States eye aid to prop up distressed hospitals amid federal Medicaid cuts

Summary: Many hospitals in poorer neighborhoods are running out of money and struggling to care for patients. At Martin Luther King, Jr. Community Hospital in Los Angeles, the emergency room is so crowded that some patients are being treated in outdoor tents. A new federal law is expected to cut Medicaid spending by $911 billion over ten years, which will make these money problems much worse.

To help prevent hospitals from closing, states like California, Pennsylvania, and Illinois are trying to create special loan funds. California already gave out $300 million in zero-interest loans to struggling hospitals and is trying to pass a bill to give $300 million more. However, state budgets are very tight right now, and some politicians worry these loans will never be paid back. Meanwhile, hospitals are doing whatever they can to survive, from freezing employee retirement funds to building new psychiatric units with plush recliners to bring in more money.

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