rules, give people clear guidance, and enforce the protections already in place, we can change outcomes for millions of Americans." - Got questions about retirement? Email Robert Powell at yfpodcast@ and we'll do our best to answer it in a future episode of Decoding Retirement. Each Tuesday Powell, a retirement expert and financial educator, gives you the tools to plan for your future. You can find more episodes on our video hub or watch on your preferred streaming service. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Atlantic
22-07-2025
- Health
- Atlantic
How Medicaid Cuts Will Bleed Emergency Medicine
If you have a heart attack in the United States, you might assume that an ambulance will bring you to an ER and its staff will take care of you. But hospital closures over the past 20 years and physician shortages were undermining that assumption even before President Donald Trump signed his 'One Big Beautiful Bill' into law. Now that legislation—which will cut Medicaid spending by an estimated $1 trillion over 10 years, puts the entire emergency-medicine safety net at risk. The destabilizing effects will be felt not only by those who lose access to Medicaid, but also by those who have private health insurance. As an ER doctor in New York City, I am terrified about the coming cuts. A recent study from the Rand Corporation confirms that ERs across the entire country are dangerously overstretched and underfunded. About a fifth of emergency visits each year are never paid for, amounting to nearly $5.9 billion in care costs absorbed by hospitals. The uninsured and underinsured were already more likely to have to seek treatment in the ER when they fell ill. With the changes to Medicaid eligibility, their ranks are set to swell. Medicaid provides coverage to more than 71 million Americans; in addition, the Children's Health Insurance Program (which provides low-cost coverage for children of families that do not qualify for Medicaid) covers 7 million children. Trump's legislation is expected to deprive som 12 million people of Medicaid by 2034, and an additional 5 million will lose insurance because of changes to provisions of the Affordable Care Act. The cost of replacing this lost coverage for some 17 million Americans will be especially daunting for low-income families: On average, health-insurance premiums add up to nearly $9,000 a year, whereas a full-time minimum-wage job generates just $15,000. I went into frontline medicine to help people, not to bankrupt them—yet I am acutely aware that medical debt is a major factor in nearly three-fifths of bankruptcy cases in the United States. When someone who does not have insurance comes into the ER, I am forced to discuss with the patient what necessary care they may have to delay or forgo if they cannot afford it. These conversations will become only more frequent when millions of people are kicked off their health insurance. Jonathan Chait: The cynical Republican plan to cut Medicaid The 1986 Emergency Medical Treatment and Labor Act, one of the most important public-health measures ever enacted in the United States, mandates that every emergency department must provide treatment to anyone who comes through the door, regardless of their ability to pay or their insurance status. 'People have access to health care in America,' President George W. Bush once declared. 'After all, you just go to an emergency room.' But the treatment mandate is unfunded. Bush neglected to say that patients are still charged for that visit once they receive the care they need. When they can't pay, they get hounded by a collection agency. If they still can't pay, the hospital ends up eating the cost. The downstream effect is lower staffing and fewer services. The burden of uncompensated emergency care unquestionably contributes to hospital closures. Even before Trump's huge budget-reconciliation bill passed, many people living in rural communities were at risk of losing access to health care. Of 25 hospitals that closed last year, 10 were in rural America, the industry publication Becker's Hospital Review reported; according to a nonpartisan health-policy center, another 700 rural hospitals are financially distressed and at risk of closure. Nearly half of all children and one in five adults in small towns and country areas rely on Medicaid or CHIP; half of all births in these communities are financed by Medicaid. This makes rural hospitals highly dependent on the reimbursement that they receive from Medicaid for treating those patients. The more patients who lose coverage, the greater the threat to these institutions. A report from the National Rural Health Association and the research firm Manatt Health finds that, because of Trump's BBB, rural hospitals 'will lose 21 cents out of every dollar' they'd previously received in Medicaid funding. The inevitable result will be more service cuts and more hospital closures, which will endanger everyone in these areas—even people with insurance. The rational course would be for the government to put more resources into Medicaid, so that patients in need could access care in an optimal setting, instead of visiting the ER, where treatment is more expensive to provide and less comprehensive. Supporters of the BBB purport to have data showing that patients with Medicaid misuse the ER by seeking unnecessary treatment, and they argue that visit volume will go down once they are uninsured. My own experience is that although uninsured patients see me less, they typically show up much sicker—and need more resource-intensive care. One of my regular patients has both Crohn's disease and a debilitating psychiatric condition. He has no family support, usually lives in a shelter, and only sometimes has a job. After requiring an emergency intestinal surgery last year, he now comes into the ER every few days to have his ostomy bag changed, because the only clinic that takes Medicaid is in another borough. In an ideal world, he would have access to a clinic with wound-care nursing and social support. In this far-from-ideal world, taking away his Medicaid will not stop him from having chronic disease. This patient could try to skip visits, but he will have to come to the ER when he gets an infection or his illness flares again, and then he will also be stuck with a bill that will hurt his credit rating and set back his efforts to pull himself out of poverty. The hospital, too, will be worse off—forced to absorb the cost of his treatment when previously it did receive at least small payments for his visits. In short, any appearance of less demand on health-care resources is a mirage; the real outcome will be worse health for the patient and higher costs for his health-care providers. Imagine various such scenarios replicated all across the country, when millions of people lose Medicaid coverage. In a letter to Senate leadership last month, the American Medical Association's chief executive, James Madara, warned that the proposed law 'could lead to delays in treatment, increases in emergency room visits and hospitalizations, and other expensive forms of care.' His appeal went unheeded, as Congress passed the legislation on largely party-line votes. As Alison Haddock, the president of the American College of Emergency Physicians, put it: 'The very idea of emergency medicine as we now know it—lifesaving care available for anyone at any time—is under direct threat.' The threat is dire, but a stay is still possible. The majority of health-care cuts in the act will not go into effect until after the midterm elections in November 2026. Lawmakers have at least a theoretical opportunity to change course and save our emergency-medical system—if enough voters make them pay attention.
22-07-2025
- Business
McDowell County, West Virginia, birthplace of food stamps, faces a disappearing safety net
For nonprofits in McDowell County, West Virginia, the federal cuts in the One Big Beautiful Bill Act threaten a lifeline. Many of McDowell's 17,000 residents rely on federal programs and the nonprofits they fund to get by. The county's tax base and population have significantly declined since 1950, when McDowell was the top coal-producing county in the nation and had about 100,000 residents. Now, more than half the children in the county receive federal Children's Health Insurance Program benefits, and about one-third of seniors are on Medicaid, the federal health insurance program for the poor. Decades after the Kennedy administration made the county a first test of food stamps, nearly half the county's residents receive supplemental nutrition assistance, or SNAP, the Food Stamp Program's successor. The strains created by new eligibility restrictions on SNAP as a result of the passage of President Trump's domestic policy bill will be especially dire in places like McDowell County, where more than one-third of the population lives below the federal poverty line, said Rosemary Ketchum, executive director of the West Virginia Nonprofit Association. 'These federal cuts are starving people,' she said. Since the interruption in federal support tied to President Trump's January executive orders barring grants related to 'gender ideology'; diversity, equity, and inclusion; and environmental justice, Ketchum said many of the 9,000 or so nonprofits in her state have laid off staff. Others, she said, are dipping into whatever reserves they have to pay their employees. Those reserves are slim, if they exist at all. Taken together, the seven nonprofits that receive federal grants in McDowell County run on a 3 percent operating margin, according to data tabulated by the Urban Institute's National Center for Charitable Statistics. If all federal support disappeared, the center found, all the county's nonprofits would be at risk of going under unless other funding was provided. In a poor state like West Virginia, which is already facing a budget deficit and lacks the legions of philanthropic donors who got rich on Wall Street or in Silicon Valley, nonprofits don't have a plan B, said Kathy Gentry, executive director of Safe Housing and Economic Development, or SHED, a McDowell nonprofit housing provider. The nonprofit's clients, many of whom are elderly or disabled, rely on U.S. Housing and Urban Development support to cover the rent at the 94 housing units SHED manages. Gentry's pay was temporarily cut for six weeks this spring because part of her salary comes from a HUD capacity-building grant that the administration deemed at cross-purposes with Trump's anti-DEI policy agenda. Her full paycheck resumed, but Gentry worries further cuts will force her to lay off staff. Already the nonprofit operates at a loss. In its 2023 tax filing, the most recent available, SHED's $663,000 in expenses outstripped its revenue by nearly $200,000. 'We're in a quandary here — all nonprofits are,' Gentry said. 'Are we going to exist? Will we have to dissolve?' Since 2015, Heidi Binko and her team at the Just Transition Fund have worked with economic development agencies and nonprofits in areas where the coal industry once flourished. That can mean helping a local organization identify or write a grant or provide a matching grant. The fund was created by the Rockefeller Family Foundation and Appalachian Funders Network to help coal towns capture some of the dollars provided in the 2015 Clean Power Plan, or POWER Act, passed during the Obama administration. Since then, the fund says it has helped coal communities in West Virginia and throughout the nation secure more than $2 billion in federal grants. Binko hopes the fund can continue to attract federal resources to towns with high poverty rates. 'There are still federal dollars available,' she said. 'They haven't all been zeroed out.' The recently passed domestic policy bill, for instance, contains $50 billion in health care grants over 10 years for rural providers, though it is unclear whether that money will keep hospitals and clinics that rely on Medicaid dollars afloat. Two hallmarks of the Biden administration's infrastructure and stimulus acts — transitioning away from a carbon-based economy and providing federal resources among different populations equitably — are not a focus of the Trump plan. As a result, Binko fears recent progress will be dimmed. For instance, Generation West Virginia, a Just Transition Fund grantee worked with McDowell County to apply for funds from the Biden administration's Digital Equity Act to run an elementary and middle school digital literacy program. Programs under the act were terminated in May. The cancellation of the Digital Equity Act is a setback for McDowell, where 20 percent of households don't have a broadband internet connection, according to a Generation West Virginia report. Other, more basic infrastructure is lacking in the county. According to DigDeep, a nonprofit that assists with clean water access and wastewater systems and is primarily funded by private institutions, corporate partners and grassroots donations, there may be hundreds of people in the county without a dependable water supply. The exact number is unknown because information on whether existing water systems provide safe drinking water is not gathered by the U.S. Census. DigDeep works with the McDowell Public Service District utility provider to identify residents who need a water hookup and helps secure grants from the U.S. Department of Agriculture's rural development program to extend water trunk lines to hard-to-reach areas. In some cases, the nonprofit helps pay to connect the federally supported water lines directly to people's homes. It is also helping to install wastewater treatment facilities to more than 400 residents who either have inadequate systems or flush waste into nearby creeks. The water supply throughout the county is unreliable because of the area's close historical ties to the rise and fall of the coal economy, said George McGraw, DigDeep's chief executive. When coal operations came to McDowell, businesses operated in a 'closed loop' environment. Coal companies paid workers to build and work in the mines, they owned the houses where miners lived, and they built the water lines that served those houses, McGraw said. When the coal industry began to peter out, companies exited the county, leaving behind an aging system of pipes and drains. To secure water in the county today, hundreds of people fill plastic jugs from roadside springs or mine shafts, McGraw said. To get drinking water, they may use the bathroom in a store, a neighbor's house, or a school. DigDeep has several projects in the planning stages in McDowell. But the Trump USDA budget proposal would chop the rural water program by two-thirds, meaning some public works projects may never get completed. Someone else will have to foot the bill or the system will continue to crumble, leaving many people in McDowell County without a basic necessity. 'It's not like the burden goes away,' McGraw said. 'The burden just shifts, and utilities are forced to raise rates on customers, many of whom are below the poverty line.'
San Francisco Chronicle
22-07-2025
- Business
- San Francisco Chronicle
McDowell County, West Virginia, birthplace of food stamps, faces a disappearing safety net
For nonprofits in McDowell County, West Virginia, the federal cuts in the One Big Beautiful Bill Act threaten a lifeline. Many of McDowell's 17,000 residents rely on federal programs and the nonprofits they fund to get by. The county's tax base and population have significantly declined since 1950, when McDowell was the top coal-producing county in the nation and had about 100,000 residents. Now, more than half the children in the county receive federal Children's Health Insurance Program benefits, and about one-third of seniors are on Medicaid, the federal health insurance program for the poor. Decades after the Kennedy administration made the county a first test of food stamps, nearly half the county's residents receive supplemental nutrition assistance, or SNAP, the Food Stamp Program's successor. The strains created by new eligibility restrictions on SNAP as a result of the passage of President Trump's domestic policy bill will be especially dire in places like McDowell County, where more than one-third of the population lives below the federal poverty line, said Rosemary Ketchum, executive director of the West Virginia Nonprofit Association. 'These federal cuts are starving people,' she said. Since the interruption in federal support tied to President Trump's January executive orders barring grants related to 'gender ideology'; diversity, equity, and inclusion; and environmental justice, Ketchum said many of the 9,000 or so nonprofits in her state have laid off staff. Others, she said, are dipping into whatever reserves they have to pay their employees. Those reserves are slim, if they exist at all. Taken together, the seven nonprofits that receive federal grants in McDowell County run on a 3 percent operating margin, according to data tabulated by the Urban Institute's National Center for Charitable Statistics. If all federal support disappeared, the center found, all the county's nonprofits would be at risk of going under unless other funding was provided. No Plan B In a poor state like West Virginia, which is already facing a budget deficit and lacks the legions of philanthropic donors who got rich on Wall Street or in Silicon Valley, nonprofits don't have a plan B, said Kathy Gentry, executive director of Safe Housing and Economic Development, or SHED, a McDowell nonprofit housing provider. The nonprofit's clients, many of whom are elderly or disabled, rely on U.S. Housing and Urban Development support to cover the rent at the 94 housing units SHED manages. Gentry's pay was temporarily cut for six weeks this spring because part of her salary comes from a HUD capacity-building grant that the administration deemed at cross-purposes with Trump's anti-DEI policy agenda. Her full paycheck resumed, but Gentry worries further cuts will force her to lay off staff. Already the nonprofit operates at a loss. In its 2023 tax filing, the most recent available, SHED's $663,000 in expenses outstripped its revenue by nearly $200,000. 'We're in a quandary here — all nonprofits are,' Gentry said. 'Are we going to exist? Will we have to dissolve?' Health care and internet access Since 2015, Heidi Binko and her team at the Just Transition Fund have worked with economic development agencies and nonprofits in areas where the coal industry once flourished. That can mean helping a local organization identify or write a grant or provide a matching grant. The fund was created by the Rockefeller Family Foundation and Appalachian Funders Network to help coal towns capture some of the dollars provided in the 2015 Clean Power Plan, or POWER Act, passed during the Obama administration. Since then, the fund says it has helped coal communities in West Virginia and throughout the nation secure more than $2 billion in federal grants. Binko hopes the fund can continue to attract federal resources to towns with high poverty rates. 'There are still federal dollars available,' she said. 'They haven't all been zeroed out.' The recently passed domestic policy bill, for instance, contains $50 billion in health care grants over 10 years for rural providers, though it is unclear whether that money will keep hospitals and clinics that rely on Medicaid dollars afloat. Two hallmarks of the Biden administration's infrastructure and stimulus acts — transitioning away from a carbon-based economy and providing federal resources among different populations equitably — are not a focus of the Trump plan. As a result, Binko fears recent progress will be dimmed. For instance, Generation West Virginia, a Just Transition Fund grantee worked with McDowell County to apply for funds from the Biden administration's Digital Equity Act to run an elementary and middle school digital literacy program. Programs under the act were terminated in May. The cancellation of the Digital Equity Act is a setback for McDowell, where 20 percent of households don't have a broadband internet connection, according to a Generation West Virginia report. Clean water Other, more basic infrastructure is lacking in the county. According to DigDeep, a nonprofit that assists with clean water access and wastewater systems and is primarily funded by private institutions, corporate partners and grassroots donations, there may be hundreds of people in the county without a dependable water supply. The exact number is unknown because information on whether existing water systems provide safe drinking water is not gathered by the U.S. Census. DigDeep works with the McDowell Public Service District utility provider to identify residents who need a water hookup and helps secure grants from the U.S. Department of Agriculture's rural development program to extend water trunk lines to hard-to-reach areas. In some cases, the nonprofit helps pay to connect the federally supported water lines directly to people's homes. It is also helping to install wastewater treatment facilities to more than 400 residents who either have inadequate systems or flush waste into nearby creeks. The water supply throughout the county is unreliable because of the area's close historical ties to the rise and fall of the coal economy, said George McGraw, DigDeep's chief executive. When coal operations came to McDowell, businesses operated in a 'closed loop' environment. Coal companies paid workers to build and work in the mines, they owned the houses where miners lived, and they built the water lines that served those houses, McGraw said. When the coal industry began to peter out, companies exited the county, leaving behind an aging system of pipes and drains. To secure water in the county today, hundreds of people fill plastic jugs from roadside springs or mine shafts, McGraw said. To get drinking water, they may use the bathroom in a store, a neighbor's house, or a school. DigDeep has several projects in the planning stages in McDowell. But the Trump USDA budget proposal would chop the rural water program by two-thirds, meaning some public works projects may never get completed. Someone else will have to foot the bill or the system will continue to crumble, leaving many people in McDowell County without a basic necessity. 'It's not like the burden goes away,' McGraw said. 'The burden just shifts, and utilities are forced to raise rates on customers, many of whom are below the poverty line.'
Winnipeg Free Press
22-07-2025
- Business
- Winnipeg Free Press
McDowell County, West Virginia, birthplace of food stamps, faces a disappearing safety net
For nonprofits in McDowell County, West Virginia, the federal cuts in the One Big Beautiful Bill Act threaten a lifeline. Many of McDowell's 17,000 residents rely on federal programs and the nonprofits they fund to get by. The county's tax base and population have significantly declined since 1950, when McDowell was the top coal-producing county in the nation and had about 100,000 residents. Now, more than half the children in the county receive federal Children's Health Insurance Program benefits, and about one-third of seniors are on Medicaid, the federal health insurance program for the poor. Decades after the Kennedy administration made the county a first test of food stamps, nearly half the county's residents receive supplemental nutrition assistance, or SNAP, the Food Stamp Program's successor. The strains created by new eligibility restrictions on SNAP as a result of the passage of President Trump's domestic policy bill will be especially dire in places like McDowell County, where more than one-third of the population lives below the federal poverty line, said Rosemary Ketchum, executive director of the West Virginia Nonprofit Association. 'These federal cuts are starving people,' she said. Since the interruption in federal support tied to President Trump's January executive orders barring grants related to 'gender ideology'; diversity, equity, and inclusion; and environmental justice, Ketchum said many of the 9,000 or so nonprofits in her state have laid off staff. Others, she said, are dipping into whatever reserves they have to pay their employees. Those reserves are slim, if they exist at all. Taken together, the seven nonprofits that receive federal grants in McDowell County run on a 3 percent operating margin, according to data tabulated by the Urban Institute's National Center for Charitable Statistics. If all federal support disappeared, the center found, all the county's nonprofits would be at risk of going under unless other funding was provided. No Plan B In a poor state like West Virginia, which is already facing a budget deficit and lacks the legions of philanthropic donors who got rich on Wall Street or in Silicon Valley, nonprofits don't have a plan B, said Kathy Gentry, executive director of Safe Housing and Economic Development, or SHED, a McDowell nonprofit housing provider. The nonprofit's clients, many of whom are elderly or disabled, rely on U.S. Housing and Urban Development support to cover the rent at the 94 housing units SHED manages. Gentry's pay was temporarily cut for six weeks this spring because part of her salary comes from a HUD capacity-building grant that the administration deemed at cross-purposes with Trump's anti-DEI policy agenda. Her full paycheck resumed, but Gentry worries further cuts will force her to lay off staff. Already the nonprofit operates at a loss. In its 2023 tax filing, the most recent available, SHED's $663,000 in expenses outstripped its revenue by nearly $200,000. 'We're in a quandary here — all nonprofits are,' Gentry said. 'Are we going to exist? Will we have to dissolve?' Health care and internet access Since 2015, Heidi Binko and her team at the Just Transition Fund have worked with economic development agencies and nonprofits in areas where the coal industry once flourished. That can mean helping a local organization identify or write a grant or provide a matching grant. The fund was created by the Rockefeller Family Foundation and Appalachian Funders Network to help coal towns capture some of the dollars provided in the 2015 Clean Power Plan, or POWER Act, passed during the Obama administration. Since then, the fund says it has helped coal communities in West Virginia and throughout the nation secure more than $2 billion in federal grants. Binko hopes the fund can continue to attract federal resources to towns with high poverty rates. 'There are still federal dollars available,' she said. 'They haven't all been zeroed out.' The recently passed domestic policy bill, for instance, contains $50 billion in health care grants over 10 years for rural providers, though it is unclear whether that money will keep hospitals and clinics that rely on Medicaid dollars afloat. Two hallmarks of the Biden administration's infrastructure and stimulus acts — transitioning away from a carbon-based economy and providing federal resources among different populations equitably — are not a focus of the Trump plan. As a result, Binko fears recent progress will be dimmed. For instance, Generation West Virginia, a Just Transition Fund grantee worked with McDowell County to apply for funds from the Biden administration's Digital Equity Act to run an elementary and middle school digital literacy program. Programs under the act were terminated in May. The cancellation of the Digital Equity Act is a setback for McDowell, where 20 percent of households don't have a broadband internet connection, according to a Generation West Virginia report. Clean water Other, more basic infrastructure is lacking in the county. According to DigDeep, a nonprofit that assists with clean water access and wastewater systems and is primarily funded by private institutions, corporate partners and grassroots donations, there may be hundreds of people in the county without a dependable water supply. The exact number is unknown because information on whether existing water systems provide safe drinking water is not gathered by the U.S. Census. DigDeep works with the McDowell Public Service District utility provider to identify residents who need a water hookup and helps secure grants from the U.S. Department of Agriculture's rural development program to extend water trunk lines to hard-to-reach areas. In some cases, the nonprofit helps pay to connect the federally supported water lines directly to people's homes. It is also helping to install wastewater treatment facilities to more than 400 residents who either have inadequate systems or flush waste into nearby creeks. The water supply throughout the county is unreliable because of the area's close historical ties to the rise and fall of the coal economy, said George McGraw, DigDeep's chief executive. When coal operations came to McDowell, businesses operated in a 'closed loop' environment. Coal companies paid workers to build and work in the mines, they owned the houses where miners lived, and they built the water lines that served those houses, McGraw said. When the coal industry began to peter out, companies exited the county, leaving behind an aging system of pipes and drains. Monday Mornings The latest local business news and a lookahead to the coming week. To secure water in the county today, hundreds of people fill plastic jugs from roadside springs or mine shafts, McGraw said. To get drinking water, they may use the bathroom in a store, a neighbor's house, or a school. DigDeep has several projects in the planning stages in McDowell. But the Trump USDA budget proposal would chop the rural water program by two-thirds, meaning some public works projects may never get completed. Someone else will have to foot the bill or the system will continue to crumble, leaving many people in McDowell County without a basic necessity. 'It's not like the burden goes away,' McGraw said. 'The burden just shifts, and utilities are forced to raise rates on customers, many of whom are below the poverty line.' ______ Alex Daniels is a senior reporter at the Chronicle of Philanthropy, where you can read the full article. This article was provided to The Associated Press by the Chronicle of Philanthropy as part of a partnership to cover philanthropy and nonprofits supported by the Lilly Endowment. The Chronicle is solely responsible for the content. For all of AP's philanthropy coverage, visit
