Philly health providers fear ‘a perfect storm’ as Medicaid cuts are proposed in the federal budget

Democratic state lawmakers and health providers from around the Philadelphia region are warning that billions of dollars in Republican-proposed Medicaid cuts will devastate their constituents, especially Black patients who disproportionately rely on the government-funded health coverage.

State Sen. Vincent Hughes (D., Philadelphia) convened a forum Wednesday with politicians, pediatricians, mental healthcare providers, and health equity experts at Cedarbrook’s Enon Tabernacle Baptist Church to discuss the impact on the state’s Black residents of cuts to a safety-net program for low-income people and those with disabilities.

Analyzing the proposed budget, the Congressional Budget Office has estimated that its $900 billion in cuts to federal spending, mostly to Medicaid, would result in 7.6 million Americans losing healthcare coverage within 10 years.

The cuts would help cover the cost of extending tax breaks President Donald Trump instituted in his first term.

Black Pennsylvanians are already less likely to access timely healthcare, have a higher risk of chronic conditions like diabetes and heart disease, and are less likely to be insured than their white counterparts.

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They are also more likely to get care through Medicaid. About a third of Black Pennsylvanians under 65 were insured through Medicaid in 2023, while about 13% of white residents receive coverage through the program.

Cuts to Medicaid, attendees at Wednesday’s panel warned, could exacerbate health disparities and jeopardize Philadelphia-area hospitals and health providers who serve large amounts of Medicaid patients.

“We‘re facing a perfect storm,” said Donna Bailey, the CEO of Community Behavioral Health, the city-contracted nonprofit that coordinates Medicaid coverage for behavioral health services in Philadelphia.

Health providers were concerned about how the budget bill aims to lower Medicaid enrollment.

One provision, which would go into effect in 2029, would require able-bodied people without dependents to certify that they spent 80 hours a month on work, education, or service. Another would require people to certify that they were still eligible for Medicaid twice a year, instead of once a year.

“It is striking to me that the savings that they’re seeing — billions of dollars here, billions of dollars there — are all because they’re creating barriers to enroll in Medicaid, not because they’re addressing some inefficiency or adding true value or true improvement to the system,” said Devon Trolley, the executive director of Pennie, the state healthcare marketplace.

Critics of the proposal say that most people on Medicaid already work and that requiring them to report their employment is an onerous process with significant overhead costs for states. For example, in Arkansas, one of the few states that instituted a work requirement for Medicaid under the previous Trump administration, research from KFF suggested that the requirements limited access to care even for people who were eligible for Medicaid.

Cheryl Bettigole, Philadelphia’s former health commissioner and a University of Pennsylvania professor, told Wednesday’spanel that, in her time working at city-funded health centers, she regularly met people on Medicaid working two and three jobs.

Those people don’t need to be forced into the job market, she said, but rather need better access to healthcare so they can continue working.

Medicaid enrollment has been dropping since Pennsylvania resumed annual eligibility checks that were suspended during the COVID-19 pandemic.

Statewide, enrollment has declined by more than 700,000 people — including more than 100,000 in Philadelphia alone. Some were no longer eligible, after finding new employment, but many remain eligible but lost coverage because they failed to properly complete the paperwork.

According to state data, nearly 3 million Pennsylvanians, or 23% of state residents, are enrolled in Medicaid. In Philadelphia, 42% of residents are insured through Medicaid. At some area hospitals, more than two-thirds of patients are on Medicaid.

Bailey said she’s concerned that health providers who serve mostly people on Medicaid will be unable to stay open if enrollment drops and they lose patients.

“People will get sick, and they’ll show up in emergency departments or crisis response centers, and there’ll be higher costs of uncompensated care,” she said. “People will also not get the preventive care that they might otherwise get if they were on medical assistance.”

Health providers who care for people with Medicaid coverage are concerned about how their work could be limited.

“It‘s overwhelming, not just for clients, but for clinicians,” said Farida Boyer, the executive director of the Black Brain Campaign, which aims to combat stigma against seeking mental healthcare in the Black community.

“We‘re trying to meet needs, but it‘s becoming a lot. What happens if we don’t get these dollars? That‘s what we rely on.”

State lawmakers predicted Pennsylvania and other states will find it impossible to make up for the cuts to federal contributions to Medicaid without raising taxes. In Pennsylvania, the federal government paid for about 64% of the state’s Medicaid costs in 2022, while the state covered the rest, according to data from KFF.

The dramatic cuts proposed in the budget could force states to make “very tough decisions” about what care they cover, who is eligible for the program, and how many people can enroll in Medicaid, said Priscilla Mpasi, a pediatrician at ChristianaCare and a board member of the National Medical Association, a Black doctors’ advocacy group.

“States will have to make decisions that I hope we never have to face about who may be more important, or what health aspect is more important,” she said.

At Wednesday’s forum, attendees said they plan to fight the proposed cuts, while also preparing for what could happen if they pass.

The proposal advanced this week in Congress also faces opposition from Democrats and is raising concern for at least several Republicans, making its future uncertain.

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Ala Stanford, the founder of the Philadelphia-focused Black Doctors Consortium, advised doctors to ensure their patients have adequate supplies of medicine and schedule routine disease screenings even as they advocate against the proposed budget.

“That‘s what‘s going to cost a lot, or what patients are going to have to wait a long time for [if these cuts go through],” she said.

In Harrisburg, Hughes pledged to fight the budget cuts, and encouraged physicians and health providers to contact federal lawmakers and government officials.

“The messaging to community members should be to access the care you can now,” Mpasi said. “But the fight is not over.”

The Associated Press contributed to this report.

Editor’s note: This story has been updated with the correct day of the roundtable.