Opinion: Medicaid cuts in ‘big, beautiful bill’ will wallop needy Kansans and rural hospitals
- Kansas Reflector opinion
- Jul 1
- 4 min read
By Dave Ranney, Kansas Reflector opinion
In coming weeks, our news feeds will be loaded with stories on the Trump administration’s plan to cut hundreds of billions of dollars from the nation’s Medicaid program.
Already, we’ve heard stories about non-U.S. citizens being on the rolls, able-bodied adults not having to work, and — of course — widespread fraud and abuse.
Yadda, yadda, yadda.
Before we go down this road, as Kansans, we need to get a few things straight.
Medicaid and Medicare are not the same thing. Medicare is designed to ensure health care for those of us over 65; Medicaid tries to do the same for the poor, our elders and people with disabilities.
Because Medicaid is underwritten by a mix of state and federal funds, states have a say in how their programs are administered. Since 2012, the Kansas Legislature has balked at taking advantage of federal incentives meant to close post-Obamacare gaps in Medicaid eligibility. Consequently, Kansas’ Medicaid program — known as KanCare — is one of the most restrictive in the nation.
Depending on your politics, you may think this is a good thing. But it doesn’t stop uninsured people from going to the emergency room. Hospitals just won’t be paid for treating them.
Other Kansas-specific facts to consider:
Childless adults are not eligible for Medicaid.
A parent caring for children is not eligible for Medicaid if their income exceeds 38% of the “federal poverty level,” which, for a parent with two kids, comes to about $843 a month.
The kids are most likely eligible, but the parents are not. Still, 70 percent of parents on Medicaid are working. Typically, the remaining 30 percent are either enrolled in a job training program or at home caring for a frail elder or child who should not be left alone.
Between 30 and 40% of all births are covered by Medicaid. About half of Medicaid recipients in Kansas are children.
In dire emergencies involving patients who aren’t U.S. citizens — complicated childbirths, for example — doctors and hospitals might be eligible for Medicaid reimbursement. The billing process, however, is ill-defined, restrictive and often not worth the hassle.
In Kansas, Medicaid does not pay for non-emergent care for non-citizens. Other states’ programs are not as restrictive.
In its latest annual report, the Kansas Attorney General’s Office notes that from July 1, 2022, to June 30, 2023, its Medicaid Fraud and Abuse Unit “obtained judgements” for more than $308,000. During the same period, Medicaid spending in Kansas came in around $5.5 billion. That’s not a lot. The unit’s 2024 report isn’t out yet.
Forty percent of Kansas nursing home residents’ stays are covered by Medicaid.
To be clear, Medicaid does not give money to poor people. Instead, it pays KanCare providers — three giant, for-profit managed care organizations — to provide care. These providers also are charged with helping frail elders and people with disabilities live in community-based settings because it’s a lot cheaper than paying for nursing homes to care for them.
Nevertheless, nursing homes are loaded with Medicaid patients and community-based options have long waiting lists.
Cutting Medicaid won’t help.
Analysts who have studied the contents of the “big, beautiful bill” working its way through Congress are telling advocates to be on the lookout for three scenarios.
First, supporters will insist they don’t want to cut Medicaid; instead, they will say we need to increase accountability because there’s so much fraud and abuse. And for this to happen, current and would-be recipients will need to jump through additional documentation hoops. Those who stumble won’t be eligible. Fewer recipients will result in less spending.
Second, the bill calls for rescinding a Biden-era regulation that required nursing homes to hire more nurses and nurse aids. Shelving the requirement would trim billions of dollars in proposed Medicaid spending. The nursing home industry supports the change, arguing its profit margins wouldn’t cover the costs and even if they did, there aren’t enough nurses and aids available for hire.
Finally, Medicaid has long allowed states to collect a “surcharge” from hospitals with the understanding that the revenues would be used to draw down additional federal dollars.
Hospitals welcomed the arrangement, knowing that for every dollar put in, they would get back roughly $1.50. The bill’s supporters, however, call this “money laundering.” Lawmakers hope to either freeze or significantly reduce the federal payments, ignoring repeated warnings that many rural hospitals would be forced to close or downsize.
A recent survey by the REACH Healthcare Foundation and the United Methodist Health Ministry Fund found that 26 rural hospitals in Kansas are already in “immediate risk of closure,” and another 63 are teetering.
A review commissioned by the Kansas Hospital Association found that “over half” of the state’s hospitals are “operating at a loss.”
None of this is good for Kansas, and no one knows this better than our own senators and representatives.
Dave Ranney is a retired newspaper reporter. Through its opinion section, Kansas Reflector works to amplify the voices of people who are affected by public policies or excluded from public debate. Find information, including how to submit your own commentary, here.
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