Michigan’s rural hospitals, nursing homes would bear the brunt of federal Medicaid cuts

Medicaid provides medical insurance for nearly 3 million low-income Michiganders, but that could be in jeopardy as Republicans in the U.S. House of Representatives work to make cuts to the federal agency that funds the program.

Rural hospitals and nursing homes in particular rely heavily on Medicaid reimbursements to upgrade their equipment, pay their workers, and generally care for their patients. If those payments disappear, the health of residents who depend on these facilities and the well-being of local economies that they support could take a turn for the worse.

Medicaid covers a slew of health care services that some patients would otherwise be unable to afford, but in Michigan’s rural communities, it’s also a lifeline that keeps the doors of 65 rural hospitals open, Brian Peters, CEO of the Michigan Health and Hospital Association, said in a March 1 memo.

Since 2005, 195 rural hospitals in the United States have closed, including three in Michigan, according to the University of North Carolina Rural Health Research Program. Rural hospitals typically face economic burdens with staffing and technologies that are different from those in urban areas because their patients tend to be older, sicker and lower-income. Of the 41 Michigan counties where over 20% of residents are covered by Medicaid, 37 are rural, according to data from the Michigan League for Public Policy, a nonpartisan research group.

“Losing rural hospitals would devastate communities across Michigan, depriving them of access to emergency care, maternity services, mental health treatments, long-term care and other life-saving treatments,” Peters said in his report. “It would also eliminate jobs, weaken local economies and force residents to travel longer distances for healthcare, increasing the risk of delayed or missed treatment.”

The approximately 475 nursing homes in Michigan would see similar struggles if they were deprived of Medicaid payments. Medicaid is the primary payer for long-term care facilities, whose services can otherwise be too expensive for low-income individuals or older people on a fixed income.

More than half of Michigan’s nursing home residents are enrolled in Medicaid, said Amber Bellazaire, a Michigan League for Public Policy analyst. Without the program funding, the burden would shift to older people and their families to pick up the bill or find alternative care options.

Kirsten Grady is a Lansing-area social worker who has worked with older people and with individuals in rural areas. She told the Michigan Independent that the potential loss of Medicaid has created an undercurrent of fear among recipients who worry they may not be able to afford their medical care, as well as among those who operate assistance programs and are now concerned they may not be able to meet their financial obligations.

“There’s no other resource we can point to and say, Oh, if your Medicaid goes away, here’s something else that’ll work for you, because there isn’t anything else that’s going to work quite like Medicaid does,” Grady said.

Grady knows personally what it’s like to rely on Medicaid for help with health care needs. She was raised in Saginaw by a single mother who worked jobs that offered no benefits. At age 10, Grady developed a severe throat infection that could have been fatal if she hadn’t had Medicaid insurance coverage to pay for the necessary medical intervention.

“If we didn’t have Medicaid, I don’t even know if we would have been able to survive the medical bills that would have come from that,” Grady said.

Medicaid is jointly funded by the federal government and state governments. In Michigan, about 76% of Medicaid spending is funded by federal dollars, according to the Michigan League for Public Policy. If significant cuts were made at the federal level, it would inevitably put a strain on state finances.

“It’s very likely that the state would not be able to make up that gap, and then therefore would be forced to figure out where they are cutting benefits or coverage for different populations,” Bellazaire told the Michigan Independent.

The Michigan Health and Hospital Association estimates the state will be left with a $1.73 billion budget deficit if Congress passes the proposed budget. Grady believes that the consequences of a loss of federal funding would affect the state for years to come.

“If we don’t have healthy citizens, then just everything can come to a halt or decline,” Grady said. “You don’t have workers who are healthy enough to work, you don’t have children that grow into healthy, functioning adults if they don’t get the medical care that they need. So the problems from Medicaid cuts will have rippling effects that will last for a long time.”