Federal Medicaid cuts could significantly impact psychiatric units at hospitals across the country, many of which already struggle financially while providing essential mental health care. Psychiatric units are costly and typically lose money for hospitals, receiving reimbursement at lower rates than other health services. Between 2023 and 2024, 126 hospitals across the U.S. shut down their inpatient psychiatric units, according to data from the American Hospital Association.
Sarah Steverman of the National Association for Behavioral Healthcare notes that psychiatric units are “often in the red, and, for lack of a better word, kind of subsidized by the rest of the health system.” In contrast, specialty units such as cardiovascular care are lucrative, with cardiologists able to generate up to seven times their salaries for hospitals.
Impact of Recent Legislation
The One Big Beautiful Bill Act, signed into law by President Donald Trump last year, will add strain to psychiatric units. The law is projected to cut federal Medicaid spending by an estimated $886.8 billion over the next decade, largely because new work requirements will push people off the rolls. The Congressional Budget Office estimates it could increase the number of people without health insurance by 7.5 million in 2034.
These cuts significantly affect mental health care because Medicaid covers more people with mental illness than any other public or private insurer. Roughly 29% of an estimated 52 million nonelderly adults with mental illness—about 15 million people—rely on Medicaid, according to health research group KFF.
Cascading Effects and Facility Challenges
As more units are forced to close, Dr. Arpan Waghray, a psychiatrist and CEO of Providence’s Well Being Trust, warns that crowding will increase in emergency rooms and jails. “The two places where people get care if they don’t get care in the right setting is the inpatient (psychiatric) unit, and you cut that, then essentially you have emergency departments that are overcrowded or jails that are overcrowded,” he explained.
At Providence Regional Medical Center Everett in Washington state, roughly 80% of psychiatric inpatients are covered by Medicaid. Gretchen Clark Bower, senior director of Behavioral Health Services, said the financial strain has been long-standing: “The costs of providing care are far more than what we’re getting reimbursed. And that is extremely challenging.” Her concern extends to potential destabilization of patients if their care is interrupted after losing coverage.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.sedaliademocrat.com/stories/medicaid-cuts-could-add-pressure-to-already-stressed-psychiatric-units,51758