FEDERAL FALLOUT | 'Job creators and economic anchors': Hospitals could see higher number of uninsured patients, receive less for providing services, health leaders say

Editor’s note: Federal Fallout is a Tribune-Democrat news series addressing the potential local impact of funding cuts.

JOHNSTOWN, Pa. – The sweeping federal budget reconciliation bill known as the One Big Beautiful Bill Act could lead to massive Medicaid cuts, increasing struggles for all hospital patients across Pennsylvania, hospital advocates say.

The plan could knock people out of Pennsylvania's affordable health insurance marketplace and change the state's ability to generate revenue to support Medicaid services, officials said.

“Hospitals would be hit with a double whammy under the House-passed bill,” said Patrick Keenan, director of policy and partnerships for the Pennsylvania Health Access Network.

The bill has passed the U.S. House of Representatives and is awaiting a vote by the Senate.

Federal Fallout logo

Both congressional chambers, where Republicans have majority control, could send the final bill to President Donald Trump’s desk to become law by the Fourth of July, The Associated Press has reported.

'Showing up in hospitals'

While the plan includes roughly $3.75 trillion in tax cuts and no taxes on tips, the revenue loss would be partially offset by nearly $1.3 trillion in reduced federal spending elsewhere – including Medicaid.

The bill would allow for the expiration of tax credits that hundreds of thousands of Pennsylvanians who obtain affordable health insurance coverage rely on.

The Pennsylvania Insurance Department and Pennie – Pennsylvania’s health insurance marketplace – sent a joint letter last week to members of the U.S Senate and House of Representatives urging them to vote "no" on the bill.

The letter said the bill would result in higher costs that could lead to more than 270,000 Pennsylvanians losing their health insurance. Individuals purchasing on the exchange could see average premium increases of 82% after 2025, according to Pennie.

According to Keenan, the amendments to Pennie could result in 600,000 Pennsylvanians losing coverage.

“Those people don't disappear; they become discontinued from primary care and are showing up in hospitals sicker than they would have if they had primary care,” Keenan said.

In addition, the bill would limit the state’s ability to assess taxes on health care institutions to supplement Medicaid services, he said.

Provider assessments

Pennsylvania uses provider “assessments” or taxes on institutions – including hospitals, nursing home facilities, intermediate care facilities, and managed care plans.

“These provider taxes are unusual because they are taxes that payers, including hospitals, they agree to these taxes,” Keenan said. "You don’t hear many people raise their hand and say, ‘I want to be taxed.' But the reality is Medicaid is a federal and state partnership, so when Pennsylvania ponies up money, the federal government brings in more money.”

Medicaid Matters forum

Panelists United Way of the Southern Alleghenies President and CEO Karen Struble Myers, certified community health worker Jason Rilogio, and Highlands Health Clinic Executive Director Rosalie Danchanko participate in Locals for Good’s Medicaid Matters forum at the University of Pittsburgh at Johnstown’s John P. Murtha Center for Public Service and National Competitiveness on Monday, April 21, 2025.

Keenan said the provider assessments help cover the cost of care hospitals are providing to Medicaid patients.

The federal budget reconciliation bill prohibits new or increased taxes, which sounds great, Keenan said.

“But the second thing that affects eight states, including Pennsylvania, is that if you have nonuniform taxes, meaning that you don’t tax everyone at the same rate, then those taxes are not permissible,” he said.

Pennsylvania has varying provider assessments generating $1.7 billion. There is an assessment for Philadelphia hospitals and another for hospitals in other parts of the state.

“By their definition, those things are 'nonuniform,' so when you say you can’t have a nonuniform tax, and at the very same moment you say, ‘You can't change, increase or add any new taxes,’ what does Pennsylvania do with that $1.7 billion? … It ties your hands,” he said.

That would lead to a $1.7 billion to $4.5 billion cut to Pennsylvania’s Medicaid budget over time, he said.

“That's not a budget hole Pennsylvania can fill,” he said.

Rural health impact?

Aside from taking money from schools, roads and bridges to fill the gap, the remaining option is for Pennsylvania to reduce payments made to Medicaid providers such as hospitals and nursing facilities that accept Medicaid, he said.

The “double whammy” of increased uncompensated care and decreased payment for Medicaid would place many hospitals in vulnerable financial positions, according to a report from the Pennsylvania Health Access Network.

The report listed UPMC Altoona and a few Pittsburgh UPMC locations as hospitals that could be especially vulnerable, subject to issues with access to care such as longer wait times, reduced appointments and availability and fewer staff, Keenan said.

UPMC is closely following the proposed Medicaid changes, spokesman Paul Wood said.

The proposed changes “could have a disproportionate impact on hospitals serving rural and other underserved communities,” he said in an emailed statement. “We remain committed to supporting access to essential care for all our patients across the communities we serve."

The Hospital and Healthsystem Association of Pennsylvania, a statewide membership services organization that represents 235 hospitals, including Conemaugh Health System, has urged Congress to reject cuts that would diminish the health and competitiveness of Pennsylvania’s rural communities.

“Medicaid is not just a lifeline for 3 million Pennsylvanians who rely on the program for coverage, but is also a critical funding source that hospitals depend on to care for everyone in our communities,” HAP President and CEO Nicole Stallings said in a statement.

On average, rural Pennsylvania hospitals are reimbursed 74 cents for every dollar they spend caring for patients covered by Medicaid, she said.

“Reducing payments even further or increasing uncompensated care will force more rural hospitals to reduce services or, in the worst cases, close,” she said. “We cannot have healthy, vibrant communities in rural Pennsylvania without strong hospitals. Rural hospitals are top job creators and economic anchors in their communities and health care deserts can quickly turn into economic deserts.”

'Keep our doors open'

Conemaugh Memorial Medical Center CEO and Health System Market President Rodney Reider said the Johnstown hospital is in continued, close contact with “key officials about the importance of maintaining Medicaid funding and protecting our community's access to care.”

“Medicaid ensures our community's most vulnerable, including children, pregnant women, seniors in nursing homes, and individuals with disabilities, have access to critical health care services,” he said.

“While it is true that Medicaid funding cuts would disproportionately affect patients and health care providers in rural communities like ours, it is premature to speculate or discuss any impact on our services.”

Rodney Reider

Rodney Reider, CEO of Conemaugh Memorial Medical Center, addresses a small crowd during the hospital's annual public meting at Crossroad Cafe in Johnstown, PA., Monday, Dec. 30, 2024.

He said Conemaugh Health System is “stable and fortunate to be part of a larger organization (Duke LifePoint) that provides significant resources and support, enabling us to continue growing and investing in our hospitals, services, and communities.”

Last week, the Highlands Health clinic, which provides free medical and pharmaceutical care to uninsured people across the greater Johnstown region, received a $32,000 grant from the local United Way of the Southern Alleghenies’ annual grant awards.

“I can't express enough that it is a struggle for the free clinic at this time, and any bit of funding we get from anywhere helps us keep our doors open,” Highlands Health Executive Director Rosalie Danchanko said.

Nearly 90% of the clinic’s patients receive Medicaid.

“The Medicaid cuts proposed are concerning to us,” she said. “We have not yet been able to assimilate what it’s going to mean directly to us, but I know we are very much concerned and are following the issue closely.”

If changes result in increased numbers of uninsured people going into hospital emergency rooms, Danchanko’s clinic would try to step in and help treat patients and guide them to insurance options, she said.

“The number of uninsured in the emergency room is quite overwhelming for the hospitals,” she said. “If that rises, that again jeopardizes their ability to keep their doors open. We are hoping to contract or partner with hospitals so that we can reduce the number of emergency room care for the uninsured.”

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