State officials urge Congress to avoid Medicaid cuts, highlight potential negative impacts on rural hospitals, local communities

Roundtable at Munson Healthcare in Cadillac discussed devastating impact of potential cuts to Medicaid, which provides health care coverage to 1 in 4 Michiganders

• Potential cuts would impact health care coverage of 2.6 million people statewide. 
• Losing access to health care in rural areas weakens the local economy.
• The State of Michigan is urging Congress to protect Medicaid funding.

Cadillac, Mich. — Today, state officials and leaders at Munson Healthcare Cadillac Hospital discussed the negative impacts of potential cuts to Medicaid funding on patient care and the financial health of rural hospitals and their local communities. Congress is working to finalize a sweeping, partisan budget reconciliation bill that is expected to contain drastic cuts to critical programs Michiganders rely on. State officials and health care leaders are urging Congress to vote in the best interests of the people of Michigan by opposing these harmful reductions.

Federal cuts to Medicaid would impact health care services for families and individuals with small town and rural communities disproportionally affected. With fewer providers and more people without Medicaid, people are likely to forgo services like early screenings, medication and mental health support.

“Many Michigan residents will lose their health care under these proposed Medicaid cuts,” said Michigan Department of Health and Human Services Director Elizabeth Hertel. “Without access to preventative health services that help families lead healthier lives, there will be an increased reliance and strain on the state’s emergency care system. We are committed to fighting for Michigan families so they can keep their health care coverage and access the services they need where and when they need them.”

Medicaid covers one in four Michiganders — 2.6 million people statewide — including more than 40% of children in Michigan and more than a third of people in rural areas. These are Michiganders who may be battling cancer, veterans living with a disability and kids who just need a check-up. With proposed cuts, Michigan could lose over $20 billion in Medicaid funding over a 10-year period – resulting in lost access to essential care for all Michiganders, including 30% with Medicaid coverage – roughly 750,000 people.

“We are urging our members of Congress to consider the detrimental short- and long-term economic and human impacts of cutting Medicaid funding,” said Michigan Department of Labor and Economic Opportunity Director Susan Corbin. “In many rural areas, hospitals and health care providers are major employers. Cuts to Medicaid will have devastating effects on local economies and will result in job losses and lost tax revenue for local communities. Residents will be forced to travel longer distances for health care which will increase the risk of delayed or missed treatment. It’s simple: Medicaid cuts are reckless and will hurt Michiganders.”

Health care is the largest private sector employer in Michigan, and Medicaid funding supports thousands of jobs across the state. Loss of funding will contribute to adverse economic conditions and financial instability in rural areas. The immediate effect is job losses, as hospitals are often among the largest employers in small communities, providing well-paying jobs for health care professionals, including physicians, nurses, administrative staff and support workers. This loss of employment reduces household incomes and decreases local spending, which can hurt small businesses and lead to further economic decline.

Additionally, the absence of a nearby hospital makes rural areas less attractive for businesses and potential residents, leading to population decline and reduced tax revenue for local governments. Emergency response times also increase, negatively affecting public health and productivity. Without accessible health care, workers may suffer from untreated illnesses, leading to higher absenteeism and lower workforce participation. In the long term, the economic vitality of rural communities diminishes, creating a cycle of financial hardship and reduced investment in essential services.

Medicaid supports people at every stage of life, keeps hospitals operating and improves the health and stability of individuals and families across Michigan. Cutting Medicaid funding would have serious, harmful effects on patients, health care providers and entire communities, especially rural communities.  

“In Northern Michigan, 75,000 residents across the region and 61 percent of our births at Cadillac Hospital are covered by Medicaid,” said Munson Healthcare President and CEO Ed Ness. “In addition to impacting thousands of people and families who are already struggling, without adequate funding health care facilities like ours will face immense challenges in maintaining operations and serving our communities.”  

Medicaid funding is crucial support for Michigan’s 65 rural hospitals, helping to maintain important service lines including emergency care, obstetrics and maternity services, cancer treatments, mental health support, long-term care and other life-saving operations. If Medicaid funding is reduced, rural health care providers will face difficult choices, including potentially cutting services and laying off staff.

“Hospitals serve as the backbone in our communities and Medicaid is key for maintaining the viability of a hospital and access to care for Michiganders,” said Michigan Health & Hospital Association Executive Vice President of Government Relations & Public Policy Laura Appel. “Going after and restricting existing Medicaid financing programs will harm access to care for not just Medicaid beneficiaries, but all community members who depend on health care services, particularly those in rural Michigan.”

Medicaid is a lifeline for Michigan’s residents, communities and economy. The Michigan Departments of Labor and Economic Opportunity, Health and Human Services, along with Munson and the Michigan Hospital Association are urging Congress to act in the best interests of not only the health and well-being of our most vulnerable residents, but also the stability of our health care system and workforce. Protecting this coverage is essential to keeping Michigan strong and moving forward.