In West Virginia, Medicaid is a lifeline, but GOP cuts could devastate the state

ROMNEY, W.Va. — Hampshire Memorial Hospital is nestled deep in the Appalachian Mountains, past more than 20 miles of winding mountain roads dotted with lush trees and ridges. It is the only hospital for a county that spans 645 square miles and, for many of its 24,000 residents, is the sole option for health care ranging from routine ailments to life-threatening emergencies.

Like every rural hospital in West Virginia, Hampshire Memorial relies deeply on Medicaid, the government health insurance program for the poor that covers about one-third of residents in this deep-red state. But its ability to continue treating Hampshire County — among the poorer and sicker counties in the country — has been thrown into doubt by President Donald Trump’s sprawling tax and spending package that he has said he wants on his desk by July 4.

The proposal, which passed the House last month, proposes codifying trillions of dollars in tax cuts from Trump’s first term that primarily benefit the wealthy, along with hundreds of billions of dollars of new spending on immigration enforcement and national defense. It proposes paying for those items largely by slashing Medicaid, which, if passed, would mark the biggest cut in the program’s nearly 60-year history.

During negotiations in the House, Trump warned Republicans in a closed-door meeting: “Don’t [expletive] around with Medicaid.” But Trump and his aides have been uneven and often contradictory in their promises, sometimes arguing that Medicaid benefits are safe while “waste, fraud and abuse” were not. But the House version of the bill does not make such distinctions while calling for nearly $800 billion in cuts to the program.

Hospital groups hoped the Senate would rein in some of the House’s Medicaid cuts, lobbying senators such as West Virginia Republicans Shelley Moore Capito and Jim Justice, as well as Sens. Susan Collins, R-Maine, Lisa Murkowski, R-Alaska, and Josh Hawley, R-Mo., all of whom have raised concerns about the challenges rural hospitals in their states already face. But the proposal released by Senate Republicans two weeks ago lays out even deeper cuts to the program, spurring panic and frustration among rural hospitals that say they are barely making ends meet as it is.

“We are very concerned about this latest development. This will be devastating for the health care in our community, and we hope elected officials listen to their constituents that put them in office,” said Heather Sigel, vice president of operations at Hampshire Memorial Hospital.

“In an ideal world, we would love to be all things to all people, but critical access hospitals are historically very lean,” Ms. Sigel said.

Vital facilities

Critical access hospitals, which cannot exceed 25 inpatient beds, are rural health facilities that receive higher government payments because of the communities they serve.

“We look at what we can afford to offer to the community and what’s fiscally responsible for us to offer,” Ms. Sigel said. “If we have these major cuts to Medicaid, we would most certainly have to look at our services. We would have to pare down.”

At least five hospitals in West Virginia are at risk of immediate closure if the changes to Medicaid go into effect, said Rich Sutphin, president of the West Virginia Rural Health Association. (Hampshire Memorial is not among those five.)

The state already struggles with access to maternity care, emergency medical transport and mental health, and has few hospitals that are able to perform complicated surgeries or treat high-risk patients. Mr. Sutphin said his group has been in “constant contact” with Ms. Capito, Mr. Justice and the state’s two House members, Reps. Carol Miller and Riley Moore, both Republicans who voted for Trump’s budget bill.

The House and Senate bills both propose new Medicaid work and reporting requirements for able-bodied adults between 19 and 64 years of age that the nonpartisan Congressional Budget Office estimates will reduce federal Medicaid spending by $793 billion over 10 years and result in 7.8 million fewer enrollees. The Senate version of the bill could prompt even steeper cuts to the program by reining in a financing maneuver that hospital groups say would slash payments to their facilities — especially rural hospitals.

All must receive care

Hospitals cannot legally turn anyone away from the emergency room, including those who are uninsured. That means the hospital eats the cost of treating someone without insurance, rather than receiving reimbursement from Medicaid, Medicare or a private insurer. Hospitals say that the Medicaid changes will result in more uninsured people showing up to the emergency room when they are sicker because they will avoid receiving health care as long as possible, creating an enormous financial strain.

“The big risk is hospitals in West Virginia and health care providers in general are going to lose revenue because they’re going to have a rise in uncompensated care,” Mr. Sutphin said. “In a lot of our communities, the hospital is the economic driver, so if we don’t have a hospital to provide care, other businesses aren’t going to want to locate in those communities.”

Ms. Capito earlier this month said she was speaking with hospitals, who “obviously” were concerned about a reduction in what is referred to as the provider tax — in which states charge extra taxes to medical providers and in return give them higher Medicaid payments. That in turn brings in more federal matching funds for Medicaid, which are pegged to state payments. Some conservatives have dubbed the tax a form of “money laundering.”

Mr. Justice said the cut to the provider tax “came out of nowhere,” adding that it would “hurt our rural hospitals and hurt them in a big way, and I don’t want to see that at all.”

A demand for services

On a Tuesday morning this month, more than a dozen people sat in the waiting room of Hampshire Memorial’s rural health clinic, where patients can see a primary care physician and other specialty providers. For most residents of Hampshire County, coming by health care like this isn’t easy: There is one primary care physician per 3,880 people in the county, nearly double the ideal ratio, no urgent care facility and often few options outside of Hampshire Memorial’s eight-bed emergency department, which treats 10,000 to 11,000 patients a year.

Ms. Sigel said administrators at Hampshire Memorial have not yet evaluated which services it could and could not continue offering if the Medicaid cuts go into effect, as they are still holding out hope they can “educate our legislators.” Sherif Kaiser, vice president of medical affairs at Hampshire Memorial Hospital, said radiology services such as CT scans and MRIs are among the hospital’s biggest expenses and would need to be evaluated.

Under the Affordable Care Act, states were given the option to expand Medicaid to adults making up to 138% of the federal poverty level — about $43,000 for a family of four. West Virginia was one of the first states to adopt the expansion, which now covers about 160,000 people in the state. It brought thousands of jobs to the state in large part because hospitals were able to add personnel and resources, said Kelly Allen, executive director of the West Virginia Center on Budget and Policy.

Republicans tried to slash the Medicaid expansion when they attempted to repeal the Affordable Care Act during Trump’s first term. But the effort was wildly unpopular and Republicans have avoided it since Sen. John McCain, R-Ariz., killed the effort in 2017.

Medicaid has proved to be popular at the ballot box, making it another potential third rail in American politics. Since 2017, advocates have put expanding the safety net program directly to voters in seven conservative-leaning states. They won each time.

The changes to Medicaid and the ACA’s marketplace exchanges in the House and Senate versions of the bill would accomplish some of the key cutbacks Republicans sought eight years ago. The legislation would also allow pandemic-era enhanced subsidies for health insurance through ACA marketplaces to expire at the end of the year — sharply raising out-of-pocket costs for many Americans. The Congressional Budget Office estimates 4.2 million people would lose insurance as a result, compared with leaving the subsidies in place.

The bill is unpopular among Americans, but opinions about specific provisions are mixed. Overall, 42% of Americans oppose the budget bill “changing tax, spending and Medicaid policies,” compared with 23% who support the bill and 34% who say they have no opinion, according to a Washington Post-Ipsos poll conducted this month.

Striking a balance

While most Americans approve of the new work requirements, they are less comfortable with the prospect of people losing coverage under tighter eligibility rules. Republican lawmakers and Trump health officials argue that Americans have to “earn the right” to receive health insurance through Medicaid if they are able to work.

The majority of adults on Medicaid are already working, according to KFF, a health policy research organization, with 44% working full time and 20% working part time. The Republican bill provides Medicaid exemptions for certain groups of people, including pregnant women, those who are disabled, some primary caregivers and those receiving substance abuse treatment.

Health care workers in states that would be hardest hit by cuts to Medicaid — KFF estimates more than 50,000 people in West Virginia alone could lose coverage — say the work requirements ignore the reality on the ground.

In Hampshire County, job opportunities are sparse; the hospital is the county’s second-largest employer, and administrators said they will almost certainly have to evaluate staffing if the Republican bill passes, leaving even fewer jobs in the county and less health care. Much of the work that is available is hourly or seasonal, making it difficult for people to consistently report 80 hours of work a month. Already, the mean travel time to work for those age 16 and older in Hampshire County is 40 minutes, according to the U.S. Census Bureau.

Beyond the work requirements themselves, many states are ill-equipped to take on the administrative burden of sifting through reams of additional paperwork to determine whether Medicaid recipients are meeting the new requirements. Even those who are meeting them may struggle to provide the necessary documentation, such as pay stubs, or submit in a timely manner, health care advocates said. And states will have to conduct eligibility redeterminations at least twice a year for some on Medicaid.

Other Trump administration cuts will compound the challenges states like West Virginia will face if the Medicaid changes go into effect. Earlier this year, the Department of Health and Human Services announced a 90% cut in funding to navigators — outreach organizations that help sign people up for health insurance through the ACA marketplace and Medicaid — that could help people navigate the new requirements.

Jeremy Smith, a member of the board of directors for the West Virginians for Affordable Health Care nonprofit group, said state organizations will not be able to do a quarter of the work they have been doing to sign people up for insurance and re-enroll them year-to-year once the cuts go into effect. Across the state, there are about 12 people working to sign residents up for insurance. Mr. Smith says there may soon be only one person to help people.

“A lot of people, I think they’re just going to give up after they hit a couple roadblocks. They’re just going to say, ‘I guess I don’t qualify anymore’ and not proceed anymore,” Mr. Smith said. “I would think there will be several thousand people not retaining Medicaid due to the work requirements. My guess is the largest reason will be because they won’t be able to navigate the paperwork.”