Owensboro Health has joined hospitals across the state in sounding the alarm over proposed federal cuts to Medicaid, saying that the reductions could jeopardize care for thousands of Kentuckians and force some hospitals to close their doors.
In a letter coordinated by the Kentucky Hospital Association (KHA), more than 60 hospitals and health systems — including Owensboro Health and RiverValley Behavioral Health locally — are urging members of the U.S. House to oppose the Senate’s version of the “Big, Beautiful Bill.”
According to the letter, “one-third of our citizens rely on the Medicaid program – it covers 50% of Kentucky’s children, as well as seniors and working families.”
The letter warns that the Senate proposal would slash Medicaid funding by 90%, from $5 billion to $450 million, by aligning State Directed Payment (SDP) programs with lower Medicare rates.
“The carefully negotiated House bill achieved its Medicaid savings target while still protecting Kentucky’s hospitals and their patients. Importantly for Kentucky, the House provisions recognized the significant gains in patient outcomes from our value-based Medicaid State Directed Payment (SDP) programs, which were developed by President Trump during his first term,” the letter reads. “… The Senate bill would reverse course by punishing Kentucky by ending — not just cutting — these programs by reducing them to Medicare levels.”
According to the letter, Kentucky has the 40th-lowest Medicare reimbursement rates in the nation.
According to the KHA, Kentucky’s hospitals employ roughly 90,000 people and contribute over $14 billion to the state’s economy. The Senate bill, it said, would threaten more than 33,000 of those jobs and result in over $1.7 billion in lost economic activity. Rural hospitals, which already serve high-poverty regions and operate on thin margins, would be hit hardest.
Without continued Medicaid support, the letter warns, hospitals “will have no choice but to eliminate services, such as obstetrics, mental health, cancer treatment, and emergency care.” The letter added that “many will simply go without care and those that seek it will have to travel long distances.”
Brian Hamby, Director of Marketing for Owensboro Health, said in a statement Wednesday afternoon that the proposed changes would have far-reaching consequences not only for Medicaid recipients but for entire communities.
“At Owensboro Health, our mission is to heal the sick and improve the health of our communities,” Hamby said. “Owensboro Health stands with healthcare organizations across Kentucky in urging lawmakers to reject the Senate’s extreme cuts to the Medicaid program.”
The statement continued, “One in three of our friends and neighbors in Kentucky rely on Medicaid for their healthcare coverage. Especially in rural communities, hospitals and doctor’s offices rely on Medicaid funding to stay open and deliver life-saving care. While it is too early to know the direct implications to Owensboro Health, we believe these proposed cuts could force SOME hospitals in Kentucky to close and reduce programs and services, harming access to care for all patients, not just those covered by Medicaid.”
RiverValley Behavioral Health President and CEO Dr. Wanda Figueroa-Peralta signed onto the letter but declined to comment at this time.
The letter ends by reiterating support of the House version of the “Big, Beautiful Bill.” The KHA urges lawmakers to pass that version instead, saying “The health of Kentucky’s people and economy depends on it.”
