Many military members may get care at hospitals at risk of financial distress — partly due to Trump cuts
(NEW YORK) — As many as 724,000 service members, their families and veterans may rely on health care at hospitals that face financial vulnerability, partly due to cuts in President Donald Trump’s megabill, according to a new analysis.
The bill, known as HR.1, was signed into law in last summer and included sweeping changes to health care including Medicaid. Strict work requirements, reduced federal funding and tightening provider tax rules impacts hospitals that are dependent on Medicaid, increasing their risk of uncompensated care and reducing revenue.
Service members and their families — many of whom are covered by the military health insurance program TRICARE — rely heavily on civilian hospitals for health care, particularly in areas without military treatment facilities.
The analysis, conducted by researchers the Healthcare Quality and Outcomes Lab at Harvard’s T.H. Chan School of Public Health (HSPH) and first viewed by ABC News, looked at how many TRICARE beneficiaries may be reliant on hospitals considered at risk of financial distress under these new changes.
The researchers said many hospitals rely so heavily on Medicaid reimbursements that cuts to the program under HR.1 will affect care the hospitals provide to other patients, including those in the military community.
“We wanted to get a sense of how many hospitals are potentially at risk for becoming potentially financially unstable with the upcoming looming HR.1 Medicaid cuts,” Dr. Jose Figueroa, co-author of the analysis and associate professor of Health Policy and Management at HPSH told ABC News. “There’s a big focus on rural hospitals, but it is not just rural hospitals at risk, that we were finding that across the country, many urban hospitals are at risk.”
Figueroa said medical services that many TRICARE beneficiaries need are often only offered in civilian hospitals or in civilian health care systems. These beneficiaries are then exposed to hospitals that are potentially at financial risk, he noted.
“Military active duty service members on TRICARE and their families also on TRICARE are increasingly relying on civilian hospitals for their care, even when they’re living within a military base,” Figueroa said. “If we’re finding evidence that there are many hospitals across the country that are at risk, to what extent will that affect military personnel and their families?”
TRICARE is run by the U.S. Department of Defense for those connected to the military, including active duty members, National Guard and reserve members, military retirees and their families. It is not the same as Medicaid, although some may qualify for both.
For their analysis, the team used three different criteria to identify a hospital that might be at risk.
If more than one in four of patients being treated at the hospital are on Medicaid, given that the HR.1. cuts are disproportionally affecting those on the federal health insurance program.
If the hospital is a safety net hospital, which serves a large number of patients with no insurance or with Medicaid, or a critical access hospital, which is a rural facility that provides essential health care services to underserved communities.
The Altman Z-score, which is an aggregate measure of the financial health of a hospital, combining liquidity, profitability, financial efficiency and solvency measures to categorize a hospital as being at risk for bankruptcy.
About 4% of hospitals were considered at higher risk of financial distress — meeting three of the criteria and about 19% were at moderate risk of financial distress — meeting two — according to the analysis.
The team then used a dataset to help to identify 8.9 million TRICARE beneficiaries and their ZIP codes.
The analysis estimated that more than 117,000 TRICARE beneficiaries are currently living on or near military installations potentially exposed to a hospital at higher risk of financial distress. Additionally, more than 607,000 are living near a hospital with a moderate risk of financial distress.
This means that more than 724,000 TRICARE beneficiaries are living in military installation ZIP codes — including bases, camps, posts, depots and stations — where at least one hospital has multiple risk factors for financial distress.
Additionally, more than 3.5 million TRICARE beneficiaries living in ZIP codes without a military installation are potentially exposed to a higher-risk or moderate-risk hospital, the analysis found.
“As a country, we should do our best to take care of the people protecting us,” Figueroa said. “Military personnel and their family members should be protected, and sometimes we have to remind ourselves that drastic cuts to our health care that affect our health delivery system also affects our active military personnel and their families as well.”
Last month, during a Senate hearing, Chief Master Sergeant of the Air Force David Wolfe said troops were struggling to get health care appointments and made reference to issues with TRICARE’s reimbursement rate for providers.
“What we’ve all seen over the length of our careers is a gradual erosion in the availability of that health care for our service members and their families,” Wolfe said, according to the Military Times.
Based on the results of the Harvard analysis, Sen. Elizabeth Warren, D- Mass., is launching an investigation into how the Pentagon is guiding military families through health care cuts and whether Republicans and the Trump administration consulted the Pentagon before the cuts were made, her office told ABC News first.
Warren is also pressing the Pentagon to explain how these cuts are affecting military readiness.
“Donald Trump is putting troops’ lives on the line in the Middle East while ripping away health care from their families at home,” Warren said in a statement to ABC News. “Republicans swore the Medicaid cuts in their Big Beautiful Bill were about cutting waste, fraud, and abuse — is that what they think of our military families’ health care?”
In a statement sent to ABC News, the Pentagon didn’t address Warren’s comments.
“As with all congressional correspondences, the Department will respond directly to the authors as appropriate,” a spokesperson said.
A Pentagon official also said it wouldn’t be appropriate to comment on the methodology of studies not conducted by the department.
The White House didn’t respond to ABC News’ request for comment.
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