Medicare program cuts could have 'devastating' impacts

PORT ANGELES — When 101 employees at Valley Medical Center in Renton lost their jobs in March after direct Medicaid payments to the hospital ended Dec. 31, Clallam and Jefferson county health leaders were more than a little concerned.

It was a possible sign of more things to come if a budget plan advanced by House Republicans in February to make $880 billion in cuts to Medicaid over the next 10 years becomes a reality.

Although the latest White House budget for 2026 includes significant cuts to the Centers for Medicare & Medicaid Services, those cuts would have "no impact on providing benefits to Medicare and Medicaid beneficiaries," according to the document.

Local health leaders are watching and hoping that's true — that the safety net providing support to individuals and families on the North Olympic Peninsula, as well as the hospitals and clinics that serve them, is preserved.

Medicaid is the country's largest health insurer, covering 72 million Americans, including children, the working poor, those with disabilities, low-income families and the elderly. The program is administered jointly by the federal government and states, who share costs.

In 2023, for example, the federal government paid 69 percent ($606 billion) and the states 31 percent ($274 billion) — a total that pencils out to about $880 billion.

According to KFF, a non-partisan health policy research organization, Washington state would lose an estimated $3 billion in Medicaid funding over 10 years if the proposed cuts are approved. To maintain the program at its current level, the state would have to raise taxes to offset the cuts or slash other budget items.

The proposed cuts could result in the loss of 16,600 jobs in Washington state, with 9,500 coming in health care and 7,100 in other sectors, according to a March 2025 Commonwealth Fund Report. Cuts would mean $346 million in lost federal dollars and $128 million in lost tax revenues to the state.

In Washington state, roughly 1 in 4 residents — about 1.7 million people — are enrolled in Apple Health, the state's Medicaid program. According to the Georgetown University McCourt School of Public Policy, 21.5 percent of Clallam County residents and 18.8 percent of Jefferson County residents are enrolled in the program.

Slashing Medicaid funding is an ill-conceived strategy for saving money, local health leaders say, because people will still get sick, need surgery, suffer from chronic conditions and have babies.

"It's a policy that literally puts patients' lives on the line, because they will just delay care and then arrive at the emergency department, which is the most expensive place to present," said Mike Glenn, CEO of Jefferson Healthcare. "In the best case, they'll be treated as a primary care patient. In the worst case, something will be detected that had it been detected months before could have led to a much better outcome."

Cuts to the program would shift more costs to the states and ultimately to communities, leaders say. Hospitals that are already struggling to deliver care would serve more patients who cannot pay, resulting in more charity and uncompensated care written off as bad debt. Last year, for example, Jefferson Healthcare absorbed $2 million in charity care.

Picking up some of those costs through higher premiums and deductibles will be those with employer-sponsored and private insurance, as hospitals pass on their higher costs to consumers.

The overall result of a cut like that which has been proposed would be reductions in providers, staff and the kind of care that patients are accustomed to receiving, health leaders said.

Rural hospitals that already have a high proportion of patients on government plans like Medicaid and Medicare that don't fully reimburse them for the cost of care are particularly vulnerable to the impact of any cost-cutting.

"It's likely we would have to cut services," said Heidi Anderson, chief executive officer of Forks Community Hospital, where 37 percent to 39 percent of patients are on Medicaid.

And, if you think emergency departments are full now, just wait until any cuts start, Olympic Medical Center CEO Darryl Wolfe said.

"If you cut Medicaid, you're cutting reimbursements to the system," he said. "If it's less money for the system, the system will have to make cuts that will impact all people, whether they have Medicaid or not."

Medicaid expansion, which took effect in Washington in 2014, greatly increased the number of people who had access health care by lowering the threshold for qualifying. It will take a particularly big hit if cuts occur.

Should that happen, Mike Maxwell, M.D., CEO of North Olympic Healthcare Network, estimated that about 60 percent of its 18,223 patients who are on Medicaid or become insured through Medicaid expansion will become uninsured.

"The expansion of Medicaid eligibility allowed so many more people to be able to get health insurance that previously weren't able to get it," Maxwell said. "It's that expansion of eligibility that the administration is targeting."

The Jamestown S'Klallam Tribe's many services that accept Medicaid and are delivered across the county through its Family Health Clinic, Dental Clinic, Healing Clinic and Mobile Healing Clinic set it apart from other Native American health services.

Ron Allen, chairman of the Jamestown S'Klallam Tribe, said 90 percent of the patients served by its health programs are not tribal members. Access to those services could be come more limited if Medicaid is cut.

One of the biggest misconceptions about Medicaid is that it's for poor people, Glenn said.

It's available to working people who don't have access to employer-paid health insurance, parents who have children with special needs and children whose aging parents need care long-term care.

"Medicaid is a middle-class benefit now, because it is the health insurance that so many rely on," he said.

The majority of Medicaid recipients are children — about 47 percent of children in Washington are covered by the program, or two in five. About 33 percent of births in the state are covered by Medicaid as well.

Three in five nursing home residents and three in eight adults with disabilities receive benefits as well.

In addition to supporting individuals and families, Medicaid dollars contribute to the economic health of communities, the health leaders said.

Jefferson Healthcare and OMC are the largest employers in Jefferson and Clallam counties. With 970 employees, Forks Community Hospital is the largest employer in that city.

Anderson said cuts to Medicaid could have a devastating ripple effect across the West End.

"I'm scared for our community, I'm scared for our patients," she said. "If you lose a hospital, you lose a community."

Adults and children living in rural Clallam and Jefferson counties already face a number of challenges accessing health care, health leaders said. Incomes are lower, there are provider shortages and there are long distances to reach hospitals.

Without Medicaid funding, those hardships could increase, the health leaders said.

"If those cuts go through, I don't think people understand how devastating that it's going to be," Maxwell said. "It sounds good when you say you want to slash federal spending, but when it comes down to real life, it has impacts. If this happens, our community is going to feel it in a big way."

Apple Health

In Washington state, Medicaid is known as Apple Health. If you receive benefits through Apple Health or subsidized insurance through Washington Healthplanfinder, you are on Medicaid.

Apple Health/Medicaid covers:

• Children: 849,158

• Adults: 623,156

• People with disabilities: 131,195

• People age 65+: 99,897

• Pregnant/after-pregnancy care individuals: 26,588

Source: Washington State Health Care Authority

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Reporter Paula Hunt can be reached by email at [email protected].