Trump’s Spending Bill Threatens Medicaid, Hospitals In Washington

According to state health experts, the federal spending bill recently signed by President Donald Trump could strip hundreds of thousands of Washington residents of their health insurance and cost the state roughly $41 billion in Medicaid funding over the next decade. Governor Bob Ferguson says the full impact of the cuts could reverberate across the state and may force many hospitals to close.

Aaron Katz, principal emeritus of health systems and population health at the University of Washington, said that when uninsured individuals receive care, they lack financial backing, which results in higher costs for the rest of us as providers shift the burden to cover those expenses.

“Uninsured doesn’t mean free care; it means that when they get care, the cost is spread around everybody else who has insurance coverage, so we all pay for that. Also, the other thing is that people who don’t have insurance tend to delay going to seek care,” said Katz. “Most uninsured people are working, and whoever their employer is suffers because the person can’t get care to get better. So, when people are uninsured, the whole community suffers.”

Whether or not hospitals across the state remain open depends on several factors, including the percentage of their patients covered by Medicaid. According to Katz, hospitals serving lower-income and rural areas often rely more on Medicaid reimbursements, making them especially vulnerable to cuts.

“People in those communities won’t have care nearby, and they may have to travel for an hour or two. When a community loses a hospital, they usually also lose clinic-based healthcare providers, physicians, nurse practitioners, dentists, because the livelihood of those practitioners is related to the financial health of the hospitals,” Katz said. “So that’s going to be very painful for members of those communities.”

“Hospitals that have very slim margins, particularly rural hospitals, may close as a result because they may not be able to sustain their infrastructure and their staffing,” he continued.

Katz believes the federal spending bill will have a negative impact on our state, particularly by disrupting healthcare coverage and potentially bringing major changes to Medicaid.

Katz said that new Medicaid rules could reduce coverage by requiring recipients to verify eligibility every six months and to meet work or education requirements.

“The main effect is that in Medicaid, the law in a couple of years is going to require more frequent times when people in Medicaid have to come back to the state office and verify that they are still eligible every six months, and

it requires that people either work, look for work, or be in school,” he said. “So that is likely going to result in fewer people having health insurance coverage in the state.”

In addition, individuals who rely on Planned Parenthood for essential healthcare services may also be significantly impacted by the one-year ban on Medicaid funding for any clinic that provides abortion services. This restriction also effectively blocks reimbursements for a wide range of other services, including contraception, cancer screenings, and STI testing, even though these are unrelated to abortion.

“The law prohibits Medicaid payments to Planned Parenthood or other organizations that also provide abortion services, which could probably be bad for those providers and the people who rely on them,” Katz said. “But as I understand it, our governor has said that they will work to find some money to backfill that for the year.”

Overall, Katz said he believes the federal spending bill—dubbed the One Big Beautiful Bill Act and signed into law on July 4—will harm Washington more than it helps.

“To be honest, I don’t see much good in the bill because they are hurting a lot of people. They are saving a little bit of money, but the money that they are saving is overwhelmed with the tax breaks that they are extending and giving to people who don’t actually need the tax breaks,” said Katz. “So, no. I do not see much of anything good in the bill.”