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There’s some good news and plenty of bad news for Nebraska’s rural hospitals.
Just recently, state officials cheered the announcement that the federal government had approved the state’s application to join a program, already involving 44 other states, that would provide an additional $1 billion to the state’s hospitals and nursing facilities.
But, at the same time, there’s concern that President Trump’s “Big Beautiful Bill” will severely cut the federal funding for Medicaid, which is a major revenue source for hospitals.
Times were already tough enough for rural hospitals, which not only provide life-saving medical care but are major employers in rural communities.
More than half of the state’s rural, independent critical access hospitals were operating at a loss, according to the Nebraska Hospital Association. In recent years, more than one in five rural hospitals have cut back services due to financial struggles – services like delivering babies and treating mental illnesses. There are predictions that six rural hospitals will close if the proposed Medicaid cuts are approved.
Medicaid – health care for the disabled and low-income individuals that is jointly funded by the feds and the state (Medicare is health insurance for the elderly) – pays for 26% of all emergency room visits to rural hospitals and 44% of the bills for minor children, according to the Hospital Association. Almost half of all Medicaid recipients in Nebraska live in rural areas.
In short, it’s a big deal for hospitals in our rural communities.
And the bad news is that the proposed beautiful bill would make a sizable cut in federal subsidies for Medicaid.
How sizable? The bill advanced by the House of Representatives would cut $88 billion a year, or about 31% of what Nebraska spends per resident on Medicaid, according to the Kaiser Family Foundation, which tracks health care issues. That group says that there are 97,000 children on Medicaid in Nebraska, 44,000 adults and 13,000 seniors and those with disabilities. One in three children in our state under the age of 6 are covered by Medicaid.
The version of the bill being advanced by the U.S. Senate makes even deeper cuts, nearly $160 billion more over 10 years. So the total cuts would top $1 trillion over 10 years.
When federal reimbursements go down, the state could pick up the difference. But it’s estimated Nebraska would have to spend $1.3 billion over the next eight years to make up the difference. More than 100,000 Nebraskans could lose Medicaid coverage, according to the Nebraska Rural Health Association.
Nebraska, as we saw in the last legislative session, is scraping the cookie jars to fund state government, so state funding seems unlikely. And our U.S. Senators and Representatives seem to be fully on board with the big bill. Both the House and Senate bill have new work requirements to qualify for Medicaid. But that kind of ignores the fact most people on Medicaid are already working – nearly two-thirds of recipients ages 19-64 already work. And many of those not working cannot, due to caretaker responsibilities or disabilities.
A nurse from the Webster County Hospital in Red Cloud gave a sobering prediction at a recent news conference covered by the Lincoln Journal-Star.
The nurse said the small hospital is already operating at a loss and would likely close if the big bill includes the deep cuts in Medicaid.
And what if you had a heart attack in the home of Willa Cather? Instead of a five-minute ride to the hospital, it would mean a 40-minute ride north to Hastings.
Think about that.
Paul Hammel has covered state government for decades. Prior to his retirement, he was senior contributor with the Nebraska Examiner. He was previously with the Omaha World-Herald, and Lincoln Journal Star.
