Medicaid cuts would alter rural health care

Medicaid looks to be one of the big corks Congress hopes will help plug an estimated $4.7 trillion flood of red ink that accompanies tax cuts Republicans plan to pass this spring.

They’re going to need a big one. According to published news accounts, “GOP leaders have directed the House Energy and Commerce Committee, which oversees Medicare and Medicare, to find $880 billion in savings.”

The White House continues to deny it will seek any cuts to Medicaid, Medicare, or Social Security to finance its massive tax cut.

DOGEmaster Elon Musk, however, did note recently that his group would go after “the waste and fraud” of entitlement spending “that’s … sort of a half-trillion, maybe $600 billion to $700 billion a year.”

While Musk offered no evidence to support the allegation, the House Energy and Commerce Committee is exactly the place to make changes to both federal health care programs.

Indeed, as The New Yorker recently reported, “Medicare and Medicaid make up more than 97% of the spending” the committee oversees.

As noted here recently, rural America is deeply dependent on both programs and any cuts to either would carry severe consequences to both rural well-being and local economies.

A dive into just Medicaid shows this heavy dependence. According to a mid-March report from the Tribune News Service:

• 24% of all non-elderly individuals in rural areas use Medicaid as their primary health-care provider.

• 18.3% of all adults between age 19 and 64 who live in the rural United States are on Medicaid while that number for “metro” adults is a lower 16.3%.

• In 15 states, eight of which voted for Donald Trump in the 2024 presidential election, at least 20% of working-age adults are covered by Medicaid.

• At least 26 GOP House districts have Medicaid recipient rates of 30% or greater of their population; one such district is Speaker of the House Mike Johnson’s.

The numbers are worse if you examine the impact Medicaid cuts will have on rural nursing homes, already fighting to survive due mostly to lack of state and federal funding, difficulty in finding qualified employees in fast-emptying, fast-aging rural counties and continually rising health-care costs.

According to the American Health Care Association, “nearly 800 nursing homes” closed between February 2020 and July 2024.

Moreover, 85% of the closings, it documents, were in “rural communities” that now form “nursing home deserts.” Nationwide, since 2020, “there are 62,567 fewer nursing homes beds.”

A February 2024 National Rural Health Association white paper notes that the current closure rate is far greater than the 10 years prior to the COVID-19 pandemic when 472 nursing homes “in 400 rural counties” closed.

And Medicaid lies at the heart of the crisis. “Medicaid is the primary payer for 62% of all nursing home residents, making adequate Medicaid payments paramount to financial viability,” the NRHA reports.

Cuts in Medicaid payment rates, say nursing home providers, will seriously jeopardize the entire adult-care system in rural areas.

That means that if Congress enacts Medicaid cuts to accommodate tax cuts, today’s remaining 4,144 rural nursing homes — with 353,732 beds — will face even greater financial peril.

And cuts would affect more than just rural patients and nursing home residents. For example, according to the online Wisconsin Examiner, 90,000 Wisconsinites hold Medicaid-funded home health-care jobs.

That $15 million annual payroll — with an overall economic impact four to five times that amount — helps fuel many rural economies.

Cuts, be they in Medicaid or taxes, won’t diminish rural health care needs. They will, however, drastically alter rural health care.