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medicare
Trump’s Budget Cuts Will Only Make Things Worse for Struggling Rural Hospitals
The budget bill will put enormous strain on rural hospitals, which are often the largest local employer in addition to crucial care providers.
Sep 14, 2025
Bari Senecal waits outside the emergency department at Columbia Memorial Hospital in Hudson, New York. “I do construction. I fell three stories,” Senecal explains. “I was on top of the scaffold and this new kid we hired didn’t put the braces on correctly.”
Like 70 million Americans, Senecal qualifies for Medicaid, the state and federally-funded public health insurance program for low-income patients. She also qualifies for Medicare. She’s what’s known as being “dual-eligible.”
At Columbia Memorial, 63% of patient service revenue is reimbursed through a combination of the two programs. But “we run a deficit every year,” says Dorothy Urschel, CEO of Columbia Memorial Health. “For many, many years, we’ve been reimbursed at well below cost.”
The hospital has the only emergency room serving the more than 110,000 residents scattered among two predominately rural counties. “Of course, we’re struggling,” says Urschel. “But rural community hospitals always struggle.”
Columbia Memorial already closed its maternity ward in 2020—part of a distressingly common trend. A recent study from the Journal of the American Medical Association found that more than half of rural counties now have no hospital-based obstetric services whatsoever.
Like other rural hospitals across the country, Columbia Memorial is bracing for the loss of Medicaid-covered patients and funding because of the Republican reconciliation bill, dubbed the “One Big Beautiful Bill Act,” which was signed by US President Donald Trump this summer.
Over the last decade more than 100 rural hospitals have closed across the country—50 of them in just the last eight years.
According to the nonpartisan Congressional Budget Office, the bill will cut $911 billion in federal Medicaid spending over the next decade and result in an estimated 10.3 million people losing their Medicaid health insurance. Add in cuts to the Affordable Care Act and the number of people expected to lose their insurance rises to 16 million.
According to Larry Levitt, vice president for health policy at the Kaiser Family Foundation, this amounts to “the biggest rollback in federal support for health coverage ever.” And it will put enormous strain on rural hospitals especially—which in Columbia County and elsewhere are often the largest local employer in addition to crucial care providers.
The GOP staggered these cuts so that the worst effects of the budget changes won’t be felt until after the midterm elections in 2026 are safely past. But “some rural hospitals around the country have already started closing” in anticipation of the cuts, warns Michael Chameides, a member of the Columbia County Board of Supervisors.
Senator Ed Markey (D-Mass.) provided a list of 338 rural hospitals in danger of either closing or drastically scaling back services. All 338 had experienced three consecutive years of negative total profit margins and were in the top 10% of institutions with patients on Medicaid.
Rural hospitals facing disaster are identified individually according to which state will see the losses. Kentucky, Louisiana, and California top the list with 35, 33, and 28 rural hospitals identified as at risk of closure, respectively. New York has 11. (Columbia Memorial isn’t officially one of them, but Garnet Medical Health Center Catskills, another Hudson Valley hospital, is.)
An estimated 1,796 hospitals remain in rural America, but those numbers obscure the level at which the services they offer may have already contracted. According to the Government Accountability Office, over the last decade more than 100 rural hospitals have closed across the country—50 of them in just the last eight years.
In New York and every other state, as federal funding runs dry it will be up to the governor and legislature to make provisions for struggling rural hospitals—or stand by and watch them collapse.
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Just Say No to AI-Assisted Medicare Preauthorization
A new AI-driven Medicare prior-authorization pilot could dramatically weaken Medicare, just another frightening step toward privatization and profiteering.
Sep 03, 2025
The odds are that if you have private health insurance or someone in your family has private health insurance, you have heard the dreaded phrase “we need preauthorization” from your insurance company. What this means is that your insurance company needs to approve in advance that your treatment or prescription is covered. In theory, this should be no big deal. However, reality is something else. But as the New York Times points out:
Private insurers often require a cumbersome review process that frequently results in the denial or delay of essential treatments that are readily covered by traditional Medicare. This practice, known as prior authorization, has drawn public scrutiny, which intensified after the murder of a UnitedHealthcare executive last December.
So, reading this you might think that you are glad that you or someone in your family choose traditional Medicare (in other words not a Medicare Advantage plan), so you would be able to avoid the “prior authorization needed” drama. Well, unfortunately you would be wrong as the prior authorization is slowly coming to Medicare. In late June, the Centers for Medicare and Medicaid Services (CMS) issued a press release:
The Centers for Medicare & Medicaid Services (CMS) is announcing a new Innovation Center model aimed at helping ensure people with Original Medicare receive safe, effective, and necessary care. Through the Wasteful and Inappropriate Service Reduction (WISeR) Model, CMS will partner with companies specializing in enhanced technologies to test ways to provide an improved and expedited prior authorization process relative to Original Medicare’s existing processes, helping patients and providers avoid unnecessary or inappropriate care and safeguarding federal taxpayer dollars. This model builds on other changes being made to prior authorization as announced by the US Department of Health and Human Services and CMS on Monday.
In theory, this move by CMS does not sound bad. Who could be against reducing wasteful spending in Medicare and making sure that people receive appropriate treatment? A spokesman for CMS has been quoted that the government would not review emergency services or hospital stays.
The CMS prior Medicare authorization model is being rolled out in January 2026 as a six-year trial program in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington State. In theory, the preauthorization program will look at those medical treatments that are not of benefit to Medicare beneficiaries.
What CMS is not drawing attention to is that this preauthorization will be done by artificial intelligence (AI)—or as CMS puts it “enhanced technologies.” It is not until much later in the press release that CMS gets to the fact that AI will do the screening authorization:
The WISeR Model will test a new process on whether enhanced technologies, including artificial intelligence (AI), can expedite the prior authorization processes for select items and services that have been identified as particularly vulnerable to fraud, waste, and abuse, or inappropriate use.
CMS, at the moment, says that the AI preauthorization screening will be used on only an extremely limited number of procedures. But what guarantees do Medicare beneficiaries have? The bottom line is that you have to ask yourself: Would you be comfortable having your access to your earned Medicare benefits be determined by AI? My answer is a firm, “No, thank you.”
We also need to ask what are the financial incentives that Medicare is injecting into the system though preauthorization? It is hard not to conclude that this is a step toward privatization of traditional Medicare.
Healthcare professionals are concerned by CMS’ preauthorization program. In mid-July, the American Medical Association (AMA) wrote to CMS:
While the stated goal of the model is to curb wasteful spending and protect the Medicare Trust Fund, the mechanisms employed raise several significant issues that must be addressed prior to implementation. The AMA strongly urges CMS to pause the January 1, 2026 implementation of the WISeR Model to allow additional stakeholder input, full analysis of the model’s operational impacts, and development of clear guidance for physicians. Physicians should not be forced to adapt to such substantial administrative requirements without sufficient time to understand the implications and prepare. Absent this opportunity for meaningful physician and stakeholder engagement, the model risks creating confusion, administrative burden, and unintended consequences that could ultimately undermine CMS’ own goals to reduce waste, fraud, and abuse.
On Capitol Hill, a number of House Democrats led by Rep. Alexandria Ocasio-Cortez of New York have pushed back on the AI preauthorization pilot project. In late July, they wrote to CMS:
We understand that CMMI has intentionally selected healthcare services that are reported to have limited clinical value and may be vulnerable to abuse in the Medicare program, and we support efforts to ensure Medicare remains a good steward of taxpayer dollars. However, the expansion of AI-fuelled prior authorization will not improve program integrity in Traditional Medicare. Giving private for-profit actors a veto over care provided to seniors and people with disabilities in Traditional Medicare, even as a pilot program, opens the door to further erosion of our Medicare system. We therefore strongly urge you to immediately halt the proposed WISeR model and instead consider steps to address the well-documented waste, fraud, and abuse in the Medicare Advantage program.
The House Democrats raise a very intriguing question about why CMS is not focused more on fighting waste, fraud, and abuse in Medicare Advantage plans? As the Center for Budget and Policy Priorities reported in January of this year, there is considerable evidence to show that Medicare Advantage plans are overpaid by the government. It would make sense for CMS in pursing fraud and waste to follow the money which means looking at Medicare Advantage plans.
Give the political dynamics in Washington, it seems likely that the CMS preauthorization demonstration project will go into effect in January 2026. Then in the summer of 2026, with the midterm elections looming, as members of Congress will begin hearing from constituents who have had their earned Medicare benefits denied by AI, Congress will revisit this issue. It is tragic that in the meantime people will be hurt.
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'AI Death Panels': Trump Pilot Program Seeks to Bring 'Very Worst' For-Profit Insurance Practices to Medicare
The administration, warned two union leaders, "is inserting private AI companies, which have a giant financial stake in the denial of care, into the doctor-patient relationship."
Aug 29, 2025
Creating what critics are equating to "AI death panels" elderly Americans in need of care, the Trump administration is launching a pilot program in six states that will use artificial intelligence to determine whether Medicare recipients should qualify for certain procedures.
As reported by The New York Times on Thursday, the pilot program will hire private firms to deploy AI to make what are known as "prior authorization" decisions regarding whether Medicare should pay for certain procedures, including spinal surgeries and steroid injections. The program is set to run first in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington.
According to the paper, the program will rely on algorithms similar to those "used by insurers have been the subject of several high-profile lawsuits, which have asserted that the technology allowed the companies to swiftly deny large batches of claims and cut patients off from care in rehabilitation facilities."
The way the program is being structured will also give AI firms big incentives to maximize the denial of claims for Medicare recipients, as the Times reported that "Medicare plans to pay them a share of the savings generated from rejections."
Abe Sutton, the director of the Center for Medicare and Medicaid Innovation, emphasized in an interview with the Times that this program would not be used to review emergency services or hospital stays.
Even so, some experts and advocates have warned that this program risks bringing the same problems experienced by people who use private insurance to Medicare.
"It's basically the same set of financial incentives that has created issues in Medicare Advantage and drawn so much scrutiny," Ohio-based surgeon Dr. Vinay Rathi, who is also an expert in Medicare payment policies, explained to the Times. "It directly puts them at odds with the clinicians."
Jathan Sadowski, a senior lecturer and research fellow in the Emerging Technologies Research Lab at Monash University, also warned about private insurance practices creeping into traditional Medicare.
"The government is hiring companies using AI to make those determinations about healthcare," he wrote on X. "This is exactly the same tactic that private insurers like UnitedHealth use to delay and deny treatment."
The reported pilot program also drew harsh reviews from the American Federation of Teachers (AFT), as president Randi Weingarten and the union's Retirees Program and Policy Council co-chair Tom Murphy issued a joint statement accusing the Trump administration of "attempting to transform Medicare into the very worst of private insurance."
"Instead of making life easier and better for older Americans, this administration is introducing extra hurdles that are burdensome to patients and often get in the way of their desperately needed treatments," they said. "And the administration is inserting private AI companies, which have a giant financial stake in the denial of care, into the doctor-patient relationship."
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