Medicaid is on the chopping block as Congress has returned to session after an April recess, and resumes moving forward on a budget reconciliation package.
The House Energy & Commerce Committee is meeting this week to work on its part of the package. The committee has jurisdiction over Medicaid, among other areas. It is widely considered the committee will find most savings through cutting back Medicaid.
The National Rural Health Association (NRHA) states that Medicaid plays a significant role in sustaining the viability of rural healthcare systems, including hospitals and clinics. Cuts would shift healthcare costs to families, facing higher out-of-pocket expenses, leading many to delay or forgo necessary treatments.
In Yuma County, 22.5 percent of residents utilize Medicaid, based on 2023 data from the Georgetown University McCourt School of Public Policy. That includes 36 percent of the children in the county, and 17.3 percent of seniors. It is 20.3 percent in Washington County, including 10.7 percent of seniors and 35.7 percent of children.
Eighteen percent of the Yuma District Hospital & Clinics’ annual revenue comes from Medicaid payments. If Medicaid is cut back, more people will not have coverage and will fall into the “single payor” category if needing service — the district’s 2024 audit report showed it receives approximately $1 in payment for every $10 of service provided to single payors.
The hospital district pays $600,000 each year in provider taxes to Medicaid, and gets back $3.8 million. The proposed provider tax cut could be as much as 50 percent. There are other Medicaid cuts also under consideration.
YDHC leadership has stated that if the cuts come to fruition, the district could utilize its reserves to help cover the reduced revenue, but the reserves would be drained over the course of some years. That would be in a worst-case scenario in regards to cuts.
One can let their elected representatives know their thoughts on potential Medicaid cuts by going to votervoice.net/mobile/NRHA and email on the link to Congress.
340B
The 340B Drug Pricing Program also is facing potential cuts. The program, part of the 1992 Public Health Service Act, requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patents.
Yuma District Hospital and Clinics provides savings cards to patients that they can take to Good Day Pharmacy to use for prescriptions. (A representative for Good Day recently testified to the Colorado State Legislature in favor of the program.)
According to the YDHC, the cards saved patients more than $460,000 in 2023 and 2024. The biggest savings are on some expensive blood thinners and inhalers that patients otherwise might not be able to afford and take as directed.
YDHC also utilizes the 340B program to buy influenza vaccines each year that are provided to the community at no cost.
However, according to reports both Colorado hospitals and pharmaceutical industry agree that the program is flawed as the number of healthcare centers receiving 340B has ballooned to nearly 3,000 by 2024, after there were just 45 when it began. Plus, the pharmaceutical industry claims large hospitals have figured out how to use to turn a profit.
The industry and the Colorado Hospital Association each have proposed legislation in the Colorado Legislature.
Senate Bill 071 would prohibit pharmaceutical companies from “denying, restricting, prohibiting against or otherwise limiting” the acquisition of 340B drugs by a covered pharmacy.
Hospitals must also post information on their website about their estimated financial benefits from 340B discounts and how they plan to use those savings.
The Colorado Hospital Association supports the bill, saying it will hamper Big Pharma’s continued efforts to weaken 340B.
PhRMA opposes the measure, arguing that 340B is a federal program and any adjustments to its statute should be made at the federal level.
Another bipartisan measure targeting 340B is Senate Bill 124.
The bill would require nonprofit hospitals to use their 340B profits to decrease out-of-pocket costs for low-income patients. It also requires covered hospitals to report information related to their 340B participation, such as how profits are being used, payments to third parties, and any use of contract pharmacies, to the CDPHE.
The Hospital Association has voiced opposition to the bill, saying it gives money to Big Pharma and imposes “incredibly burdensome” reporting requirements on health care providers.