TL/DR –
The One Big Beautiful Bill Act cuts funding to Medicaid, health insurance marketplaces, Medicare, and similar programs by approximately $1.1 trillion over ten years. Critics argue that these cuts will negatively affect rural healthcare due to decreased spending in these areas, as well as restrictions on Medicare eligibility. However, the Act also introduces the $50 billion Rural Health Transformation Fund to assist rural states in modernizing and maintaining healthcare access, although there are concerns about the administrative complexity and timing of the grant opportunities.
Rural Healthcare Faces Uncertainty as Bill Slashes Funding
North Mississippi Health Services CEO, Shane Spees, is uncertain about the impacts of the One Big Beautiful Bill Act on rural healthcare. The Act, which was signed into law last July, is set to cut funding for Medicaid, health insurance marketplaces, Medicare, and other health-related programs by an estimated $1.1 trillion over the next decade.
Spees, whose organization provides health services to 24 counties in North Mississippi, northwest Alabama, and parts of Tennessee, expresses that “only time will tell” how these cuts will affect rural healthcare.
According to the National Rural Health Association, these cuts could result in $155 billion less spending in rural areas over the next ten years, which is causing concern for hospitals throughout the country.
The Role of Medicaid in Mississippi
In Mississippi, Medicaid has been a crucial source of revenue for health care providers, accounting for 13.6% of total net patient revenue for the state’s general, short-term hospitals, as per the Center for Mississippi Health Policy. As of last February, the state had around 635,000 Medicaid enrollees, more than half of which were children.
However, the One Big Beautiful Bill Act is expected to disrupt this, as it imposes a nine-year ban on improvements to the Medicare Savings Program (MSP), which aids low-income Medicare beneficiaries in covering premiums and out-of-pocket costs. This could impact individuals who rely on MSPs for medical supplies, hospital stays, prescription drugs, and nursing facility care.
Consequences of Medicare Eligibility Restrictions
The new bill also brings significant changes to Medicare eligibility, limiting it to U.S. citizens, green card holders and legal immigrants from some specific locations. This means that many immigrants, including refugees, people granted asylum, people with temporary protected status, and even permanent residents, will lose coverage.
Financial Challenges for Mississippi Hospitals
Despite these issues, Mississippi hospitals will be shielded from significant funding cuts until the federal fiscal year 2029 due to a federal freeze on the average commercial rate used in the Mississippi Hospital Access Program (MHAP). However, from October 1, 2028, the MHAP supplemental payment rate is set to be reduced by 10% each year until it reaches 110% of the Medicare rate, costing hospitals in the state up to $160 million annually.
Spees sees the ending of the enhanced subsidies provided by the Affordable Care Act (ACA) as a more pressing issue. These subsidies, which were enhanced by the Biden-era American Rescue Plan and the Inflation Reduction Act, made coverage affordable for more people, including low-income individuals, young adults, those with pre-existing conditions, self-employed and part-time workers. However, the cessation of these subsidies has led to premium costs doubling for many.
The Future of Healthcare in Mississippi
With the erosion of ACA subsidies and the implementation of the One Big Beautiful Bill Act, it is predicted that there will be an increase in the number of uninsured individuals. This is substantiated by a 3.5% drop in ACA enrollment according to recent federal data.
Spees expresses the necessity for continued focus on individual healthcare coverage, stating that this is a more urgent need than some of the changes and programs that are part of the One Big Beautiful Bill Act. He also highlights the importance of the Rural Health Transformation Fund, which is included in the Act and seen as a positive step towards modernizing and sustaining access to healthcare in rural states.
However, the future remains uncertain, with healthcare systems like NMHS bracing for an anticipated rise in uncompensated care and facing the challenge of becoming more efficient and productive to counterbalance the reduction in reimbursement rates.
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