FILE - A sign points visitors toward the financial services department at a hospital, Friday, Jan. 24, 2014. More than a half million of the poorest Americans would be left without health insurance under legislation passed by House Republicans that would require people to work in exchange for health care coverage through Medicaid. The bill is unlikely to become law, though, with Democrats strongly opposing the idea.
David Goldman / AP Photo
David Goldman / AP Photo
FILE - A sign points visitors toward the financial services department at a hospital, Friday, Jan. 24, 2014. More than a half million of the poorest Americans would be left without health insurance under legislation passed by House Republicans that would require people to work in exchange for health care coverage through Medicaid. The bill is unlikely to become law, though, with Democrats strongly opposing the idea.
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As Congress considers what could be the most significant Medicaid cuts in U.S. history, experts are sounding the alarm about the far-reaching consequences—especially for small businesses and rural communities.
“This is unprecedented,” said Joan Alker, Executive Director of the Center for Children and Families and a Research Professor at Georgetown University’s McCourt School of Public Policy. “I’ve been working on Medicaid policy for about 25 years. I’ve never seen anything like this.”
According to a new report from Alker’s team, one-third of all people enrolled in Medicaid are connected to small businesses—a group that includes business owners, employees, and their families. That’s an estimated 11 million children who rely on Medicaid because their parents are self-employed or work for small businesses.
“Because small businesses face higher costs in the private insurance market, it’s really hard for them to find affordable coverage options,” Alker explained. “Medicaid is playing a vital, vital role in supporting small businesses.”
The proposed cuts could be especially devastating for rural areas, where hospitals already operate on thin margins.
“The majority of rural hospitals today don’t have labor and delivery capacity,” Alker said. “It’s really impossible, frankly, for a rural community to survive if there is not a safe place for moms to go to have babies.”
Alker also highlighted the child care industry, where approximately 27% of the workforce in Pennsylvania is covered by Medicaid. Many child care centers are small businesses that can’t afford private insurance.
“Medicaid is working by supporting both the workforce at the child care centers, who in turn support parents so that they can go to work,” she said. “It’s really a work support.”
If the cuts are approved, small businesses could struggle to remain competitive with larger corporations that can better absorb rising health care costs.
“Pennsylvania will be left with some really terrible choices,” Alker warned. “We’re talking about potentially cutting Medicaid, education, or raising taxes.”
With few affordable alternatives, Alker believes the bill would take the country “in exactly the opposite direction” of where it should be heading on health care policy. “This could force more people out of self-employment and small business ownership—just as the Affordable Care Act had started to create new opportunities.”
