WASHINGTON, D.C. — To the president, it’s “beautiful.” For rural hospital administrators, including those on the peninsula, it’s causing heartburn.

The massive budget bill that was passed by Congress last week — dubbed the “big, beautiful bill” by President Donald Trump and Congressional Republicans — will have damaging repercussions for Ocean Beach Health and the community it serves, OBH CEO Merry-Ann Keane and Nancy Gorshe, chair of the public hospital district’s commission, warned last week.

Gorshe, in a letter to the Observer before the bill’s passage, said the bill could lead to OBH losing 40% of its revenue if passed and signed into law, a financial loss that she said is “not sustainable.” Keane said the loss in revenue would jeopardize essential services like OBH’s medical clinics, emergency care, lab testing and imaging.

“Long term, this could lead to fewer local options and the slow erosion of rural health care,” said Keane, who took over as CEO last fall. She referenced a July 1 statement from the Washington State Hospital Association that called the bill a “disaster” for the state’s hospitals and the patients they serve. OBH officials, Keane said, agreed with WSHA’s assessment.

Medicaid-related provisions in the bill will result in an increase of nearly 12 million more people without health insurance by 2034, according to a report from the nonpartisan Congressional Budget Office (CBO). In Washington, the CBO projects that nearly 330,000 people will lose their health insurance, 13th-most of any state.

The projected hike in the uninsured is mainly due to new national work requirements that would be placed on the 71 million recipients of Medicaid, a joint federal and state program that provides government-sponsored health care to low-income Americans and people with disabilities. Washington’s Medicaid program operates under the name of Apple Health.

Provider taxes slashed

The bill also lowers provider taxes from 6% to a maximum of 3.5% by 2032 in the 40 states — including Washington — that have expanded Medicaid under the Affordable Care Act since it became law in 2010.

Many states use provider taxes to finance their Medicaid programs, which levy taxes on medical providers to leverage a larger federal contribution. Under the ACA, the federal government pays 90% of the costs for new enrollees in states that have expanded Medicaid, while states are responsible for 10%.

All told, the CBO projects that federal spending on Medicaid will be cut by more than $1 trillion over the next decade. Including Medicare and Obamacare, the total cuts to health care programs clock in at roughly $1.1 trillion.

The cap on provider taxes in particular will seriously threaten the finances of rural hospitals — especially critical access hospitals like OBH — because they rely more on Medicaid and Medicare funding than urban hospitals do. The National Rural Health Association stated in a June 20 report that, on average, “rural hospitals are slated to lose 21 cents out of every dollar they receive in Medicaid funding.”

Gorshe lamented the rate at which rural hospitals have already been shuttering, saying it leads not only to patients traveling longer distances for care, but also costs communities “jobs, stability and peace of mind.”

Both Gorshe and Keane pointed out that 80% of the patients that OBH serves rely on Medicaid or Medicare. While high, it should not come as much surprise given both Pacific County’s relatively high poverty rate and its older-skewing population.

“We’re deeply grateful to our community for supporting recent renovations and expansions through the capital facilities bond,” said Keane. “That investment gives us strength — but it cannot protect us from federal policy changes of this magnitude.”

The reduction on provider taxes won’t go into effect until 2028, which Senate Majority Leader John Thune, Republican of North Dakota, told Punchbowl News on July 1 was to try and avoid political blowback in next year’s midterm elections. The new eligibility requirements for Medicaid do not go into effect until Jan. 1, 2027.

Partisan division

The bill was opposed by every Democratic member of Congress, including Rep. Marie Gluesenkamp Perez, D-Skamania, who has had one of the most bipartisan voting records in the House this year — to the chagrin of some in her own party. Sens. Patty Murray and Maria Cantwell, both Democrats, derided the bill as it moved through the Senate late last month over its health care provisions.

But Republicans, who hold narrow majorities in both the House and Senate, overcame some defections within their party to pass the wide-ranging bill and send it to the president’s desk. The bill passed 51-50 in the Senate, with Vice President J.D. Vance providing the tie-breaking vote, and 218-214 in the House.

Trump signed the bill during a Fourth of July ceremony at the White House.

Gluesenkamp Perez said in a statement that the reconciliation bill “guts” Medicaid and will cost rural hospitals in Southwest Washington tens of millions of dollars. She also cited a report published by Democrats on Congress’s Joint Economic Committee, who used CBO’s analysis of the bill to estimate that more than 31,000 people in the 3rd Congressional District will lose their health insurance.

“This doesn’t only affect those on Medicaid — when rural hospitals suffer, the health of rural communities like mine suffers,” the congresswoman said.