The effects of Medicaid cuts are expected to be felt by more than just the hundreds of thousands of Michiganders at risk of losing health insurance.
State and health industry leaders have said the cuts and spending package known as the “big, beautiful bill“ was signed into law July 4 by President Donald Trump will result in hospitals closing their doors, cutting staff and/or reducing available services to make up for losses in government funding.
Residents with private and employer-provided health insurance are likely to see increased costs as hospitals seek to recoup funding. Longer emergency room wait times may also hit communities already struggling with access challenges, industry experts said Tuesday, July 8, during a media roundtable.
“For Michigan hospitals alone, that number is north of $6 billion in negative impact over that 10-year horizon,” said Brian Peters, CEO of the Michigan Health & Hospital Association. “You cannot take $6 billion out of the hospital funding line without severe consequences in terms of access to patient care.”
Medicaid is a government-funded health insurance program for low-income individuals and families, people with disabilities, children and more.
Michigan receives billions of dollars each year from the federal government to administer the program, including nearly $17.5 billion in 2023.
The program covers about 2.6 million residents, or 25% of the population, making it the state’s largest health insurer. In some rural counties, 40% or more of the population is covered by Medicaid.
On Friday, Trump signed the 800-plus page “One Big Beautiful Bill Act,” which included $1.2 trillion in cutbacks to Medicaid health care and SNAP (Supplemental Nutrition Assistance Program – food stamps), largely by imposing new work requirements.
Medicaid recipients who are able-bodied will be required to work at least 80 hours per month in order to continue to receive benefits, beginning in 2027. That includes those over the age of 65 and parents with children older than 14.
Cuts to Medicaid and SNAP programs are expected to be about $1.2 trillion, despite the Trump administration repeatedly stating he would not cut Social Security, Medicare or Medicaid benefits.
A report compiled by the Congressional Budget Office estimated that 11.8 million people will lose Medicaid because of the bill and 3 million more will not qualify for SNAP benefits.
Elizabeth Hertel, director of the Michigan Department of Health and Human Services (MDHHS) said the cuts will have devastating effects on Michigan’s children and adults, especially in rural areas.
Michigan’s hospital count has declined from 240 to 134 over the last 50 years. Peters said an unspecified number of hospitals are on the brink financially and losing significant federal funding could push them over the edge.
“Certainly there is going to be added pressure for hospitals and health systems to say, ‘hey, we’re not getting adequate payment from Medicaid,’” Peters said. “We need to make that up somewhere or we’re going to be going out of business.”
When patients lose health care, Hertel said they’re likely to delay care until their condition becomes more severe and requires more expensive care. When they can’t afford their health bills, providers will pass those costs to everyone else, making checkups, procedures and insurance “more expensive for the rest of us.”
While Medicaid cuts won’t take effect until 2027, Peters said the impacts will be felt “sooner rather than later.” Hospitals tend to work on three-year and five-year strategic plans as they map out future expenses.
Jennifer Middlin, a Michigan Medicaid recipient and single mother of three, is already feeling the effects. Involved in a serious car accident four months ago, she suffered a traumatic brain injury that forced her out of work and into Medicaid eligibility.
Middlin needs speech and occupational therapy. Her recovery time is measured in years, not months, and she isn’t able to work like she used to. The thought of losing health care coverage is daunting.
“The harm and fear of this uncertainty is causing harm right now,” she said. “I don’t sleep, I don’t know what’s next for me. I can’t plan my future right now.”
For months, Democrats and health industry leaders have sounded the alarm and warned about the negative consequences of Medicaid cuts. On Tuesday, they maintained that course while calling for state lawmakers to help lessen the blow in the short-term.
Opponents of the Medicaid cuts said they have to play the long game. That includes finding ways to lessen the damage in the short term, while informing future leaders on the need for re-investment in the program.
“Let’s add new policies, new funding that could help to support the folks who are trying to create access in our communities throughout the state,” Peters said.
Trump has boasted about the bill package “strengthening Medicaid by eliminating waste, fraud and abuse and blocking illegal immigrants from receiving Medicaid.”
Monique Stanton, president and CEO of the Michigan League for Public Policy, said such comments are “a myth and a distraction.”
Stanton said 95% of all Medicaid payments are proper. Of the remaining 5%, about 80% are the result of insufficient documentation.
“Instead of investing in state and fraud control units or prosecutors who will actually stop corporate abuse, Republicans in Congress voted to take away people’s health care and use the money to pay for new tax breaks for billionaires and wealthy corporations,” she said.
For those who currently rely on Medicaid coverage or who are currently eligible, Tuesday’s message was this: For now, you still have coverage and you can still apply for coverage. Keep your contact information updated and keep an eye out for communication over the next year.
“At this point, we don’t have any changes to communicate,” Hertel said. “As decisions are made in appropriations at the state level and from the federal reconciliation bill are potentially implemented, like the community engagement requirements, we will continue to communicate often with the beneficiaries of the state of Michigan.”
For more information, visit the state’s Medicaid website, here.
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