Budget bill raises alarm for rural hospitals in Adirondacks

Clifton-Fine Hospital CEO warns that cuts to Medicaid could leave thousands without care—and push small facilities to the brink

By Brenne Sheehan 

Last year, Clifton-Fine Hospital celebrated as it broke ground in building its new 10,000-square-foot emergency room. 

It also became a designated rural emergency hospital— which would allow the hospital to prioritize emergency care and outpatient services.  

But since the U.S. House of Representatives passed the budget reconciliation bill—nicknamed the “One Big Beautiful Bill” by House Republicans—May 22, Clifton-Fine’s CEO Dierdre Sorrell is uncertain about the rural hospital’s future. 

Sorrell says the bill, which would cut federal Medicaid spending by billions over the next 10 years, could be devastating for Clifton-Fine and its marginally low-income population who rely on Medicaid to pay for healthcare. 

“Our year-round population is small, declining, and aging,” Sorrell said. “Rural hospitals already operate on razor-thin margins and have been losing money for years, we certainly aren’t in a financial position to backfill these massive cuts.” 

Aimed at decreasing federal spending, the “One Big Beautiful Bill” increases current eligibility requirements for Medicaid enrollment, prohibits states from establishing new provider taxes to fund state-covered Medicaid and reduces the current 90% expansion match rate to 80% for states who supplement health coverage for immigrants who do not have a qualified Medicaid status. 

The Congressional Budget Office projects the bill would result in $793 billion in cuts to federal Medicaid spending with provisions that could reduce or deny coverage to 7.8 million people over the next 10 years, in order to supplement cuts that, according to the CBO, are aimed at offsetting revenue losses from prior tax reductions.

Sorrell says that for all rural hospitals in the state, Medicaid is crucial to cover operational costs for the hospital itself. 

“Patients are going to be in need of much higher priced healthcare, in which they aren’t going to be able to afford, which will ultimately fall back on hospitals,” Sorrell said. 

Nearly one in three people in the North Country are beneficiaries of Medicaid coverage. 

As a rural emergency hospital, Clifton-Fine no longer offers inpatient services for those who need further care after emergency treatment. Clifton-Fine is one of three hospitals in the Adirondack Park, along with Adirondack Health in Saranac Lake and Elizabethtown Community Hospital in Elizabethtown.

In an emailed statement, Adirondack Health CEO Aaron Kramer echoed Sorrell saying that rural hospitals already operate at “very thin margins.” Adirondack Health is the largest hospital in the park, with 97 beds. 

“It is important for patients to have access to adequate health insurance coverage and for reimbursement rates to cover the cost of the care we provide,” Kramer said. 

Sorrell fears that patients without Medicaid coverage would avoid the increased cost of preventative care such as routine doctor visits, specialists and other outpatient practices provided at Clifton-Fine. As a result, many of these wait until they need emergency treatment, which is more expensive, and dangerous, for the patient and the hospital.

“Certainly it’ll give you a sicker population,” Sorrel said. “Your mortality rates will probably be higher, and I think you’ll see a lot of little hospitals closing that just won’t be able to afford to cover that self-pay.”

Kevin Kerwin, president of Iroquois Healthcare Association, a nonprofit regional healthcare trade organization representing more than 50 hospitals and health systems, says the proposed cuts to Medicaid could set back his group’s past 15 years of advocating for more Medicaid expansion in Upstate New York.

Under Gov. Kathy Hochul, the state has expanded uninterrupted Medicaid benefits for children under 6, expanded Medicaid Managed Care and has vowed to “modernize Medicaid eligibility.” 

Even with supported funding, rural hospitals are struggling as it is, Kerwin says. The proposed cuts would expect New York to supplement Medicaid costs by $44.3 billion a year to maintain current service levels. 

And the service at emergency hospitals won’t go down regardless of Medicaid coverage, Kerwin says— meaning rural hospitals might be forced into negative spending if not supplemented.  

“Hospitals have a legal, moral and missionary obligation to treat,” Kerwin said. “Whether you have insurance or don’t have insurance— it makes no difference. If you don’t have insurance, that means the hospital won’t be paid for those services.” 

Kerwin says smaller hospitals may be forced to close, hurting both the facilities and their communities.

“If you lose a hospital in our area, that’s going to have a very negative impact on the whole community,” Kerwin said. “From an economic point of view, jobs will be lost. And of course, healthcare will be lost.” 

During a May meeting, Essex County Manager Mike Mascarenas told supervisors the proposed cuts to Medicaid would also raise property taxes. 

In New York, counties are additionally required to fund Medicaid with money mostly obtained from property taxes. With decreased funding at the federal level, county governments may raise taxes in order to make up the cost, Mascarenas said. 

Both Clifton-Fine and Adirondack Health are members of the IHA, which lobbies for legislation aimed at helping rural upstate hospitals at the state and federal levels. 

U.S. Rep. Elise Stefanik, who represents the North Country in New York’s 21st congressional district, voted in favor of  the budget reconciliation bill, which passed by a narrow margin. She called it “a historic victory for New Yorkers and President Trump’s America First agenda” in a Facebook post. 

In the post, she says that the bill includes provisions that “Protect Medicaid for Americans by removing 1.4 million illegals.” 

Sorrel said that the Clifton-Fine serviceable area does not have a high population of illegal immigrants. Federal law currently prohibits undocumented immigrants from receiving Medicaid benefits, except for emergency services on a case-by-case basis. 

“I would rather see them look at this in steps instead of a blanket across the board,” Sorrell said. “I’m in support of always using some logic and really taking things slowly, which I don’t think seems to be a forte of the current administration.” 

Stefanik’s office did not respond to requests for further comment. 

“Elise is from up in this area, she certainly knows this is a low-income, heavily Medicaid [dependent] area,” Sorrell said. “I hope that if she has some say at that level, she’s thinking through that carefully.” 

Now in the Senate, several Republican Senators want changes made to the bill. Senators Josh Hawley of Missouri and Susan Collins of Maine, echo points that the bill’s cuts to Medicaid will negatively affect rural hospitals and low-income families. 

The Senate is working to pass the bill ahead of a July 4 deadline for President Trump’s signature.

As of now, Clifton-Fine doesn’t have a course of action if the provisions to Medicaid are signed into law. But through advocacy groups like the IHA, they contact their local representatives to advocate for change. 

At its annual meeting with upstate hospital CEOs, the IHA began talking contingency plans if the provisions follow through. The organization continues to be in touch with state and federal representatives to speak against the cuts, Kerwin said. 

“Hospitals have to budget,” Kerwin said. “They have to try to figure out what programs they can provide, and this just makes it all the more difficult.” 

Photo at top: Just yards from Star Lake, the Clifton-Fine Hospital (center and left L-shaped wings in photo) was built in 1951 with an 800 square-foot Emergency Room. When the Clifton-Fine Clinic was destroyed by fire at a different location in 2008, a clinic wing (right) was added. Photo by Tom French