President Donald Trump signed the so-called "Big Beautiful Bill" on July 4. It includes many of his policy priorities, including more money for immigration enforcement and making permanent tax cuts approved during his first term.
The bill also has several provisions dealing with health care — Medicaid work requirements have gotten the most attention, but as NPR reports, there could also be implications for rural hospitals and Americans with health care plans through the Affordable Care Act.
Meaghan Kramer, health policy advisor to Governor Katie Hobbs, joined The Show to discuss how will this new law could impact Arizona and the state’s Medicaid program, known as AHCCCS.
Full conversation
MARK BRODIE: Meaghan, good morning.
MEAGHAN KRAMER: Good morning.
BRODIE: So what is the biggest, I guess, potential implication to Arizona from this new law?
KRAMER: Well, there's a few things. The first is really Arizona's health care system, like all health care systems, is this very complicated ecosystem, and it's made up of programs that are funded by the federal government, the state government. We have, Medicare, Medicaid, the ACA, which is the Affordable Care Act marketplace, and then folks who are on employer employer sponsored health insurance, and the changes in this bill will really disrupt many portions of that in a few ways.
The first is there, there will be, the provider tax is something that I think most folks coming into this bill season didn't really know much about, but it's a complex financing mechanism that for more than 40 years has helped fund rural hospitals in Arizona, and, you know, some of the urban hospitals receive significant payments through this mechanism as well.
I think one of the main things to understand is the the provider tax is just a way to help supplement the payments that come into these hospitals because so many Medicaid people are being served and the payments that they're billing for Medicaid services are not enough to make up for the costs that it costs these hospitals to provide Medicaid services.
So the bill reduces over several years, this financing mechanism. And as a result, many hospitals are going to suffer in Arizona and primarily the rural hospitals.
BRODIE: I mentioned work requirements for Medicaid. Arizona, of course, has a law on the books that requires the state to ask the federal government for permission to implement something like that. There's been a lot of talk about people potentially falling off the Medicaid rolls because they don't meet the requirements or due to sort of paperwork issues. Are you anticipating that there will be fewer people on Medicaid at some point in the not too distant future?
KRAMER: The work requirements, as they will apply to the expansion population, there's a number of things in this bill that are going to cause people to fall off the rolls. And Arizona for a long time, has had a requirement to ask for permission from CMS to implement a work requirement. We did do that this year, but we wanted to do it in a way that made sense for Arizona that provided lots of exceptions and that made sure that people who were too sick to work did not have to work.
The federal requirement that was passed in this bill is very rigid. And as a result, that plus frequent redetermination requirements, making sure that people are still eligible. Mainly it's just paperwork. That's the reason people are going to fall off the rolls. There are 500,000 people right now who are Medicaid expansion folks in Arizona. And we're estimating that as many as 220,000 of them could, yeah, could lose their health insurance.
I do want to emphasize, it's going to be a little while before these get implemented. And so there's been a lot of talk of deep cuts to Medicaid. We want to make sure that if you receive documentation from AHCCCS, or from Medicare or whoever to fill out your paperwork, with respect to redetermination, keep filling that out the cuts have not taken place yet, and we want to make sure that people stay on the rolls as long as they can.
BRODIE: So if 220 some odd thousand Medicaid recipients lose that coverage, presumably some, if not most of them will be uninsured. What does that mean for hospitals and other providers in the state who will be, especially the hospitals who are required to treat patients, whether or not they get paid for it?
KRAMER: Yeah, that's the thing is no matter how much we cut, the same number of people are going to get sick and they're going to have chronic illness and disabilities that will require very expensive care. So the, the numbers of uncompensated cases that each of these hospitals are going to have to take care of will just continue to go up. Hospitals are required to treat whoever comes in their emergency room doors. And these cuts will just increase that burden.
That care is also another big reason why we passed the Affordable Care Act is uncompensated care causes people to seek emergency care, which is much more expensive. And the preventative care that people would get through Medicaid, through the Affordable Care Act, that stuff's going to be gone, and they're going to be seeking the most expensive care imaginable, which is going to put a huge burden on hospitals, and we just anticipate that that compounding with the the provider tax, which could cause a significant number of hospitals to close their doors, it could be a real nightmare for for services in Arizona.
BRODIE: Would you imagine that the biggest hit will be to hospitals in rural parts of Arizona?
KRAMER: Yes, absolutely. We had earlier this year the provider tax financing mechanism that we spoke about earlier. Those payments had been delayed from CMS, and just because the payments had been delayed, we had a significant number of hospitals in Arizona who were desperate, who were drawing up plans if they didn't make payroll, who were, you know, contemplating closing labor and delivery units, and those were just a couple of missed payments from CMS. And so we do anticipate that this could be very devastating to our rural communities in particular.
