Community Health & Wellness

State health care leaders criticize Republicans’ Medicaid plan

Posted on May 16th, 2025 By: Conor Wilson

Republicans in U.S. House have introduced legislation that will cut Medicaid and worsen access to Washington hospitals, leaders of the Washington State Hospital Association warned during a press conference Thursday.

Washington stands to lose an estimated $700 million a year in Medicaid funding from the proposal, WSHA CEO Cassie Sauer told reporters, creating financial uncertainty for services, clinics and entire hospitals.

“The talking point around this bill has been that it’s merely rooting out waste, fraud and abuse in the Medicaid program,” she said. “That is simply untrue. There are massive cuts contained in this bill.”

First look at specific language

Officials across the state have closely monitored Medicaid for months since House Republicans proposed that the House Energy and Commerce Committee make massive cuts to programs it oversees. Medicaid is among the programs in that committee’s purview.

But specific language had not been released until this week.

Republicans have said they want to move the bill to a House floor vote as soon as next week, before a Memorial Day recess. It hit a roadblock Friday, States Newsroom reported.

Medicaid, the state-federal insurance program for people with low incomes or disabilities, is a critical revenue source for all hospitals. Apple Health, Washington’s version of Medicaid, covers about 24% of people in the state’s Sixth Congressional District, which includes Gig Harbor, Kitsap County, the Olympic Peninsula and part of Tacoma, according to a snapshot report.

Reduction to the government insurance program could have disastrous effects for both its recipients and the state at-large, Sauer said. Freestanding clinics, labor and delivery, physical therapy, and mental health services are most at risk of being cut. There is also likely to be a general contraction of overall beds.

“If the hospital or the clinic or the long-term care setting are receiving cuts in payments from Medicaid, they have to figure out how to balance that,” she said. “You will lose services. That affects everyone in the community.”

Work requirements

House Republicans’ proposal, which is subject to change as it makes its way through the House and Senate via the budget reconciliation process, includes multiple provisions that Sauer says could harm Washingtonians.

One of them is the implementation of work requirements, mandating those who receive benefits are employed. The vast majority of Medicaid recipients are working. In practice, employment requirements have been found ineffective, and frequently kick people off insurance for a failure to report.

“States that have done work requirements have found that people don’t lose coverage because they’re not eligible [or] they’re not working,” Sauer said. “They lose coverage because they can’t make it through the bureaucracy and the frequency of verification.”

Washington would also be penalized under the federal legislation for providing insurance to low-income immigrants. Sauer said the state would be subject to a 10% reduction in federal Medicaid revenue, even though the program uses no federal dollars.

The Republican bill comes as impacts are already being seen in Washington. On May 12, Valley Medical Center, a hospital in Renton, announced it was closing five clinics. A spokesperson said the hospital was concerned about delayed federal Medicaid payments and recent state budget cuts, according to the Seattle Times.

Federal Medicaid cuts would be most devastating at rural hospitals in Eastern Washington, where Medicaid enrollment is higher. Yet residents on the Kitsap Peninsula could see impacts as well.

14% of revenue

St. Michael Medical Center in Silverdale and St. Anthony Hospital in Gig Harbor have fewer Medicaid patients, but they still rely on the program. In 2022, they each got about 14% of their revenue from Medicaid, according to state data.

Cuts to Medicaid would add to the financial pressure already facing the pair of hospitals, and their parent company Virginia Mason Franciscan Health. The 10-hospital system has continued to operate at a deficit since the pandemic, St. Michael President Chad Melton previously said.

Jacqueline Barton True, vice president of advocacy and rural health for the hospital association, said they are concerned about how closures in rural areas could impact urban hospitals. The state had the least number of hospital beds per capita of any state in the nation, she said.

“If you take any of those beds out of the system, you’re squeezing it for the entire state,” she said. “We have a lot of concerns about what this will do to capacity and interconnectedness of our rural and urban hospitals.”