Sam Walker, 35, has severe autism and other disabilities. He is deaf and cannot speak. Sometimes when he’s frustrated, he hits himself or others.

Medicaid provides about $8,500 a month for health workers who visit his apartment in the basement of his parents’ home. The staffers help him with everyday tasks, including dressing, bathing, and eating. They also take Walker on outings, such as dining at restaurants, volunteering at Goodwill, and exercising at a recreation center or on park trails. They stick to a strict routine, which soothes him.

His parents say that without the in-home services, their son would need to move to a specialized residential facility in another state. Sending him away would break their hearts and cost taxpayers much more money. They strive to keep him home because they know change makes him anxious.

“The last thing I want is to put him into some kind of care facility, where he’ll just get kicked out,” said his mother, Leisa. The Iowa Department of Health and Human Services did not respond to Â鶹ŮÓÅ Health News’ questions about the Walkers’ case.

Federal Cuts Raise Pressure

Patient advocates say state administrators in Iowa appear to be reining in Medicaid spending by cutting what are known as home and community-based services for people with disabilities, and they’ve heard of multiple families facing battles like the Walkers’.

Disability rights advocates expect the pressure to intensify as states respond to reductions in federal Medicaid funding called for under the Trump administration’s signature tax and spending law, which passed last year.

June Klein-Bacon, CEO of the Brain Injury Association of Iowa, said the cuts and proposed rule changes appear to be part of a quiet attempt to save money in response to the state’s budget deficit and expected reductions in federal Medicaid funding.

Medicaid, jointly financed by the federal and state governments, covers people with low incomes or disabilities. Walker is one of served by “Medicaid waiver” programs, which pay for care that allows people with disabilities or who are at least 65 to live at home.

Unlike most parts of Medicaid, waiver programs are optional for states. Idaho’s governor noted that fact in January, when he suggested legislators consider cutting them. Disability rights groups fear other states will do the same. Leaders in , , and have considered such cuts this year.

Leisa Walker has heard Trump administration officials claim the national Medicaid cuts are intended to reduce waste, fraud, and abuse. That’s not how it will play out, she said. “These are real people, real families, and this causes real suffering when you do this to people,” she said. “It’s a very scary time.”

a private insurance company that manages Sam Walker’s Medicaid benefits, intends to cut his in-home care coverage by about $3,200 per month, his mother said. Company leaders told a judge they are following state officials’ direction, but they did not dispute Leisa Walker’s math.

Walker has been on the waiver program for three decades. It covers assistance from workers known as “direct service providers” — one of whom has been with him for 25 years. His parents receive no pay for the hours they spend caring for him when the aides aren’t working.

On a February morning, Leisa and Kent Walker drove an hour and a half to Des Moines for an appeal hearing. An administrative law judge sat behind a wooden desk in a conference room as the Walkers and their lawyer faced off against three representatives from Iowa Total Care, a subsidiary of the national insurer Centene Corp.

Leisa testified that her son is 6 feet tall and weighs 230 pounds. Although he knows some sign language, he has trouble communicating, she said. When he becomes frustrated or his routine is interrupted, he sometimes wails and hits himself or other people. “It’s devastating to watch,” she testified.

He’s not a bad person, she said. “He doesn’t understand how strong he is.”

She said her family would try to keep his main caregiver employed under the planned Medicaid reduction but would have to drop others who cover nights and weekends. She said no residential facility near their southern Iowa home could address her son’s complicated needs. She said a case manager told her that a Florida facility might be the closest one that could safely handle him.

Leisa Walker testified that the state’s Medicaid program would pay about $22,000 per month to put him in an institution, more than double what the program spends on his home care.

Sam Walker’s longtime psychiatrist, Christopher Okiishi, testified that Walker’s family and their support staff spent years developing a “fragile” but stable existence for him.

Lori Palm, a senior manager for Iowa Total Care, testified that Sam Walker gets about 16 hours of daily assistance financed by Medicaid. Palm said much of that time amounts to “supervision.” She said state officials recently advised her company that the program should pay mainly for “skill-building” time, not supervision.

The Walkers showed the judge a 2018 document in which a previous Iowa Medicaid director stipulated that supervision of people with disabilities is an allowable service for workers paid under the program.

Judge Rachel Morgan asked the Iowa Total Care representatives if the recent policy change was made in writing by the state Department of Health and Human Services. They said it was not and that they couldn’t specify who at the department had given them the new guidance.

The judge suggested during the hearing that for someone like Sam Walker, learning to regulate emotions could be an important form of skill-building. Three days later, the judge ruled in the Walkers’ favor, writing that the insurer’s attempt to cut care hours was improper. The insurer appealed the decision to the director of the Iowa Department of Health Human Services, who could overrule it. The dispute could eventually wind up in district court.

Iowa Total Care and the state Department of Health and Human Services did not respond to questions about the reports that many other Iowans with disabilities face reductions in care hours covered by Medicaid. Department spokesperson Danielle Sample said in an email that the agency supports home and community-based services, which, she noted, help “states save money by avoiding expensive long-term facility care.”

Spokespeople for the federal Department of Health and Human Services, which oversees Medicaid nationally, did not respond to a request for comment on the issue.

Medicaid waiver programs started in the 1980s, after President Ronald Reagan heard about an Iowa girl with a disability who was forced to live in a hospital for months because Medicaid wouldn’t pay for home care. The Republican president thought it was outrageous that the girl, had to live that way, even though home care would have been cheaper.

Members of Congress approved allowing states to use their Medicaid programs to pay for in-home care. But they made the change optional, to offer states flexibility and encourage innovation.

Designating such spending as optional “waiver programs” also made the change more politically palatable, said Kim Musheno, senior director of Medicaid policy for , which represents people with intellectual and developmental disabilities.

Prospects were much different for babies born with serious disabilities before the change, Musheno said. “Doctors instructed families to forget they existed, and to put them in an institution.”

Waivers Have Been Cut Before

All states have Medicaid waiver programs, but benefits and the number of people covered vary significantly. Applicants often wait months or years to get into the programs because of limited funding. More than 600,000 Americans were on waiting lists or “interest lists” for waiver services in 2025, , a health information nonprofit that includes Â鶹ŮÓÅ Health News.

Disability rights advocates and care providers have fought for decades to maintain funding for the programs, but a national leader said the threat feels especially severe now.

“When Medicaid is cut, people with disabilities are at the center of the impact,” said Barbara Merrill, CEO of the American Network of Community Outcomes and Resources, which represents agencies that care for people with intellectual disabilities or autism.

That’s what happened after Congress reduced Medicaid funding in 2011, according to a recent paper published by .

States could again rein in waiver programs by limiting enrollment, reducing covered services, or cutting pay for caregivers, who already are in short supply.

However, states that try to cut the in-home care programs could face legal challenges, Musheno said. The U.S. Supreme Court declared in 1999 that people with disabilities have a right to live outside of institutions if possible. The decision, in the case of , has been cited in lawsuits against states that fail to provide care options apart from nursing homes and similar facilities.

Several Iowans who belong to a Facebook group for Medicaid participants have posted in recent weeks that their families were notified of impending cuts in coverage of home care services for people with disabilities.

Sam Walker’s main caregiver, Andy Koettel, has worked with him since Walker was in fourth grade. Koettel, who works full-time, knows how to keep Walker calm in most situations and soothe him during a blowup. Their relationship took years to build, and it is a key reason Walker can continue to live at home with his parents, Koettel said.

“If I was not there, it would be incredibly difficult for all of them,” he said.

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The retiree, 70, was diagnosed with glaucoma in her right eye in 2019. She had a laser procedure to treat it in 2022, and she uses medicated drops in both eyes to prevent more damage. She is supposed to be checked regularly, she said.

During the May appointment, Tuszynski’s optometrist examined her eyes and reassured her that the glaucoma had not worsened.

Tuszynski, who lives in central Wisconsin, had looked up beforehand whether the clinic in nearby Madison participated in her insurance plan. The insurer’s website listed the optometrist’s name with a green check mark and the words “in-network.” She assumed that meant her policy would cover the appointment.

Then the bill came.

The Medical Procedure

An optometrist tested Tuszynski’s vision and took pictures of her optic nerves.

The Final Bill

$340, which included $120 for vision testing and $100 for optic nerve imaging.

The Billing Problem: Vision Coverage vs. Medical Coverage

Tuszynski’s UnitedHealthcare Medicare Advantage plan declined to pay for her eye appointment. “The member has no out of network benefits,” the company’s denial letter said.

Tuszynski felt like she was seeing double. How could an eye doctor be in-network and out-of-network at the same time? She said she sent the insurer a screenshot of its own webpage showing the clinic listed as in-network.

She said that after she complained, UnitedHealthcare representatives explained that the eye clinic was in-network under her vision plan, so her policy would cover the clinic’s services related to glasses or contact lenses. But they said the clinic was not in-network for her medical insurance plan, and glaucoma treatment is considered a medical issue.

Tuszynski was baffled that care for a patient’s eyes would not be covered by vision insurance. She said she didn’t realize that insurers can have contracts with eye clinics to provide some services but not others.

UnitedHealthcare spokesperson Meg Sergel said such arrangements are common, including with non-Medicare insurance provided by employers or purchased by individuals. “I looked up my eye doctor, and it’s the same thing,” she said in an interview with Â鶹ŮÓÅ Health News.

Sergel said she understood how a customer could mistakenly think vision insurance would cover all care for the eyes. She said UnitedHealthcare recommends that before undergoing treatment, patients ask care providers whether they are in-network for specific services.

Otherwise, she said, to know whether a test or treatment is covered by vision insurance, “you’d have to read the nitty-gritty” of a policy.

Leaders at Steinhauer Family Eye Clinic, where Tuszynski saw the optometrist, declined to comment.

Casey Schwarz, senior counsel for education and federal policy at the nonprofit , said such complications frequently come up when Medicare Advantage members try to use their insurance at eye clinics or dental offices.

The federal government pays insurers to run Medicare Advantage plans for people who choose them instead of traditional Medicare. More than half of Medicare beneficiaries . Many offer routine vision and dental coverage that isn’t included with traditional Medicare.

“We hear from people who choose these plans because of those supplemental benefits, but there is not a lot of transparency around them,” Schwarz said.

The Resolution

After receiving the rejection letter, Tuszynski repeatedly contacted UnitedHealthcare to question the decision and filed an appeal with the company. Then, she said, she called to complain to federal officials. She also wrote to Â鶹ŮÓÅ Health News, which asked the insurer about the case.

UnitedHealthcare eventually agreed to cover the bill as if the service had been in-network. “In good faith, we made an exception,” Sergel said. However, Tuszynski was warned that if she received medical care from the clinic again, it would not be covered, because the clinic remains out-of-network for such services, Sergel said. “It doesn’t sound like that pleased her.”

Tuszynski confirmed that she is not pleased.

She said she lost sleep over the dispute and felt that it shouldn’t have taken so much effort to obtain a fair outcome. “It’s just been a horrible, difficult whirlwind,” she said.

The Takeaway

Schwarz said regulators should require insurance companies to clearly explain to customers and care providers how different procedures and services will be covered under vision, dental, and health plans. “They’re tricky,” she said.

In an ideal world, Schwarz said, Medicare would consider things like dental cleanings, eye checkups, and hearing aids as basic health care that would be covered in the same way as other medical care. But until that happens, she said, patients with any doubt should call their insurers beforehand to check whether services will be covered.

Tricia Neuman, a senior vice president with Â鶹ŮÓÅ, a health information nonprofit that includes Â鶹ŮÓÅ Health News, noted that Medicare’s website that can help people determine whether their doctors participate in a Medicare Advantage plan.

“This is helpful and a step forward, but information about provider networks is not always correct,” Neuman said. “Errors can come at a cost to enrollees, unless they are willing and able to take on their insurer.”

Tuszynski worked for 30 years as a secretary in hospitals and at doctors’ offices, so she’s familiar with billing issues, she said. “If I can’t sort through all this, how can anybody else do it?”

She knows her $340 bill was much smaller than the medical debts many other people face. But she said it was a serious amount of money to her, and she was glad she objected to the insurer’s contention that the bill shouldn’t be covered.

“I have a strong feeling about right and wrong — and this is just wrong,” she said.

For 2026, she decided to shift out of her Medicare Advantage plan. She now is enrolled in traditional Medicare, plus a supplemental plan to help with copays and other costs. She pays $184 a month for that plan, compared with paying no separate premium for her old Medicare Advantage plan.

Now she won’t have to worry about private insurers’ limited networks of contracted care providers, she said. Her glaucoma treatment will be covered at the Madison eye clinic.

However, she no longer has insurance coverage for eyeglasses, just a discount plan if she buys glasses from certain stores. She used her Medicare Advantage insurance to buy new glasses shortly before switching. “Hopefully, those will last me a while,” she said.

Bill of the Month is a crowdsourced investigation by Â鶹ŮÓÅ Health NewsÌý²¹²Ô»åÌý that dissects and explains medical bills. Since 2018, this series has helped many patients and readers get their medical bills reduced, and it has been cited in statehouses, at the U.S. Capitol, and at the White House. Do you have a confusing or outrageous medical bill you want to share? Tell us about it!

Â鶹ŮÓÅ Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Â鶹ŮÓÅ—an independent source of health policy research, polling, and journalism. Learn more about .

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Most of the lawyers work either for the Department of Justice or for disability rights agencies that Congress set up in every state decades ago. Many of the Justice Department lawyers quit in 2025 after being reassigned to other duties, their supporters say. And Trump budget officials proposed deep cuts to federal grants supporting the state-based legal groups.

People with disabilities have the right to live in their communities if possible. Federal laws and court decisions say they may attend school, work jobs, and go to restaurants, movie theaters, and other public places. If they can find lawyers, they can file legal challenges when those rights are denied.

The federally funded attorneys quietly work to ensure the U.S. lives up to promises made by the Americans with Disabilities Act and other laws, said Alison Barkoff, a health law professor at George Washington University.

“I think many families of people with disabilities, or even many people with disabilities themselves, don’t hear about it until they Google, ‘Where can I get help?’” said Barkoff, who helped lead such efforts under Presidents Joe Biden and Barack Obama.

The attorneys’ goals include ensuring that people with disabilities have the services they need to live in their own homes, instead of having to move into nursing homes or other types of institutions, Barkoff said.

“These are people who, if these supports are ripped away, are going to have to leave their communities and their families, at a higher cost for taxpayers,” she said.

The state-based disability rights groups are known as “protection and advocacy” organizations. Most of them are nonprofit groups.

Congress approved the federally financed system in the 1970s after TV journalist Geraldo Rivera in a New York institution for people with mental and intellectual disabilities, revelations that ignited a national outcry.

President Donald Trump proposed cutting the system’s federal funding from $148 million to $69 million for fiscal year 2026, according to the National Disability Rights Network, which represents the state-based groups.

Appropriations committees in the U.S. House and Senate have recommended Congress maintain funding at the previous level. But advocates for the agencies worry that even if Congress maintains current support, the administration will try again to slash their support in future years. “It definitely would put people in our communities in harm’s way,” said Marlene Sallo, the national network’s executive director.

White House officials declined to comment on why the Trump administration proposed the deep cuts.

Isaac Schreier’s family can attest to the value of the state-based legal groups.

Isaac, 7, lives in Ankeny, Iowa. He has a rare condition called osteogenesis imperfecta, also known as brittle bone disease. The condition has caused about 60 bone fractures, including in his limbs, spine, and skull. It can cause intense pain and leave him unable to walk.

At times, Isaac’s disability is practically invisible, said his father, Jake Schreier. Unless he has recently suffered a broken leg bone, he walks well. “But he tires much more quickly than you or I would.”

Isaac’s doctor said he needed a special wheelchair that could be adjusted to put him in different positions depending on which bones were broken. But the private insurer that manages his Medicaid coverage declined to pay for the $3,500 wheelchair. “They required proof that it was a permanent and long-standing condition,” Jake Schreier said. “We were very frustrated.”

Schreier appealed the denial but lost. A nurse at a specialty clinic then recommended he reach out to Disability Rights Iowa, a federally funded protection and advocacy group that had helped other families in similar straits.

The group linked Schreier with two of its attorneys, who filed a new appeal. The lawyers wrote a detailed letter explaining why Isaac was legally entitled to the new wheelchair, and they cited specific Iowa codes and court precedents.

The insurer wound up paying for Isaac’s special wheelchair.

The chair allows Isaac to participate in school and community activities even when he has broken bones. “It’s absolutely night and day. I can’t imagine a world where we didn’t have it,” his father said.

Isaac may again need people like the disability rights lawyers to fight for him, so he won’t be shunted away from society, Schreier said. “We’re really trying to keep as many doors open as possible for him.”

The threat to the state-based groups’ funding comes as the more people with mental illness or addictions into institutions.

David Hutt, deputy executive director for legal services at the National Disability Rights Network, noted that the groups have legal authority to go into facilities where people with disabilities live, to check conditions and treatment. Those facilities include state institutions and privately owned nursing homes.

More Americans could wind up living in such settings if Trump succeeds in his quest to institutionalize people with mental illness who are living on the streets, Hutt said.

At the same time, states are facing cuts in federal contributions to Medicaid, the public health coverage program for people with low incomes or disabilities. In response, they may be tempted to reduce Medicaid coverage of , many of which are considered optional under federal law, Hutt said. If that happens, “you’re going to get increased institutionalization, which actually costs more,” he said.

Disability rights organizations often have stepped in when states failed to provide care and services that people with disabilities are entitled to. So have lawyers from the Justice Department’s civil rights division.

For example, Disability Rights Iowa filed a lawsuit in 2023 alleging the state failed to provide proper mental health resources for children on the Medicaid program. The state that advocates said could bring “radical change” to the system.

In 2021, the Justice Department that their lack of support for community services meant too many people with intellectual disabilities had to live in facilities. State officials vowed to do better.

Since Trump returned to office, many of the Justice Department’s most experienced disability rights lawyers have taken buyouts or been reassigned to other areas, said Jennifer Mathis, a former top administrator at the Justice Department under Biden. “There’s really skeleton staffing at this point,” said Mathis, now deputy director of , which advocates for rights of people with mental disabilities.

The overall civil rights division is down to about 300 people, fewer than half the number it had under Biden, Mathis said.

The civil rights division’s new director, Harmeet Dhillon, in April that more than 100 attorneys had left the division, but that they didn’t support Trump’s priorities. “The job here is to enforce the federal civil rights laws, not woke ideology,” she told Beck.

In a statement to Â鶹ŮÓÅ Health News, Dhillon said the division continues to be “a vocal and active advocate for Americans with disabilities.”

Dhillon noted the department recently over complaints that the ride-hailing service was turning away customers with service dogs or wheelchairs; has secured agreements with and to improve treatment of imprisoned people with disabilities; and over allegations of failing to provide proper accommodations for people with disabilities.

The department declined to comment on the record about the number of attorneys it has working on disability rights issues. However, “civil rights warriors,” including lawyers, to join the civil rights division.

Jake Schreier, the Iowa parent, hopes the issue will be worked out nationally. “I really can’t believe this is anything that would be partisan,” he said.

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An online search of his symptoms suggested he had a serious bacterial infection. Yoder drove the toddler from their home in the small town of Mechanicsburg, Ohio, to the Mercy Health hospital in nearby Urbana.

Staff in the emergency room there quickly confirmed that Darragh had scalded skin syndrome and said he needed to be taken by a private company’s ambulance to Dayton Children’s, a hospital about 40 miles away.

“I asked them: ‘Can I take him? Can I drive him?’” Yoder said. “And they were like, ‘Oh, absolutely not.’”

So, Yoder and her son got into the ambulance, with Darragh strapped in his car seat. The ambulance driver didn’t turn on the siren or drive particularly fast, Yoder said. The trip took about 40 minutes, she said. “It was fairly straightforward transportation from Point A to Point B.”

Yoder had heard that ambulance rides can be pricey. But she didn’t know how much her son’s ride would cost.

Darragh was hospitalized for three days and recovered from the illness.

Then the bill came.

The Medical Procedure

During the ride, the ambulance crew monitored Darragh’s vitals and an intravenous line, inserted at the hospital, carrying fluids and antibiotics, but he received no other medical treatment, Yoder said.

The Final Bill

$9,250, which included a “base rate” charge of $6,600 for a “specialty care transport” and a mileage fee of $2,340, calculated at $60 for each of the ride’s 39 miles. It also included $250 for use of an intravenous infusion pump and $60 for monitoring Darragh’s blood oxygen.

The Problem: No Insurance, Few Protections

The children’s hospital charged only about $3,000 more for the toddler’s three-day stay than the ambulance company charged for the ride, Yoder said.

Darragh’s family doesn’t have health insurance, leaving them on the hook for the full charges. Their income is a bit too high for them to qualify for Medicaid, the public health program that covers low-income residents, or for the Ohio Children’s Health Insurance Program, which covers moderate-income kids.

The Yoders belong to a Christian health care sharing ministry, with members paying into a fund that helps reimburse them for medical bills.

Unlike health insurance, such arrangements do not offer members negotiated rates with ambulance companies or other medical providers. And there are no state or federal billing protections that would help an uninsured patient in Ohio with a ground ambulance bill.

The federal No Surprises Act protects those with insurance from large bills for air ambulance transportation provided outside their insurers’ network agreements. But ground ambulance services aren’t covered by the law — and even if they were, that wouldn’t have helped the Yoders, since they didn’t have insurance.

Patricia Kelmar, the senior director of health care campaigns , a national advocacy group, said ambulance charges vary widely. She said she’s seen per-mile charges ranging from less than $30 to more than $80, as well as base rates that differ dramatically.

Some patients, such as those with traumatic injuries, need ambulances with highly trained staff and advanced medical equipment, Kelmar said, so it makes sense that those rides would be more expensive. But patients rarely are told what the ride will cost until they receive a bill.

Jennifer Robinson, a spokesperson for Mercy Health, said she couldn’t comment on a specific patient’s case but said the staff follows established medical standards. “When a patient requires a higher level of treatment, ambulance transfer between facilities is best practice to ensure appropriate care,” she said in an email to Â鶹ŮÓÅ Health News.

Kimberly Godden, a vice president for the ambulance company, Superior Ambulance Service, said a doctor at the first hospital requested a high-level transport for the patient, requiring specially trained staff.

“Our priority is always to ensure patients receive the highest-quality care when they need it most, and we respond to every call regardless of a patient’s ability to pay,” Godden said in an email. “Superior had the team and resources available to quickly and safely move the patient to the higher level of care they needed within the time frame set by the ordering physician.”

Godden said the company would offer a “charity care” rate to Yoder if the family qualified for it.

The Resolution

Yoder said she repeatedly discussed the bill with ambulance company representatives, including the option for charity care. They told Yoder the best deal they could offer was to reduce the total by about 40%, to $5,600, if the family paid it in a lump sum, she said.

After months of discussion, the family wound up agreeing to that deal, Yoder said. They put the charge on a new credit card, which gave them 17 months to pay it off with no interest.

They have agreed to payment plans with the two hospitals, which offered charity care discounts that dropped the bills to a total of about $6,800.

The Yoders expect the sharing ministry to reimburse them for about 75% of the payments they’re making to the hospitals and the ambulance service.

The Takeaway

Patients and their families should feel comfortable asking hospital staffers whether a recommended ambulance company is in their insurance network and how much the ride to another location will cost, said Kelmar, a national expert on such bills. “Shouldn’t the hospital know that?” she said. “I don’t think it’s that heavy of a lift.”

Kelmar said she doesn’t want to discourage people from taking an ambulance if a doctor says it’s necessary. Once consumers receive a bill for the service, she said, they often can negotiate the price down. It can help to look up what the ambulance service accepts as payment from government programs. Those rates are often much lower than the full-price charges patients see on a bill.

If the family had been covered by Ohio’s Medicaid program, the ambulance service would have been paid much less than it charged the Yoders. The public health program pays ambulance services for “specialty care transports,” plus $5.05 per mile. Those rates would have added up to $609.95 for the transportation part of Darragh’s ambulance ride.

Yoder said she wishes she had driven Darragh straight to the children’s hospital. If she had skipped the local ER, she said, they would have arrived at the bigger hospital sooner and she would have saved thousands of dollars.

But she didn’t feel as if she had a choice about putting her son in the ambulance, she said. The doctor told her it was necessary, and the hospital staff had already inserted an intravenous line. “I wasn’t going to pull out his IV line and just leave,” she said.

Yoder said she remains uninsured because she hasn’t seen any private insurance options that suit her family’s circumstances. No matter who pays the ambulance bill, she thinks the charges were much too high. She understands that patients can often negotiate discounts, she said, “but you shouldn’t have to work so hard for it.”

Bill of the Month is a crowdsourced investigation by Â鶹ŮÓÅ Health NewsÌý²¹²Ô»åÌý that dissects and explains medical bills. Since 2018, this series has helped many patients and readers get their medical bills reduced, and it has been cited in statehouses, at the U.S. Capitol, and at the White House. Do you have a confusing or outrageous medical bill you want to share? Tell us about it!

Â鶹ŮÓÅ Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Â鶹ŮÓÅ—an independent source of health policy research, polling, and journalism. Learn more about .

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This story can be republished for free (details).

The investigators allege that some insurers effectively set up “ghost networks” of psychologists, psychiatrists, and other mental health professionals who purportedly have agreed to treat patients covered by the publicly financed Medicare and Medicaid plans. In fact, many of those professionals do not have contracts with the plans, do not work at the locations listed, or are retired, the investigators said.

The Office of Inspector General for the Department of Health and Human Services, which oversees the giant Medicare and Medicaid health programs, released its findings

The report focuses on insurers the government pays to cover people in Medicare Advantage plans and in privately managed Medicaid plans. About 30% of all Americans are covered by such insurance, the report says. The government pays the insurers hundreds of billions of dollars annually.

The companies are paid set rates per person they cover and are allowed to keep whatever money they don’t spend on patient care. The insurers are required to have adequate numbers of health care professionals under contract to serve patients in each region they cover.

But the new report found that 55% of mental health professionals listed as in-network by Medicare Advantage plans were not providing such care to any of the plans’ members. The figure was 28% for Medicaid managed care plans.

Some mental health professionals told investigators they shouldn’t have been listed as in-network care providers for the insurers’ members, because they no longer worked at the locations listed or because they didn’t participate in the Medicare Advantage or Medicaid managed care plans. Others said they were working as administrators and no longer providing patient care.

In one case, the report says, a private Medicaid plan listed a mental health professional as providing care in 19 practice locations. But when the investigators checked, a receptionist at one of the clinics said the person had retired a few years ago.

Jeanine Simpkins of Mesa, Arizona, learned how skimpy the networks can be when a 40-year-old family member was in crisis this fall. Simpkins struggled to find a drug rehabilitation program that would accept the Medicare Advantage insurance the relative is on because of a disability.

Simpkins said she contacted about 20 rehab programs, none of which would take the Medicare insurance plan. “You feel kind of dropped,” she said. “I was pretty surprised, because I thought we had something good in place for her.”

Simpkins’ relative eventually enrolled in part-time hospital care instead of an inpatient rehabilitation center.

It can be challenging for patients to find timely, nearby care, for all kinds of health problems, from colds to cancer.

But Jodi Nudelman, a regional inspector general who helped write the federal report, said in an interview that the stakes can be especially high for patients seeking mental health care.

“They can be particularly vulnerable,” she said. It can be daunting for people to acknowledge they need such care, and any roadblock can discourage them from trying to find help, she said.

She added that taxpayers aren’t getting their money’s worth if insurers fail to meet obligations to provide sufficient care options for Medicare and Medicaid participants in the plans.

The federal report focused on a sample of 10 counties in five states: Arizona, Iowa, Ohio, Oregon, and Tennessee. It included urban and rural areas. It did not identify the insurers whose networks were checked.

Susan Reilly, vice president of communications for the Better Medicare Alliance, a trade group representing Medicare Advantage plans, said managed care companies support federal efforts to improve access to mental health services. “While this report looks at a small sample of plans, we agree there’s more work to do and are committed to continuing that progress together with policymakers,” she said in a statement.

The report’s authors said their sample was a good representation of the national situation. It looked at 40 Medicare Advantage plans and 20 Medicaid managed care plans.

The report recommends government administrators make more use of medical billing data to confirm whether health professionals listed as in-network are providing care to patients covered by private Medicare and Medicaid insurance plans.

The watchdogs also recommend that federal regulators create a national, searchable directory of mental health providers, listing which Medicare and Medicaid insurance plans each one accepts. Such a directory would help patients find care and would make it easier to double-check the accuracy of plans’ listings of in-network providers, they said.

Federal administrators overseeing Medicare and Medicaid have taken steps toward creating such a directory, the authors said. Reilly, the industry representative, said managed care companies support the effort.

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Sager, a Marine Corps and Army veteran, uses his VA coverage for non-VA treatment of back injuries stemming from his military service. But he said he sometimes must make several phone calls to obtain approval to see a local chiropractor. “It seems like it takes entirely too long,” he said.

Many veterans live hours from VA facilities, or they need health services that aren’t readily available from the VA. In such cases, the department is supposed to provide a referral and pay for private care. Critics say it often hesitates to do so.

Republicans controlling Congress aim to streamline the process of obtaining what is known as community care.

Two Republican senators have that would make it easier for rural veterans to seek care at local hospitals and clinics. The proposals would build on VA community care programs that started under Democratic President Barack Obama and were expanded in Trump’s first term.

Critics worry that steering veterans to private care facilities drains federal money from the VA hospital and clinic system. But supporters say veterans shouldn’t be forced to travel long distances or wait months for the treatment they could obtain at local hospitals and clinics.

“My main concern is for veterans, not for the VA,” Sen. Kevin Cramer (R-N.D.) told Â鶹ŮÓÅ Health News. “I don’t believe we have an obligation to sustain the bureaucracy.”

About 9 million veterans are enrolled in the VA health system. Last year, about 3 million of them — including 1.2 million rural veterans — used their benefits to cover care at non-VA facilities, according to data provided by the department.

Cramer that would allow veterans who live within 35 miles of a rural, “critical access” hospital to use VA benefits to cover care there or at affiliated clinics without referrals from VA staff.

Cramer, who serves on the Senate Veterans’ Affairs Committee, noted his state has just one VA hospital. It’s in Fargo, on the state’s eastern border, which is more than 400 miles by car from parts of western North Dakota.

Many North Dakota veterans drive past multiple community hospitals to get to the VA hospital for treatment, he said. Meanwhile, many rural hospitals are desperate for more patients and income. “I kept thinking to myself, ‘This doesn’t make any sense at all,’” Cramer said.

Cramer said previous laws, including the , made it easier for veterans to use their benefits to cover care at community hospitals and clinics.

But he said veterans still must fill out too much paperwork and obtain approval from VA staffers to use non-VA facilities.

“We can’t let the VA itself determine whether a veteran is qualified to receive local care,” he said.

U.S. Rep. Mark Takano of California, who is the top Democrat on the House Veterans’ Affairs Committee, said he sees the need for outside care for some veterans. But he contends Republicans are going overboard in shifting the department’s money to support private health care facilities.

The VA provides specialized care that responds to veterans’ needs and experiences, he argues.

“We must prevent funds from being siphoned away from veterans’ hospitals and clinics, or VA will crumble,” Takano said in a statement released by his office. “Veterans cannot afford for us to dismantle VA direct care in favor of shifting more care to the community.”

Some veterans’ advocacy groups have also expressed concerns.

Jon Retzer, deputy national legislative director for the Disabled American Veterans, said the group wants to make it easier for veterans to find care. Rural and female veterans can have a particularly tough time finding appropriate, timely services at VA hospitals and clinics, he said. But the Disabled American Veterans doesn’t want to see VA facilities weakened by having too much federal money diverted to private hospitals and clinics.

Retzer said it’s true that patients sometimes wait for VA care, but so do patients at many private hospitals and clinics. Most delays stem from staff shortages, he said, which afflict many health facilities. “This is a national crisis.”

Retzer said the Disabled American Veterans favors continuing to require referrals from VA physicians before veterans can seek VA-financed care elsewhere. “We want to ensure that the VA is the primary provider of that care,” he said.

Veterans Affairs Secretary Doug Collins to improve the community care program while maintaining the strength of the department’s hospitals and clinics. The department declined a Â鶹ŮÓÅ Health News request to interview Collins.

Marcus Lewis, CEO of First Care Health Center, which includes a hospital in Park River, North Dakota, supports Cramer’s bill. Lewis is a Navy veteran who uses the VA’s community care option to pay for treatment of a back injury stemming from his military service.

Overall, Lewis said, the community care program has become easier to use. But the application process remains complicated, and participants must repeatedly obtain VA referrals for treatment of chronic issues, he said. “It’s frustrating.”

Park River is a 1,400-person town about 50 miles south of the Canadian border. Its 14-bed hospital offers an array of services, including surgery, cancer care, and mental health treatment. But Lewis regularly sees a VA van picking up local veterans, some of whom travel 140 miles to Fargo for care they’re entitled to receive locally.

“I think a lot of folks just don’t want to fight the system,” he said. “They don’t want to go through the extra hoops, and so they’ll jump in the van, and they’ll ride along.”

Rep. Mike Bost (R-Ill.), chairman of the House Veterans’ Affairs Committee, said veterans in some areas of the country have had more trouble than others in getting VA approval for care from private clinics and hospitals.

Bost helped gain for Trump’s request for $34.7 billion for the community care program in 2026. Although spending on the program has gone up and down in recent years, the appropriation represents an increase of about 50% from what it was in 2025 and 2022. The Senate included similar figures for next year in its version of a military spending budget that

Bost also co-sponsored that would spell out requirements for the VA to pay for community care.

Sager hopes the new proposals make life easier for veterans. The Gulf War veteran lives in the northeastern Iowa town of Denver. He travels about 15 miles to Waterloo to see a chiropractor, who treats him for back and shoulder pain from injuries he suffered while training Saudi troops in hand-to-hand combat.

Sager, who remains active in the Army Reserve, also visits a Waterloo outpatient clinic run by the VA, where his primary care doctor practices. He appreciates the agency’s mission, including its employment of many veterans. “You just feel like you’re being taken care of by your own,” he said.

He believes the VA can run a strong hospital and clinic system while offering alternatives for veterans who live far from those facilities or who need care the VA can’t promptly provide.

The local VA doesn’t offer chiropractic care, so it pays for Sager to visit the private clinic. But every few months, he needs to obtain fresh approval from the VA. That often requires several phone calls, he said.

Sager is one of about a dozen veterans who use the community care program to pay for visits at Vanderloo Chiropractic Clinic, office manager Linda Gill said.

Gill said the VA program pays about $34 for a typical visit, which is comparable to private insurance, but the paperwork is more burdensome. She said leaders of the chiropractic practice considered pulling out of the VA program but decided to put up with the hassles for a good cause. She wishes veterans didn’t have to jump through so many hoops to obtain convenient care.

“After what they’ve done for us? Please,” she said.

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The first was choosing to temporarily forgo health insurance when she was laid off from her job.

The second was screaming when a wild bat later landed on her face.

The bizarre encounter happened last August, while the Massachusetts resident was photographing the night sky during a vacation at the Glen Canyon National Recreation Area in Arizona. Kahn, now 33, noticed a few bats flying around but didn’t worry about them — until one flew up to her and got tangled between her camera and her face.

She screamed, and part of the bat went in her mouth. She doesn’t know which part or for how long, though she estimates it was only a few seconds. “It seemed longer,” she said.

The bat flew away, leaving Kahn shaken.

She didn’t think the animal had bitten her. Regardless, her father, who is a physician and was traveling with her, said she should go to a hospital within a day or so and begin vaccinations against rabies.

Figuring she would be covered as long as she obtained insurance before going to the hospital, Kahn said, she found a policy online the day after the bat incident. She said she called the company before she bought its policy and was told services related to an accident or “life-threatening” emergency would be covered.

Kahn went the next day to a hospital in Flagstaff, Arizona, where she started rabies prevention treatment. Over the next two weeks, she received the rest of the rabies shots at clinics in Arizona and Massachusetts and at a hospital in Colorado.

Then the bills came.

The Medical Procedure

Kahn received a total of four doses of the rabies vaccine. The doses are administered over the course of 14 days. Along with her first vaccination, she received three shots of immunoglobulin, which boosts antibodies against the virus.

Rabies is typically transmitted through bites or scratches from an infected animal. Experts when a person has been potentially exposed to rabies, because once the neurological disease causes symptoms, . The Centers for Disease Control and Prevention says postexposure rabies treatment has reduced the number of human fatalities to fewer than 10 a year in the U.S.

The Final Bill

According to explanation-of-benefits statements, Kahn owed a total of $20,749 for her care at the four facilities. Most of the charges were from the hospital where she was first treated, Flagstaff Medical Center: $17,079, including $15,242 for the rabies and immunoglobulin shots.

The Billing Problem: Most Insurance Doesn’t Start Immediately

Kahn’s policy did not pay for any of the services. “The required waiting period for this service has not been met,” said an explanation-of-benefits letter she received in December.

Kahn was stunned. “I thought it must have been a mistake,” she said. “I guess I was naive.”

When Kahn was laid off from her job as a biomedical engineer last summer, she had the option to temporarily stay on her former employer’s insurance under a COBRA plan, at a cost of about $650 a month. But as a young, healthy person, she gambled that she could get by without insurance until she found another job. She figured that if she needed medical care, she could quickly buy a private policy.

According to the Centers for Medicare & Medicaid Services, those who qualify for COBRA must be given to sign up — and if they do, the coverage applies retroactively. Kahn, who was still within that period at the time of the incident, said recently that she did not realize she had that option.

The policy she purchased after the bat episode, which cost about $311 a month, was from a Florida company called Innovative Partners LP. Documents Kahn provided to Â鶹ŮÓÅ Health News say the policy has a 30-day waiting period, which “does not apply to benefits regarding an accident or loss of life.”

Kahn said that after receiving notice that her claims were denied, she called the company to ask how she could appeal and was told a doctor would have to file paperwork. She said she wrote a letter that was signed by a doctor at Flagstaff Medical Center and submitted it in March but was unable to reach doctors at the other facilities.

Kahn said she was given conflicting answers about where to send the paperwork. She said a representative with the company recently told her it had not received any appeals from her.

Benefits statements Kahn received in early July show Innovative Partners had not paid the claims. The company did not respond to requests for comment for this article.

Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University, said most health coverage plans take effect on the first day of the month after a customer enrolls.

“The insurance companies — for good reason — don’t want people to wait to sign up for coverage until they are sick,” she said, noting the premiums healthy people pay help balance the costs of paying for health care.

The Affordable Care Act requires insurers to cover , such as diabetes or heart issues. But that doesn’t mean they have to pay for treatment of an injury sustained shortly before a person enrolls in coverage, she said.

Corlette, who reviewed a brief benefits overview provided by Kahn, said the policy appears to have been a limited, , which would pay only set amounts toward treatments per day or other period regardless of total expenses incurred. Such plans have been around for decades and aren’t required to meet ACA standards, she said.

But she said even if Kahn had bought comprehensive health insurance, it probably wouldn’t have covered treatment received so soon after she purchased it.

David Shlim, a travel medicine specialist in Wyoming who studies rabies, said Kahn made the right choice by promptly seeking treatment, even though she didn’t feel the bat bite her. The disease is deadly, and the fact that the bat went into her mouth meant she could have been infected from its saliva, he said: “You could hardly have a more direct exposure than that.”

Shlim, who recently co-wrote , added that  healthy bats don’t normally fly into people, as the one in this case did. The animal’s entanglement with Kahn suggests it could have been sick, possibly with rabies, he said.

Rabies prevention treatment is much more expensive in the United States than in most other countries, Shlim said. The priciest part is immunoglobulin, which is made from the blood plasma of people who have been vaccinated against rabies.

The treatment is often administered in hospital emergency rooms, which add their own steep charges, Shlim noted.

The Resolution

Kahn said she is employed again and has good health insurance but is still facing most of the bills from her misadventure at Glen Canyon. She said she paid a doctor bill from Flagstaff Medical Center after negotiating it down from $706 to $420. She said she’s also arranged a $10-a-month plan to pay off the $530 she owes for one of her rabies shots at another facility.

She said she plans to continue appealing the denials of payment for the rest of the bills, which total more than $19,000.

In a statement on behalf of the Flagstaff hospital — where Kahn incurred the highest charges — Lauren Silverstein, a spokesperson at Northern Arizona Healthcare, said the health system does what it can to limit costs. “We have less ability to control the prices of critical supplies that we use to treat patients, including pharmaceuticals, biologics, diagnostics and medical devices made by other companies,” she said.

Silverstein said the hospital needs to keep immunoglobulin on hand to prevent rabies, even though such cases are relatively rare and the drug is expensive.

The Takeaway

COBRA insurance policies, named for the Consolidated Omnibus Budget Reconciliation Act of 1985, enable many people who lose job-based coverage to pay to stay on those plans temporarily. There is a 60-day window to choose COBRA coverage, and once a beneficiary pays for it, the coverage — meaning that medical care is covered even if it occurred when the person was uninsured.

Corlette said Kahn’s predicament illustrates why people need to make sure they have health insurance.

She said people who lose employer-based coverage should consider enrolling in individual insurance plans sold on federal or state marketplaces. Many people who buy such policies qualify for substantial ACA subsidies to help pay premiums and other costs.

“If you are losing your job, COBRA is not your only option,” Corlette said.

Kahn wishes she had signed up for insurance coverage when she was laid off, even though she felt confident she would find another job within a few months. “That’s a very big lesson I learned the hard way,” she said.

Her wildlife encounter did not destroy her love of the outdoors. She even sees humor in it.

“I know what bats taste like now. It’s an earthy, sweet kind of flavor,” she joked. “It’s actually a pretty funny story — if it weren’t for the horrible medical bill that came with it.”

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Keeping that promise could soon get tougher if Congress slashes Medicaid funding. The joint federal-state health program covers an unusually large share of mental health patients, and hospital industry leaders say spending cuts could accelerate a decades-long wave of psychiatric unit closures.

At least eight other Iowa hospitals have stopped offering inpatient mental health care since 2007, forcing people in crisis to seek help in distant facilities. Spencer Hospital is one of the smallest in Iowa still offering the service.

CEO Brenda Tiefenthaler said 40% of her hospital’s psychiatric inpatients are covered by Medicaid, compared with about 12% of all inpatients. An additional 10% of the hospital’s psychiatric inpatients are uninsured. National experts say such disparities are common.

Tiefenthaler vows to keep her nonprofit hospital’s 14-bed psychiatric unit open, even though it loses $2 million per year. That’s a significant loss for an organization with of about $120 million. But the people who use the psychiatric unit need medical care, “just like people who have chest pains,” Tiefenthaler said.

Medicaid covers health care for about 72 million Americans with low incomes or disabilities. Tiefenthaler predicts that if some of them are kicked off the program and left without insurance coverage, more people would delay treatment for mental health problems until their lives spin out of control.

“Then they’re going to enter through the emergency room when they’re in a crisis,” she said. “That’s not really a solution to what we have going on in our country.”

Republican congressional leaders have vowed to protect Medicaid for people who need it, but they also have called for billions of dollars in cuts to areas of the federal budget that include the program.

The U.S. already faces a deep shortage of inpatient mental health services, many of which were reduced or eliminated by private hospitals and public institutions, said Jennifer Snow, director of government relations and policy for the National Alliance on Mental Illness. At the same time, the number of people experiencing mental problems .

“I don’t even want to think about how much worse it could get,” she said.

The American Hospital Association estimates nearly 100 U.S. hospitals have shuttered their inpatient mental health services in the past decade.

Such closures are often attributed to mental health services being more likely to lose money than many other types of health care. “I’m not blaming the hospitals,” Snow said. “They need to keep their doors open.”

Medicaid generally pays hospitals lower rates for services than they receive from private insurance or from Medicare, the federal program that mostly covers people 65 or older. And Medicaid recipients are particularly likely to need mental health care. More than a third of nonelderly Medicaid enrollees have some sort of mental illness, a nonprofit health policy organization that includes Â鶹ŮÓÅ Health News. of mental illness among nonelderly Medicaid recipients, at 51%.

As of February, just 20 of Iowa’s 116 community hospitals had inpatient psychiatric units, according to . Iowa also has four freestanding mental hospitals, including two run by the state.

Iowa, with 3.2 million residents, has a total of about 760 inpatient mental health beds that are staffed to care for patients, the state reports. The Treatment Advocacy Center, a national group seeking improved mental health care, says the “absolute minimum” of such beds would translate to about 960 for Iowa’s population, and the optimal number would be about 1,920.

Most of Iowa’s psychiatric beds are in metro areas, and it can take several days for a slot to come open. In the meantime, patients routinely wait in emergency departments.

Sheriff’s deputies often are assigned to transport patients to available facilities when treatment is court-ordered.

“It’s not uncommon for us to drive five or six hours,” said Clay County Sheriff Chris Raveling, whose northwestern Iowa county includes Spencer, a city of 11,000 people.

He said Spencer Hospital’s mental health unit often is too full to accept new patients and, like many such facilities, it declines to take patients who are violent or charged with crimes.

The result is that people are held in jail on minor charges stemming from their mental illnesses or addictions, the sheriff said. “They really shouldn’t be in jail,” he said. “Did they commit a crime? Yes. But I don’t think they did it on purpose.”

Raveling said authorities in many cases decide to hold people in jail so they don’t hurt themselves or others while awaiting treatment. He has seen the problems worsen in his 25 years in law enforcement.

Most people with mental health issues can be treated as outpatients, but many of those services also depend heavily on Medicaid and could be vulnerable to budget cuts.

Jon Ulven, a psychologist who practices in Moorhead, Minnesota, and neighboring Fargo, North Dakota, said he’s particularly worried about patients who develop psychosis, which often begins in the teenage years or early adulthood. If they’re started right away on medication and therapy, “we can have a dramatic influence on that person for the rest of their life,” he said. But if treatment is delayed, their symptoms often become harder to reverse.

Ulven, who helps oversee mental health services in his region for the multistate Sanford Health system, said he’s also concerned about people with other mental health challenges, including depression. He noted published in 2022 that showed suicide rates rose faster in states that declined to expand their Medicaid programs than in states that agreed to expand their programs to cover more low-income adults. If Medicaid rolls are reduced again, he said, more people would be uninsured and fewer services would be available. That could lead to more suicides.

Nationally, Medicaid covered nearly 41% of psychiatric inpatients cared for in 2024 by a sample of 680 hospitals, according to an analysis done for Â鶹ŮÓÅ Health News by the financial consulting company Strata. In contrast, just 13% of inpatients in those hospitals’ cancer programs and 9% of inpatients in their cardiac programs were covered by Medicaid.

If Medicaid participants have mental crises after losing their coverage, hospitals or clinics would have to treat many of them for little or no payment. “These are not wealthy people. They don’t have a lot of assets,” said Steve Wasson, Strata’s chief data and intelligence officer. Even though Medicaid pays hospitals relatively low rates, he said, “it’s better than nothing.”

Birthing units, which also have been plagued by closures, face similar challenges. In the Strata sample, 37% of those units’ patients were on Medicaid in 2024.

Spencer Hospital, which has a total of 63 inpatient beds, has maintained both its birthing unit and its psychiatric unit, and its leaders plan to keep them open. Amid a critical shortage of mental health professionals, it employs two psychiatric nurse practitioners and two psychiatrists, including one providing care via video from North Carolina.

Local resident David Jacobsen appreciates the hospital’s efforts to preserve services. His son Alex was assisted by the facility’s mental health professionals during years of struggles before he died by suicide in 2020.

David Jacobsen knows how reliant such services are on Medicaid, and he worries that more hospitals will curtail mental health offerings if national leaders cut the program. “They’re hurting the people who need help the most,” he said.

People on Medicaid aren’t the only ones affected when hospitals reduce services or close treatment units. Everyone in the community loses access to care.

Alex Jacobsen’s family saw how common the need is. “If we can learn anything from my Alex,” one of his sisters wrote in , “it’s that mental illness is real, it doesn’t discriminate, and it takes some of the best people down in its ugly swirling drain.”

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“Which is it? Do you want us to work or not?” he said.

Mecham, 31, relies on the public insurance program to pay for services that help him live on his own despite a disability caused by muscular dystrophy. He uses a wheelchair to get around and a portable ventilator to breathe.

A paid assistant stays with Mecham at night. Then a home health aide comes in the morning to help him get out of bed, go to the bathroom, shower, and get dressed for work at his online marketing business. Without the assistance, he would have to shutter his company and move into a nursing home, he said.

Private health insurance plans generally do not cover such support services, so he relies on Medicaid, which is jointly financed by federal and state governments and covers millions of Americans who have low incomes or disabilities.

Like most other states, Iowa has a Medicaid “buy-in program,” which allows people with disabilities to join Medicaid even if their incomes are a bit higher than would typically be permitted. About two-thirds of such programs charge premiums, and on how much money participants can earn and save.

Some states have raised or eliminated such financial caps for people with disabilities. Mecham has repeatedly traveled to the Iowa Capitol to lobby legislators to follow those states’ lead. The “” bill would remove income and asset caps and instead require Iowans with disabilities to pay 6% of their incomes as premiums to remain in Medicaid. Those fees would be waived if participants pay premiums for employer-based health insurance, which would help cover standard medical care.

Disability rights advocates say income and asset caps for Medicaid buy-in programs can prevent participants from working full time or accepting promotions. “It’s a trap — a poverty trap,” said Stephen Lieberman, a policy director for the United Spinal Association, .

Lawmakers in Florida, Hawaii, Indiana, Iowa, Maine, Mississippi, and New Jersey have introduced bills to address the issue this year, according to the National Conference of State Legislatures.

Several other states have raised or eliminated their program’s income and asset caps. Iowa’s proposal is modeled on a passed last year, said , a Democratic state representative from Council Bluffs. Turek, who is promoting the Iowa bill, uses a wheelchair and earned two gold medals as a member of the U.S. Paralympics basketball team.

Proponents say allowing people with disabilities to earn more money and still qualify for Medicaid would help ease persistent worker shortages, including in rural areas where the working-age population is shrinking.

Turek believes now is a good time to seek expanded employment rights for people with disabilities, since Republicans who control the state and federal governments have been touting the value of holding a job. “That’s the trumpet I’ve been blowing,” he said with a smile.

The Iowa Legislature to require many nondisabled Medicaid recipients to work or to document why they can’t. Opponents say most Medicaid recipients who can work already do so, and the critics say work requirements add red tape that is expensive to administer and could lead Medicaid recipients to lose their coverage over paperwork issues.

Iowa Gov. Kim Reynolds has made Medicaid work requirements a priority this year. “If you can work, you should. It’s common sense and good policy,” the Republican governor told legislators in January in her “.” “Getting back to work can be a lifeline to stability and self-sufficiency.”

Her office did not respond to Â鶹ŮÓÅ Health News’ queries about whether Reynolds supports eliminating income and asset caps for Iowa’s buy-in program, known as

National disability rights activists say income and asset caps on Medicaid buy-in programs discourage couples from marrying or even pressure them to split up if one or both partners have disabilities. That’s because in many states a spouse’s income and assets are counted when determining eligibility.

In Iowa, for example, the monthly net income cap is $3,138 for a single person and $4,259 for a couple.

Iowa’s current asset cap for a single person in the Medicaid buy-in plan is $12,000. For a couple, that cap rises only to $13,000. Countable assets include investments, bank accounts, and other things that could be easily converted to cash, but not a primary home, vehicle, or household furnishings.

“You have couples who have been married for decades who have to go through what we call a ‘Medicaid divorce,’ just to get access to these supports and services that cannot be covered in any other way,” said Maria Town, president of the American Association of People with Disabilities.

Town said some states, including Massachusetts, have removed income caps for people with disabilities who want to join Medicaid. She said the cost of adding such people to the program is at least partially offset by the premiums they pay for coverage and the increased taxes they contribute because they are allowed to work more hours. “I don’t think it has to be expensive” for the state and federal governments, she said.

Congress has considered to allow people with disabilities to work more hours without losing their Social Security disability benefits, but that bill has not advanced.

Although most states have Medicaid buy-in programs, enrollment is relatively low, said Alice Burns, a Medicaid analyst at Â鶹ŮÓÅ, a health information nonprofit that includes Â鶹ŮÓÅ Health News.

Fewer than 200,000 people nationwide are covered under the options, Burns said. “Awareness of these programs is really limited,” she said, and the income limits and paperwork can dissuade potential participants.

In states that charge premiums for Medicaid buy-in programs, monthly fees can range from $10 to 10% of a person’s income, according to of 2022 data.

The Iowa proposal to remove income and asset caps has drawn bipartisan backing from legislators, including a of approval from the House Health and Human Services Committee. “This aligns with things both parties are aiming to do,” said state Rep. Carter Nordman, a Republican who chaired a subcommittee meeting on the bill. Nordman said he supports the idea but wants to see an official estimate of how much it would cost the state to let more people with disabilities participate in the Medicaid buy-in program.

Mecham, the citizen activist lobbying for the Iowa bill, said he hopes it allows him to expand his online marketing and graphic design business, “.”

On a recent morning, health aide Courtnie Imler visited Mecham’s modest house in Pleasantville, a town of about 1,700 people in an agricultural region of central Iowa. Imler chatted with Mecham while she used a hoist to lift him out of his wheelchair and onto the toilet. Then she cleaned him up, brushed his hair, and helped him put on jeans and a John Deere T-shirt. She poured him a cup of coffee and put a straw in it so he could drink it on his own, swept the kitchen floor, and wiped the counters. After about an hour, she said goodbye.

After getting cleaned up and dressed, Mecham rolled his motorized wheelchair over to his plain wooden desk, fired up his computer, and began working on a social media video for a client promoting a book. He scrolled back and forth through footage of an interview she’d done, so he could pick the best clip to post online. He also shoots video, takes photos, and writes advertising copy.

Mecham loves feeling productive, and he figures he could work at least twice as many hours if not for the risk of losing Medicaid coverage. He said he’s allowed to make a bit more money than Iowa Medicaid’s standard limit because he signed up for a under which he eventually expects to work his way off Social Security disability payments.

There are several such options for people with disabilities, but they all involve complicated paperwork and frequent reports, he said. “This is such a convoluted system that I have to navigate to build any kind of life for myself,” he said. Many people with disabilities are intimidated by the rules, so they don’t apply, he said. “If you get it wrong, you lose the health care your life depends on.”

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The amounts represent what Medicaid spent covering the residents’ care when they lived at the Glenwood Resource Center, a state-run facility that closed last summer.

The bills are extraordinary examples of a practice called Medicaid estate recovery. Federal law requires states to try to collect money after some types of Medicaid recipients die. The point is to encourage people to use their own resources before relying on the public program. But some states, including Iowa, are particularly aggressive about the collections, .

Joy Higgins was stunned by a letter she received a few weeks after her 41-year-old daughter, Kristin, died last May. The letter was written on Iowa Department of Health and Human Services stationery. At the top, in bold letters, it said, “Re: Kristin Higgins.”

“Dear Joy Higgins,” the letter read. “Our sincere condolences to you, as we understand the above person is deceased.”

The letter explained that any money Kristin Higgins left behind would have to be remitted to the state to help repay Medicaid $4,263,148.67. Her family had 30 days to respond.

Joy Higgins, who lives in Council Bluffs, wonders why state debt collectors would send a massive bill to the family of someone like her daughter, who had little income because of a severe developmental disability stemming from a premature birth.

“What are they gaining? That’s my question. Except for kicking someone in the face right after they lost a loved one?” Higgins said.

Kristin Higgins’ only income was a Social Security disability benefit of $1,105 monthly. Most of that went directly to the state institution, where she lived for more than 30 years. Just $50 was set aside monthly as an allowance for personal expenses, according to a state ledger obtained by her family. “They knew exactly how much she had,” her mother said.

When she died, Kristin’s personal account had a balance of $2,239.84. The family put that money toward her funeral, an allowed expense. Nothing was left for the state to take. Higgins said receiving the letter was traumatic even though the family didn’t have to pay the Medicaid bill.

The Higginses have heard about similar attempts to collect from other families, including that of who died in 2020 at age 29 after spending most of his life at the Glenwood Resource Center.

Shortly after his death, the Tomlyn family received a Medicaid bill of more than $4.2 million. His mother, Susan Tomlyn, was shocked by the letter. “I was like, ‘What? What? Oh my God,’” she recalled.

She filled out a form explaining that the small balance in her son’s personal account had gone toward his funeral. “That’s the last I heard of it,” Tomlyn said.

say the rules encourage people to pay for their own care before applying for Medicaid, which is mainly intended to help those with little money.

Critics of estate recovery programs say they often target families with little to give. Wealthier families tend to have lawyers who can structure estates in ways that avoid Medicaid repayment demands, the critics note.

Like Higgins, Tomlyn thought her Medicaid recovery bill came from state officials because it was printed on letterhead from the Iowa Department of Health and Human Services. The people who signed the letters identified themselves as being from the “Estate Recovery Program.” But the people who produce such letters work for private contractors hired to collect Medicaid debts, according to Alex Murphy, a spokesperson for the state agency. Their contract requires them to use state stationery.

Murphy said in an email to Â鶹ŮÓÅ Health News that such letters are sent after every death of an Iowa Medicaid recipient who was at least 55 years old or who lived in a long-term care facility. He said the letters “request information from family members regarding the deceased person’s assets and expenses,” and the letters note that repayments are expected only from the person’s estate.

Iowa’s Medicaid collections are handled by Sumo Group, a Des Moines company. Its director, Ben Chatman, declined to answer questions, including why the company sent bills to families of people with disabilities who lived most of their lives in state institutions. “I don’t do media relations,” Chatman said.

Sumo Group is a subcontractor of a national company, Gainwell Technologies, which has handled Medicaid collections for several states. In Iowa, the company is paid 11% of whatever it can collect from the estates of Medicaid participants. A spokesperson for Gainwell declined to comment.

Iowa’s Medicaid estate recovery program brought in $40.2 million in the fiscal year that ended last June, up nearly 14% from two years earlier, state records show. That total represents a sliver of the state’s total Medicaid budget, which is expected to hit $9 billion this year.

Nearly two-thirds of Iowa estate recovery cases wound up being closed with no collection of money last fiscal year, according to the state. In cases in which money was recouped, the average amount paid was about $10,000.

Thirty-five Iowa families were granted hardship waivers, which the state allows if an heir’s health or life would be endangered because payment of the Medicaid bill would deprive them of food, clothing, shelter, or medical care. Officials denied an additional 20 requests for hardship waivers.

estimated states collected more than $700 million annually from Medicaid participants’ estates. That money is shared with the federal government, which helps finance Medicaid. Some states claw back much less than others. Hawaii, for example, collected just $31,000 in 2019, the latest year analyzed in the federal report. Iowa, with about twice as many residents as Hawaii, raked back more than $26 million that year.

Americans aren’t subject to such clawbacks for using any other federal health program, including Medicare, which covers older people of all income levels.

The national group Justice in Aging has helped lead opposition to Medicaid estate recovery programs. Eric Carlson, a California attorney for the group, said the issue usually comes into play after the death of a person who had nursing home care covered by Medicaid. Recovery demands often force survivors to sell homes that are their families’ main form of wealth, he said.

Carlson said he hadn’t previously heard of Medicaid estate recovery bills topping $4 million, like the ones sent to survivors of the two Iowans with disabilities.

He wondered why debt collectors would pursue such cases, which are unlikely to yield any money but could cause anxiety for families. “Of course, if you open up a piece of mail that says you owe millions of dollars, you’re going to think the worst,” he said.

Carlson said he would advise anyone who receives such a letter to respond to it with documentation showing that their loved one’s estate can’t repay a Medicaid debt. “It’s never a good idea to ignore it,” he said. Failure to respond to the bill could lead to continued collection efforts, which could threaten a family member’s finances or property, he said.

Some states have reined in their Medicaid clawback efforts. For example, Massachusetts legislators last year . This was the second time Massachusetts reduced its Medicaid estate recovery effort, which once was one of the most aggressive in the U.S.

Critics in Congress have also tried to limit the practice.

Rep. Jan Schakowsky (D-Ill.) has twice introduced bills to eliminate the federal requirement that states claw back Medicaid spending from recipients’ estates. gained 47 Democratic co-sponsors, but it received no support from the Republicans controlling the chamber, and there was no similar bill in the Senate. She plans to try again this year, even though her party remains in the minority.

Schakowsky said in an interview that she’d never heard of Medicaid estate recovery demands reaching millions of dollars, as the Iowa families faced. But demands for hundreds of thousands of dollars are common. For many families, “that’s still impossible” to meet, she said.

Schakowsky hopes that members of Congress from both parties will agree to curtail the program once they realize how much angst it causes their constituents and how relatively little money it returns to the government. “The whole program is ridiculous,” she said.

Her quest could become even tougher if the Trump administration moves ahead with proposals to trim Medicaid spending.

The office of Sen. Chuck Grassley, who is the senior member of Iowa’s all-Republican congressional delegation and has taken leading roles in many health policy debates, declined to comment on the issue.

The Iowa Department of Health and Human Services said it notifies families about the estate recovery process when they apply for Medicaid. Joy Higgins said she doesn’t recall seeing such a notice.

The institution where Kristin Higgins spent most of her life was closed last year after federal officials investigated complaints of poor medical care. But Joy Higgins said her daughter was treated well there overall. “If I had millions in the bank, I’d give it to the state,” she said. “I would. It was worth it.”

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