Healthcare Law Blog

When Safety Nets Fail Together: Medicaid Cuts, ACA Subsidies, and EMTALA

America’s healthcare system is often described as a patchwork: a mix of public programs, private insurance, and stopgap laws meant to catch people before they fall through the cracks. But what happens when several of those safety nets are weakened or removed all at once?

Right now, three major pillars of access to care are under pressure: Medicaid, Affordable Care Act (ACA) subsidies, and EMTALA – each plays a critical role in helping people afford and access healthcare. Together, they protect low and middle-income Kentuckians from disastrous financial consequences from healthcare expenses. However, if we weaken more than one at the same time, the result could be devastating.

Medicaid Reductions and the Impact on Rural Health Infrastructure

Medicaid currently provides health coverage to more than 1.2 million Kentuckians, including children, individuals with disabilities, and older adults. Under the proposed budget reconciliation legislation, formerly referred to as the “One Big, Beautiful Bill,” Kentucky stands to lose up to $28 billion in federal Medicaid funding over the next decade. These reductions would likely result in stricter eligibility criteria and decreased reimbursement rates for providers.

This is especially dangerous for rural communities, where many hospitals and clinics depend on Medicaid revenue to maintain operations. When Medicaid is cut, these facilities often struggle to remain open. When the only clinic or hospital in a community closes, patients are left with no local option for care, regardless of whether they’re covered by Medicaid, Medicare, private insurance, or if they have no insurance at all. These disruptions are associated with poorer health outcomes and increased long-term costs.

ACA Subsidy Expiration

The Affordable Care Act (ACA or “Obamacare”) provides premium subsidies to individuals who earn too much to qualify for Medicaid but cannot afford full-cost private insurance. In Kentucky, approximately 83,000 residents (representing 86 percent of those enrolled through the kynect marketplace) utilize these subsidies. Current legislation allows these subsidies to expire at the end of 2025. 

Without financial assistance, many working families may find health insurance unaffordable, resulting in a substantial increase in the uninsured population. If this occurs concurrently with Medicaid reductions, a significant portion of the population may be left without any feasible coverage options, further straining the healthcare system.

EMTALA

In June, the Trump administration rescinded guidance that reaffirmed hospitals’ obligation under the Emergency Medical Treatment and Labor Act (EMTALA) to provide health-saving and lifesaving abortion care to patients experiencing medical crises. EMTALA requires hospitals to provide “stabilizing treatment” in medical emergencies, including urgent situations that, until this recission, are resolved by terminating pregnancy, such as ectopic pregnancies and miscarriages. We wrote about developments in this area last summer.

Much as with the cuts and changes to other healthcare safety nets, the closure of healthcare facilities in areas already underserved by medical providers leads to limited options for patient choice of provider. If the only emergency department in a community chooses not to provide necessary pregnancy terminations in emergency situations pursuant to this guidance, patients will suffer with no other choice in provider. Until this change, EMTALA guaranteed medical care in emergency situations concerning reproductive healthcare. At the very least, this policy change will cause confusion for providers and, at worst, will lead to significant risk for inpatients seeking treatment for emergency reproductive care.

Furthermore, just as was the case before Kentucky expanded Medicaid in 2014, EMTALA is still the law for hospitals in emergency situations other than those involving abortion. When more patients had access to insurance via expanded Medicaid or ACA subsidies, hospitals were reimbursed for this emergency care. These same hospitals will still be required to treat these same patients pursuant to EMTALA, but if these patients are now uninsured, the hospital will not be paid.

Intersection and Risks of Access to Coverage

These policy changes are not isolated, and as with all areas within healthcare law, they are interconnected.

• Medicaid reductions contribute to increased rates of uninsurance and destabilize rural healthcare infrastructure.
• ACA subsidy expiration removes affordable coverage options for individuals ineligible for Medicaid.
• EMTALA requires hospitals that remain open to treat uninsured patients in emergency situations, subject to June’s policy change.

The end result is more Kentuckians without any healthcare coverage, fewer places to seek care, and greater financial risk for individuals and healthcare facilities alike.

Understanding how Medicaid, ACA subsidies, and EMTALA work together helps clarify the broader structure of healthcare access in Kentucky. Each plays a distinct role in supporting coverage, affordability, and protection from unexpected costs. When one is weakened, it puts additional strain on the others, and when all three are under pressure, the combined effect can significantly reduce access to care for millions of Kentuckians.

Healthcare is not defined by any single policy, but is shaped by how multiple laws, programs, and protections interact. When changes occur in one area, they can ripple across the entire system, affecting access, affordability, and provider sustainability. That’s why, in a constantly evolving regulatory landscape, it’s essential to consult with a knowledgeable healthcare attorney. McBrayer can help navigate the complexities, assess risks, and ensure compliance when the rules and their consequences are constantly shifting.

If you encounter legal issues or seek advice, reach out to a healthcare attorney at McBrayer who specializes in representing medical residents, fellows, and other health professionals.

Valerie Michael is an Associate in McBrayer's Lexington office. Ms. Michael focuses her area of practice on healthcare law, handling a wide variety of matters, such as healthcare professional licensure defense and compliance and regulatory issues. She also handles civil and criminal Medicare and Medicaid fraud cases, facility licensing, and certification. Ms. Michael can be reached at vmichael@mcbrayerfirm.com.