Medicaid cuts in the recent federal budget could have a large impact on northern Michigan healthcare providers and the 200,000 people in the area who receive Medicaid benefits.
Munson Healthcare operates eight hospitals in the northern Michigan area. About 60% of their payments come from Medicaid.
“We serve a geographically dispersed population,” said Gabe Schneider, director of government relations for Munson. He said compared to urban hospitals, “we have fewer patients coming through our doors, but we have a large percentage of Medicaid patients overall. So I think we’re in a unique position as the largest rural health care provider in the state.”
Rural health care facilities are especially vulnerable to Medicaid cuts because their operating costs are about the same as urban hospitals, but they see fewer patients.
The new law will reduce the number of Medicaid recipients by including a work requirement and requiring more frequent reporting, even though 92% of people on Medicaid are already working, according to the Kaiser Family Foundation.
“What this bill does is add additional bureaucratic processes onto Medicaid that will likely make it harder for people to maintain insurance coverage or obtain insurance coverage when they need it,” said Schneider.
Managing the work requirement may be difficult.
Currently, Georgia is the only state with a Medicaid work requirement. WABE in Atlanta reported in May that only 3% of eligible Georgians were enrolled in Medicaid, even though 64% of those eligible were working. Problems with technical glitches, administrative costs, and difficult to verify ‘gig’ work have meant fewer people are receiving healthcare.
Michigan Health & Hospital Association CEO Brian Peters says these cuts won’t just affect people who are on Medicaid, but everyone who needs access to healthcare.
“When a hospital has to reduce staff, or eliminate a service line, or has to close their doors entirely, those programs and services that were previously offered to all of us in the community are no longer available,” he said. "That is not an idle threat. That is exactly what will happen if these cuts are fully implemented in the years to come.
Republican congressman Jack Bergman could not be reached for comment, but he said in a statement, “House Republicans got the job done. We kept our word — cutting costs for families…[and] strengthening Medicaid. While no piece of legislation is perfect, this was a team effort with input from all of our constituents to deliver real results for the American people.”
The One Big Beautiful Bill Act does provide $50 billion dollars in bailout money for rural health facilities. The money will be spread out over 10 years, and it’ll be split between hospitals, health clinics, and other community health programs.
“We do know that because of the cost savings included with the bill, Congress is anticipating that some people will not be receiving insurance in the future, and that is concerning to us,” said Schneider.
The Medicaid cuts in the One Big Beautiful Bill Act will take effect December 31, 2026.
