As Senate Republicans work out the size of a rural hospital stabilization fund for their reconciliation bill, Democrats are confident that, regardless of the number Republicans come up with, the fund won’t be enough to mitigate the problems caused by the bill’s cuts to Medicaid — and that the entire idea is proof Republicans know their reconciliation bill will harm hospitals.
“The rural hospital fund is a fig leaf that will let them pretend that they can take away hundreds of billions of dollars in health care reimbursements,” Sen. Elizabeth Warren told NOTUS on Wednesday.
She was confident that “one little slush fund” would not be enough to keep every rural hospital open.
That was a consistent message from Democrats on Wednesday.
“The fact that they’re doing the fund means they are acknowledging that their bill really hurts rural hospitals,” Sen. Tim Kaine told NOTUS. “The fund that the administration would administer is not going to be sufficient for any of us.”
“The devastation to health care in the United States will be red and blue,” Sen. Richard Blumenthal said. “Red, white and blue, across the country, and I think they’re hearing from constituents.”
Sen. Ron Wyden told NOTUS that even his constituents who voted for Donald Trump in rural Oregon were “apoplectic” about the potential Medicaid cuts.
“I’m stunned by this idea that Republicans, with respect to rural hospitals, now want to create a disaster fund,” Wyden said. “The obvious question is, don’t create the problem in the first place. Don’t create the need for things like disaster funds.”
And Sen. Cory Booker said Congress “shouldn’t be picking and choosing between Americans.”
The stabilization fund is intended to soften the blow of the reconciliation bill’s Medicaid cuts for rural hospitals who rely on the program to operate. But notably, there is no such stabilization fund for more urban hospitals, which are more often in Democratic states and districts.
Republicans have suggested a wide range of numbers for a rural hospital stabilization fund — from $15 billion, as was written in a Senate Finance Committee memo circulated Wednesday morning, to $100 billion, as suggested by Sen. Susan Collins.
Sen. Josh Hawley, who has been one of the Senate’s loudest voices against Medicaid benefit cuts, is pushing for some kind of rural hospital support fund. Because of its potential impact on rural hospitals, his last major hang-up with the bill is the Medicaid provider tax decrease, a significant source of state funding for Medicaid. The bill would gradually lower the 6% tax on health care providers to 3.5%.
“Our goal here needs to be to protect rural hospitals and make sure that they keep their doors open,” Hawley told reporters Tuesday. “I hear now that we’re considering the rural hospital fund. That’s good. We should, for sure, do that.”
On the other hand, Sen. Roger Marshall said he supported the stabilization fund because he didn’t think Medicaid was that great in the first place.
Marshall said “Medicaid is not the solution” for rural hospitals because doctors don’t always accept it, and suggested he could live with a fund that provided $5 billion per year over the next four years.
“One of my three tenets of MAHA is making sure everybody has affordable, accessible health care. And right now, Medicaid doesn’t do that,” Marshall said.
Meanwhile, Democrats don’t think any number Republicans come up with will be sufficient.
As Sen. Bernie Sanders told NOTUS on Wednesday, “Cuts in Medicaid will be devastating for rural America.”
He said a separate fund for rural hospitals would be “something, but nowhere near enough.”
The provisions in the Medicaid portion of the Senate Finance Committee’s original draft would deepen the House bill’s Medicaid cuts, which the Congressional Budget Office estimated would already reduce the program by roughly $700 billion over the next decade.
The Senate proposal differs from the House’s by reducing the Medicaid provider tax. In most states, that would mean a gap of billions of dollars that the state would have to fill — or find a way to reduce the number of Medicaid recipients in the state.
Republicans in both chambers have expressed opposition to the Senate’s provider tax changes, creating a hurdle that Republican leaders are scrambling to overcome as they try to pass the reconciliation bill in the coming days. Several senators reportedly said Wednesday that they won’t vote to bring the bill to a vote without “further clarity” on the rural hospital funding piece.
To address concerns of cutting the Medicaid provider tax, some senators think the answer could be that rural hospital fund. If added to the bill, it would cushion the impact of Medicaid cuts on rural hospitals, which often rely more heavily on state dollars as a proportion of their tight budgets.
“I think the intent in Congress is to build a bridge for rural hospitals,” Dave Dillon, vice president of media relations at the Missouri Hospital Association, told NOTUS. “But the problem is, a bridge to where?”
Dillon said that any amount of a stabilization fund would be only a temporary float for some rural providers, since the provider tax decrease would affect the already-slim operating margins of all hospitals for many years to come.
Urban and suburban hospitals still serve lots of Medicaid patients, he noted, even if their budgets are better supported by a wider mix of payers.
“So the focus on rural is perhaps because of the potential more vulnerability,” Dillon said. “But it is not to say that their friends in urban and suburban areas don’t have a stake. They absolutely do, and the losses in real dollars could actually be a lot more.”
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Helen Huiskes and Margaret Manto are NOTUS reporters and Allbritton Journalism Institute fellows.