• Cuts to Medicaid spelled out in the ‘big, beautiful bill’ will disproportionately hurt rural hospitals
  • As hospitals cut services, they’ll likely need to transport more patients to bigger facilities that still offer those services
  • Federal law from 2022 prohibits charging patients more than what insurance will pay for helicopter rides, meaning some choppers run at a financial loss

Colliding federal policies mean more rural Michiganders may soon need medical helicopter rides at the same time there’s less money to pay for those trips.

President Donald Trump’s One Big, Beautiful Act, which became law last year, funds tax cuts and an immigration crackdown in part by cutting Medicaid. Experts say that’ll disproportionately hurt rural hospitals whose communities tend to be poorer and rely more on the federal health insurance program. 

Experts say that will mean fewer services at rural hospitals that already send hundreds of patients a year to bigger facilities for critical care. When time is of the essence, those transfers happen via helicopter rides that can cost tens of thousands of dollars per trip. 

At the same time, 2022’s federal No Surprises Act prohibits air ambulance firms from charging patients more than what insurance companies are willing to pay. That’s saving patients thousands of dollars but straining firms who often already fly at a financial loss.

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“There are going to certainly be cuts to local community services at rural hospitals,” said Lauren LaPine-Ray, vice president of policy and rural health and executive director of the Center of Rural Excellence at the Michigan Health & Hospital Association. “And if we already have a strained transportation system, it becomes challenging to think about what that could look like from an access standpoint.”

(Editor’s note: The Michigan Health & Hospital Association is one of several funders of Bridge Michigan. It did not play a role in the conception, reporting or writing of this story.)

Michigan has received $173 million from a $50 billion federal program meant to prop up rural health care. But Medicaid cuts are expected to cost Michigan’s hospitals a combined $6 billion over the next decade.

From 2021 to 2023, the last year Michigan tracked air ambulance services, 11 firms flew a combined average of 3,300 patients a year. More than 8 in 10 of those rides were inter-facility transfers, usually flights from rural hospitals in places like Alpena or Monroe to bigger hospitals such as the University of Michigan hospital in Ann Arbor or the Corewell Health facility in Grand Rapids.

Helicopter rides happen when patients have serious illnesses — such as strokes or cardiac events — for which their local hospital lacks the specialist, equipment or other resources to treat. Specially trained nurses and paramedics ride with patients to provide care during the flight.

“These are not routine transports; they are used when every minute matters and faster access to specialized care can improve outcomes,” Mike Erickson, market president of the MyMichigan Medical Centers in Alpena, Saginaw, Standish, Tawas and West Branch, said in a statement to Bridge Michigan.

A 2019 federal study pegged the average cost around $40,000, while other estimates say a longer trip can cost as much as $100,000.

Prior to 2022, whatever wasn’t covered by insurance was often passed on to the patient (a practice known as balance billing), sometimes to the tune of tens of thousands of dollars. 

That year, however, Congress passed the No Surprises Act and forbid balance billing in most cases. The law set up an arbitration process through which insurers and air ambulance companies could negotiate the cost, a lengthy process that can delay payments to the air ambulance companies by a year or more.

That’s fine for air ambulance services that are part of larger medical systems, said Donna Robinson, clinical nursing director of critical care transport at Michigan Medicine. Smaller operations may not be able to absorb the hit, she said.

At the same time, changes stemming from the One Big Beautiful Act are likely to reduce services at 15 Michigan hospitals in coming years, according to a January report from the Center for Healthcare Quality and Payment Reform. Another nine are at risk of closure, and three at immediate risk of closure. 

That report didn’t identify which hospitals are most at risk, but a March report from Public Citizen listed a dozen Michigan hospitals — from Detroit and Flint to Dowagiac and Iron River — at risk of closure.

“The proposed changes would likely put added strain on access to care across the board — including air medical services — by increasing the number of uninsured patients and reducing reimbursement for Medicaid,” said Erickson of MyMichigan. “That combination creates financial pressure on hospitals and transport providers alike.”

Hospitals will likely first cancel the most expensive services for which they see the fewest patients, such as birthing services and inpatient psychiatric care, said LaPine-Ray of the Health & Hospital Association. 

The fewer services a hospital offers, the more likely patients will need to be transferred to bigger facilities. 

Ground transport often isn’t possible because, in many rural areas, only one ambulance patrols at any given time and is required to stay in the county in case it’s needed there. Plus, ambulances already face severe shortages of paramedics and emergency medical technicians.

Sheriffs are sometimes called upon to transport patients, but they face their own shortages and aren’t trained to handle most care enroute. 

Some potential answers: 

  • Rework the arbitration process to speed payments, said Robinson of Michigan Medical.
  • Create a new license type specifically for transporting psychiatric patients, freeing ambulances for other needs, LaPine-Ray said. Two bills pending in the state Senate would do so.
  • Review regulations surrounding ambulance services — both ground and air — to cut red tape, according to LaPine-Ray.
  • Invest in paramedic and emergency medical technician training and recruitment to help reduce the shortages straining the system, LaPine-Ray said.

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