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April 29, 2025

Dear Leader Thune, Speaker Johnson, Leader Schumer and Leader Jeffries:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, and our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ºÚÁÏÕýÄÜÁ¿ Association (AHA) writes to express support for the Medicaid program as the reconciliation package is developed. We urge Congress to refrain from considering disruptive policy changes to Medicaid and other health care coverage that could impact access to health care for tens of millions of Americans.

The Medicaid program provides health care coverage to a variety of individuals, including children, pregnant women, the elderly and disabled, veterans and working families. Federal support for the Medicaid program ensures that patients and communities can continue to access critical health care from hospitals, physicians, behavioral health care providers, long-term care facilities and many other caregivers.

For example:

• Medicaid pays for approximately 41% of births nationally and 47% in rural areas^.1
• Medicaid is especially critical for children; it covers nearly half of all children with special health care needs, and about 1 in 3 children diagnosed with cancer.^{2, 3}
• Medicaid also covers more than 1 in 3, or nearly 15 million, individuals with a disability^.4
• Most working age adults on Medicaid are employed but in lower-wage jobs that do not provide affordable health care benefits.⁵
• Medicaid is the nation’s largest payer of mental health and substance use condition services, ensuring patients have access to necessary services.⁶
• Medicaid covers five in eight nursing home residents.⁷
• More than 16 million Medicaid enrollees live in rural areas.⁸

As part of the reconciliation process, Senate and House committees of jurisdiction may be considering harmful reductions to federal Medicaid spending. These include changing the underlying finance structure to a per capita cap, reducing the federal medical assistance percentage (FMAP) for certain states and placing new limits on provider taxes. Any of these changes would negatively impact state financing for their Medicaid programs, which in turn would harm hospitals and Medicaid beneficiaries. Should states see reductions in federal support for their Medicaid programs, it could force them to further reduce provider payments to account for these losses. It is important to note that the Medicaid program consistently underpays hospitals for the care provided to its patients, even with additional expenditures made by states to adjust for low base payment rates. Nationally, the Medicaid shortfall — the difference between the hospital's cost of serving Medicaid patients and the payments it receives for services — was $27.5 billion in 2023.

Additionally, other policies congressional committees may consider could include those that could result in the displacement of Medicaid coverage for millions of beneficiaries and could lead to additional uncompensated care for our facilities. The combination of reduced provider payments and increased uncompensated care could force hospitals to make difficult decisions about reducing staffing and service lines and whether they will be able to remain open and continue to serve Medicaid beneficiaries as well as the wider community.
The AHA urges Congress to consider the full impact these Medicaid proposals would have on all Americans and communities, including the hospitals, health systems and other care providers that serve them, before moving forward with these significant policy changes.

In addition to being aware of the potential for harmful changes to the Medicaid program, we ask Congress to address before the end of this year the expiration of the enhanced premium tax credits (EPTCs). If these provisions fully expired, the impact would be a reduction to hospitals of $28 billion over 10 years. Congress must consider the totality of the impact of the Medicaid changes and the EPTC expiration on the financial stability on hospitals and their ability to operate and provide essential services.

We appreciate your leadership and look forward to working together to ensure that Americans continue to have access to quality health care.

Sincerely,
/s/
Richard J. Pollack
President & Chief Executive Officer

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¹ AHA analysis of WONDER data published by the Centers for Disease Control and Prevention, available at .
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