Proposed Medicaid cuts threaten rural healthcare in Washington, experts warn

Proposed federal Medicaid cuts could devastate Washington state, hitting rural communities the hardest. More than 1.8 million residents rely on Medicaid for health care. A Republican-led plan in the U.S. House to slash $880 billion could lead to service reductions, higher costs, and hospital closures.

According to Manuel Navarro, CEO of Columbia Valley Community Health, approximately 46% of the organization's patients are covered by Medicaid. The organization provides essential medical services to rural communities in Chelan and Douglas counties.

"Cutting Medicaid is a cost shift. The concept of saving money by cutting Medicaid is a fallacy, a cost shift. If you don't take care of the patients in a rural health clinic or community health center or a physician's office, those patients are going to have issues that require attention down the road. You are going to spend it down the road on higher-cost care, and you're going to spend it in other areas of the economy. A healthy population is a good economy," Navarro said.

Medicaid in Washington state, known as Apple Health, is a government program that provides free or low-cost health coverage to low-income individuals and families. It is jointly funded by the federal and state governments and managed by the Washington State Health Care Authority. Medicaid covers a wide range of services, including doctor visits, prescriptions, and mental health care.

More than 800,000 adults in Washington are covered by Medicaid, according to KFF, a nonprofit research organization.

A report by U.S. Sen. Maria Cantwell's office found that in 2023, Washington state received $12.5 billion in federal Medicaid funding, accounting for 57% of all federal funding to the state.

Direct impact on rural health care

Federally Qualified Health Centers in Washington's rural areas rely on Medicaid funding. In Central Washington, Congressional District 4 has 10 such centers that serve more than 420,000 patients, with Medicaid making up 48% of their revenue.

In rural areas, people have fewer options for providers and services than in urban areas. Hospital or clinic closures, according to Navarro, could be detrimental to individuals' ability to find care.

"If providers in rural areas can't sustain their services, people will have to travel long distances just to access basic care, which further burdens both patients and health care providers," Navarro said.

In Congressional District 4, 70% of children younger than 19 rely on Apple Health for coverage. These communities depend more on Medicaid to ensure access to vital health services, especially for youth.

Financial and

economic

consequences of Medicaid cuts

If Medicaid is cut, the state budget would need to make up for the gap. Washington lawmakers are already trying to solve a projected $12 billion budget deficit for the next four years.

According to Andrew Jones, CEO of Confluence Health in North Central Washington, Medicaid and Medicare account for nearly 68% of the organization's budget. Jones warned that cuts to these programs would disproportionately affect rural hospitals, many of which are already struggling financially.

"Most hospitals in Washington don't return a profit. Many have no margin at the end of the year," Jones said. "If Medicaid is cut further, it will just worsen an already existing problem, forcing commercial insurers and employers to bear the cost, which will drive up premiums for everyone."

For many hospitals, especially those in rural communities, Medicaid is the lifeblood of financial stability. Reducing this funding could lead to layoffs, service reductions, and even closures. According to Jones, rural hospitals may not have the economic resilience to withstand such cuts, potentially leading to a domino effect of health care disruptions.

"We have more Medicaid patients than urban communities. It's hard to fathom what would happen in the state because hospitals are so fragile to begin with," Jones said.

Cassie Sauer, CEO of the Washington State Hospital Association, said cuts to Medicaid threaten not only access to care for Medicaid recipients but for the entire community.

"Hospitals will be forced to close services like maternity care, mental health services, and outpatient care," Sauer said in a press release. "These closures will affect everyone, not just Medicaid patients."

The potential cuts to Medicaid have wide-reaching consequences that extend beyond health care systems and hospitals. As Navarro pointed out, a healthier population translates to a stronger economy.

According to Medicaid advocates, the program helps ensure that individuals receive the care they need when they need it, preventing the development of more serious health issues that would require costly interventions later on.

"There is somewhat of a stigma around Medicaid, but people with Medicaid or Apple Health are just your neighbors and relatives, your friends, and their kids. It's not some other group of people somewhere else. It is the people all around you. It's everybody," Jones said.

Reneé Diaz may be contacted at Renee.diaz@wenatcheeworld.com. Collaborative reporting by The Wenatchee World, NWPB and Murrow College of Communication Newsroom Fellowship.