There has been much wailing and doom-saying over the changes to Medicaid in the One Big Beautiful Bill Act (OBBBA). This article is a typical one. Among the claims are the bill is racist, that it guts services in rural counties, that rural OB units are closing in droves, and that the South has a maternal mortality rate similar to third world nations. It claims women’s services are being destroyed by defunding Planned Parenthood. What are the facts regarding these histrionic assertions?
I practiced Ob/Gyn for 37 years, 29 of them in the South. I have served in large private hospitals, major academic centers as full-time faculty, and smaller hospitals as well. Every claim about the impact of the Medicaid changes is false or exaggerated. The claims about women’s services are uninformed.
Labor and Delivery units have low profit margins. In one private hospital where I served numerous administrative and executive roles, the profit margin on a delivery was six dollars. The general rule of thumb is a delivery unit is not profitable until it reaches 1,000 deliveries. While there is little formal analysis of this, both hospital executives and unit administrators support this with institution-specific data. Rural hospitals are closing their labor units not because of Medicaid cuts but because they are financially unsustainable.
Besides finances, however, small labor and delivery units are appreciably more dangerous. Maternal mortality and severe maternal morbidity (major complications from delivery) are much more frequent in rural hospitals. The United States’ maternal mortality rate is not good, and often cited as a failure of the U.S. medical care system. Our rate, 21 per 100,000 deliveries, is worse than any other Western nation and equal to the West Bank and Gaza Strip. By contrast, Norway’s rate is 1 per 100,000. One may justly call the U.S. rate ‘third world’; however, this evokes visual images of Africa, which is a false equivalent. Chad has a rate of 1,063 per 100,000, Nigeria 1,047 per 100,000. We’re bad, but not like that.
Financial constraints apply to Ob/Gyns in rural communities as well. Most counties in the U.S. have no full-time Ob/Gyn practice. This isn’t racism, it’s economics. I once presented a paper on provision of complex Gyn-care to a rural county with a population of 15,000. It generated only four Gyn procedures, which increased to 19 once access was established (Tsaltas, ACOG, 2015). But that isn’t nearly enough work to sustain a full-time practice. A faculty member went there one day weekly, which is all that case volume can sustain. Doctors practice in big cities and towns not out of racism but because that is where there are enough patients to pay the bills.
The OBBBA “prohibits Medicaid funds from going to Planned Parenthood and other nonprofit providers that primarily offer family planning or reproductive health services, provide abortions beyond the Hyde Amendment exceptions, and received over $800,000 in Medicaid reimbursements in a single year.” And, the funding cut is only for one year. This is being reported as destroying access to women’s care for low-income women. Except that’s not true. There is an extensive network of Federally Qualified Healthcare Centers (FQHCs) that provide comprehensive women’s care, including not just contraception or paps but also complete range-of-life services and full operative and prenatal care. They also care for men, and provide dental and psychiatric services. I know: I staffed one of these as a faculty member. And there are 1,400 FQHCs in the US. In contrast, Planned Parenthood has 600 centers. And if you imagine that rural healthcare is being compromised by “defunding” Planned Parenthood, you had best have another think. In Tennessee there are 30 FQHCs, many in rural areas. Planned Parenthood has…four centers, one in Knoxville, one in Nashville, and two in Memphis. In California there are 115 Planned Parenthood and affiliate clinics, whereas there are…217 FQHCs. Northern California, the poorest part of the state, has only four Planned Parenthood locations.
According to the Congressional Research Service, Planned Parenthood in 2016 had clinics in 8.7% of U.S. counties. FQHCs were present in 61.6%. Only 11% of counties had both. 1% of counties had a Planned Parenthood facility but no FQHC, but 48% of counties had an FQHC but no Planned Parenthood clinic. 37% of counties had neither. Planned Parenthood is not the answer for coverage or even close to the main source of indigent women’s care; FQHCs are. The complete CRS report is here.
There is an interesting philosophical contradiction here. Those who most strongly support national level healthcare are the ones most strongly supporting the use of a private alternative to FQHCs. Except for abortion services, there is no need for Planned Parenthood at all. FQHCs are more comprehensive and cost little or nothing for those with no insurance.
A further contention is that Medicaid users will lose their coverage even as the federal deficit rises. The federal government pays 69% of Medicaid’s costs; states pay 31%, primarily through taxes levied on providers of service. These are made mainly against hospitals, nursing facilities, and care facilities for the intellectually disabled and mentally ill.
The OBBBA limits how much states can tax providers, reducing state funds for Medicaid and thus reducing federal spending on Medicaid as well. The bill imposes a work requirement; to receive Medicaid you must be either working, show evidence of looking for work, or that you cannot work. It also introduces a limit on immigrants’ eligibility for Medicaid; an immigrant must be in the U.S. lawfully for five years before being eligible. Overall, however, around 11 million people will lose Medicaid coverage.
Context for these changes, however, has been omitted by the media. That 11 million is over 10 years, or about 1 million per year. Nearly 8 million of these are expected to be eligible for ACA policies. Further, there has been fraud surrounding Medicaid eligibility and variation in provider taxes. The OBBBA will limit or end these issues. The work requirement is no different than for receiving unemployment. This change, plus the limitation on immigrants receiving Medicaid, ensures that the program is maintained for those that need it. No one can simply stay at home, get Medicaid, and do nothing. No immigrant can legally come here and expect to receive federal largesse. And EMTALA laws ensure that those with truly emergent needs or women in labor will still receive care.
The OBBBA is estimated to add three trillion to the deficit….Over 10 years. That’s 300 billion per year. One must also, however, consider the revenue from the new 10% blanket tariff on imports. The U.S. imports over three trillion dollars of goods every year. 10% of that is…300 billion. That looks like overall revenue neutrality to me. It is distorting to present a ten-year number, especially without providing context as well.
In considering all this data, objective, plain information, it is clear that the effects of the OBBBA have been distorted and exaggerated. The bill is not racist; it simply reflects a different concept for provision of care. Care is not being taken away; it is being provided through alternate means that already exist. If we are to have a serious discussion of how medical care is to be provided in the U.S., we cannot posture, shout, and distort. We must have a reasoned argument on methods and costs.
Image: Free image, Pixabay license.