Skip to Main Content

WASHINGTON — Hospitals panned the Senate’s latest health reform efforts on Thursday, blasting the chamber’s newly released draft legislation as a draconian and devastating contraction of funds that support health care for low-income Americans and children.

Every major hospital association criticized the draft, including the American Hospital Association, the Federation of American Hospitals, and America’s Essential Hospitals. AHA and FAH both called for the Senate to scrap its draft and start over.


The criticism of the Senate draft came from lobbyists representing health providers in all corners of the country, including those in tiny rural towns that support President Trump and large cities home to safety-net hospitals that provide indigent care to thousands of patients a year.

Hospitals focused their concerns on proposed cuts to the Medicaid program, which currently provides health insurance to some 73 million low-income and disabled Americans. The House bill slashed hundreds of billions in federal spending for the program, and the Senate bill would effectively enact those cuts more steeply and more quickly.

Both the House and Senate bills would also end Obamacare’s extra funding for Medicaid expansion, although the Senate version does so more gradually. Those extra funds have helped millions of Americans get access to affordable health insurance in states that chose to widen the program. That’s helped hospitals, who are far more likely to see bills paid by patients with insurance than those without.


“The Senate proposal would likely trigger deep cuts to the Medicaid program that covers millions of Americans with chronic conditions such as cancer, along with the elderly and individuals with disabilities who need long-term services and support,” Rick Pollack, CEO of the American Hospital Association, said in a statement. “Medicaid cuts of this magnitude are unsustainable and will increase costs to individuals with private insurance.”

Smaller safety-net hospitals and rural facilities are particularly concerned about how the cuts would hit providers that are already struggling to keep their lights on.

“There has to be a way to keep hospital doors open, maintain access to coverage, and also fix the health care exchanges to implement some form of market reform that keeps options available,” said Alan Morgan, CEO of the National Rural Health Association. “Members of Congress seem to be working toward a solution that perhaps makes things even worse.”

In the Senate’s proposal, there are some provisions aimed at dulling the blow of the Medicaid cuts for hospitals in particular. In states that chose not to expand Medicaid, for example, the Senate proposal would reinstate certain payments to smaller hospitals that Obamacare eliminated. Obamacare’s authors had argued the payments would be unnecessary if every state had expanded Medicaid, but a later Supreme Court decision made the decision optional.

Sen. Lamar Alexander (R-Tenn.), the Senate health chairman, pointed to that provision in particular as a benefit to his home state, which did not expand Medicaid.

Expansion states, on the other hand, wouldn’t receive the payments, just as they don’t under current law. That policy makes sense as long as Medicaid expansion remains intact and those states are getting extra funds. But under the Senate legislation, the payments would never be reinstated for those states, even after the extra funding for Medicaid expansion disappeared.

“It really makes no sense at all when you’re looking at big structural changes in 2020 and the phasing out of the Medicaid expansion funding,” Beth Feldpush, senior vice president of policy and advocacy at America’s Essential Hospitals, told STAT.

In another small win for at least some hospitals, the Senate proposal includes a new carveout for children who are blind or disabled. Medicaid funding for kids in those two categories would keep receiving just as much federal funding as they are now — and wouldn’t see their support cut over time like the rest of the program. It’s a help, according to Jim Kaufman, vice president of public policy of the Children’s Hospital Association.

“Overall it’s a bad bill for kids, but I do have to recognize the Senate at least tried to recognize the uniqueness of children’s health care by trying to do something for children that are disabled and blind,” he told STAT.

The Senate Budget Committee called the provision a “new protection for the most vulnerable.”

Still, Kaufman pointed out that the the massive cuts to the broader Medicaid program would disproportionately hit kids. The Medicaid program, along with the Children’s Health Insurance Program, provides insurance to 35 million children, representing almost half of the entire Medicaid program’s enrollees.

The House bill would have cut as much as $43 billion in funding for those kids over the next 10 years, and the Senate bill is “even worse,” Kaufman said.

Blau reported from Atlanta.