Southeast Iowa progressive groups organize meeting on Medicaid rule changes

FAIRFIELD — Kerri Rupe held up a stack of paper to an audience at the Cambridge Learning Center on the Jefferson County Fairgrounds.

It was the paperwork required to keep her 90-year-old mother-in-law on Medicaid, and it must be filed twice a year. “She’s got a packet of this stuff,” said Rupe, an advanced registered nurse practitioner and professor emeritus at the University of Iowa School of Nursing.

Rupe’s mother-in-law lives on $700 monthly Social Security checks, qualifying her for Medicaid to cover her Medicare bills. Much of the rest of her income goes to cover medications.

At age 90, Rupe’s mother-in-law can avoid working to continue receiving Medicaid under new rules expected to start later this year in Iowa. “But if there’s so many people that need that help, who’s going to get the help?” Rupe asked. “Who’s going to be left? How do you decide?”

Rupe was speaking at a forum on how Medicaid rule changes enacted in 2025’s One Big Beautiful Bill Act (OBBBA). The law aims to drastically reduce Medicaid spending over the next decade by, among other things, requiring all Medicaid recipients to work at least 80 hours a month. They’re exempt if they’re old, young or fall into various categories.

Rural leaders fear the rules will mean fewer people receiving health insurance and fewer dollars to support local hospitals and clinics, leading to reduced services and closings.

The Rural Restoration Project (RRP) and Indivisibles of Jefferson County Iowa organized the event. The RRP builds economic and social opportunities in the five counties of Iowa Senate District 44. Indivisibles of Jefferson County Iowa is a nonprofit, nonpartisan organization dedicated to promoting a healthy democracy in partnership with the national Indivisible movement.

The OBBBA “made some very deep cuts to both Medicaid and the Affordable Care Act,” or ACA, commonly called Obamacare, said Randy Dillon of Fairfield, a retired tax partner with international accounting firm KMPG. The Congressional Budget Office (CBO) estimates cuts to both programs will total more than $1 trillion over 10 years: $763 billion from Medicaid and $268 billion from the ACA.

An estimated 7.5 million people will lose health insurance under Medicaid and another 2.1 million Americans will no longer be able to afford ACA premiums, the CBO said. The Trump administration is considering additional rules that may lead to as many as 16 million people losing health insurance, Dillion said.

In 2025, 603,000 Iowans were on Medicaid, Dillon said, including 240,000 children. KFF, a nonprofit, nonpartisan health care research organization, estimates 68,000 of those people would lose coverage.

That happens, Dillon said, because of what the new law calls the Community Engagement requirement: Besides proving they have little income, Medicaid recipients would have to work at least 80 hours per month. Iowa has requested a waiver from the law that would allow it to require as much as 90 hours of work per month, Dillon said. The new rules will take effect on Jan. 1, 2027, at the latest.

Work requirements apply only to those ages 19 to 64. Just 16% of Iowa Medicaid beneficiaries fall into that age group, Rupe said. Of that 16%, 77% work full- or part-time. “So you’re left with a percentage of a percentage of a percentage of people that don’t work,” she added.

The work requirement also has many exceptions, including for disability, enrollment in school, and caring for young children. Only a few people fit the profile, which some politicians have promoted, of a lazy Medicaid recipient lounging in a basement, Rupe said.

With so few unemployed beneficiaries who don’t fall under an exception, speakers said, the projected savings are impossible to achieve unless many eligible recipients also lose coverage.

Forum organizers taped enlargements of Iowa’s 23-page Medicaid application to a wall. “That application is about to get a whole lot more complicated,” Dillon said, because the law will require filing every six months instead of annually. Gathering income, employment and other information will be difficult for low-income families juggling multiple jobs and other demands. A federal judge halted Arkansas’s Medicaid work requirement, Dillon said, because thousands of eligible recipients lost coverage.

Enrolling in benefits is even more difficult now because Iowa has cut the number of Department of Health and Human Services offices in the state. Richard Johnson, a 30-year department employee who later became chief executive at River Hills Community Health Center in Ottumwa, said the 10 counties he formerly supervised now has just three offices. In-person interviews to help Iowans register for services now are handled by mail.

“So you see this application for Medicaid? People are expected to fill that out on their own and just send it in,” said Johnson, who recently retired as Ottumwa mayor. “You don’t get to see an income-maintenance worker. They process your application and if it’s not filled out correctly they send it back to you.”

Medicaid and ACA cuts will have consequences for rural hospitals and health care, Rupe said. The loss of resources is “going to gut us.”

“Medicaid, right now, is the primary funder of a majority of hospitals in Iowa,” Rupe said. “Hospitals are on the brink, and I say that lovingly, of disaster” as nearly half lost money in 2024. Twenty could lose emergency room or inpatient service. Fewer Medicaid patients mean less income, forcing some to close, Rupe said. That means longer drives for health care in many places — trips that those with lower incomes can’t afford.

It also means more clinics will close, Rupe said, such as MercyOne in Ottumwa, limiting access even for those with private health insurance. The closure will leave the city with just two physicians, Johnson said.

Emergency medical services also are suffering, said Jacob Dodds, former Henry County EMS director. The problems started in 2016, when Iowa moved its Medicaid system to for-profit managed care organizations. “Every time an ambulance rolled out the door, for every dollar it cost us to run on that call, we got reimbursed 17 cents. So we are taking a loss on every Medicaid patient,” he said.

Ambulances now also must transport more patients to distant facilities as local services fade, Dodds said. Henry County Health Center no longer has surgeons on 24-hour call, so emergency patients go sent elsewhere, sometimes hours away. “That also means that ambulance is no longer available to respond to 911 calls,” Dodds said. From 2016 until he left Henry County EMS in 2021, the number of patients transferred out increased 400%.

“That’s only going to continue to worsen” as rural hospitals close and reduce services like obstetrics, he added. And as fewer health care professionals serve rural areas, more chronic conditions will worsen, leasing to more ambulance trips to distant facilities.

State Sen. Janice Weiner, an Iowa City Democrat, said the legislature must pass a more than $200 million supplemental appropriation for Medicaid this year to offset the loss of COVID relief grants. Meanwhile, Iowa’s Medicaid administrator appears to be limiting what services the agency covers to cut costs, she said.

Forum spectators asked what they can do to resist Medicaid changes and help rural health care. Panelists urged them to vote. Weiner also said legislators heed emails, especially if constituents describe how legislation affects them personally. Letters to local newspapers also carry weight, she said.

Rupe said it’s vital to defend Medicaid, which serves one in seven Iowans and two out of five children.

“This isn’t some other people — Medicaid people that don’t really belong here,” she added. “These are people who live next door to you, who farm, who can’t afford insurance” and can’t get employer-paid health care. If they lose health care coverage, it will be a “huge addition to the medical burden in those rural areas where they’re least … able to access services.”