Hospitals and clinics in the Olympia area depend on more than $200 million a year in Medicaid payments. That funding is now at risk.

A report released Oct. 20 by the state hospital and community health associations projects Washington hospitals will lose nearly $6 billion in revenue through 2033 as federal Medicaid cuts take hold, as first reported by the Washington State Standard.

The losses start at $339 million statewide in 2027 and climb to $1 billion per year by the 2030s.

In the 10th Congressional District, which includes Olympia and Tumwater, slightly over 205,000 residents are enrolled in Medicaid, roughly 26% of the district's population, according to the state Health Care Authority. Ten hospitals in the district received $202 million in Medicaid payments in state fiscal year 2024, with 72% paid by the federal government.

The Olympia Free Clinic is already preparing for a rise in its caseload, according to the Community Foundation of South Puget Sound. The nonprofit clinic, staffed by 120 volunteer doctors, nurses and support staff plus four paid employees, had seen 537 patients through October.

It has formed an alliance with CHOICE Regional Health Network and MultiCare to prepare for what it expects will be an unpredictable increase in demand.

The cuts stem from H.R. 1, the federal tax and spending law signed July 4, 2025. Gov. Bob Ferguson said more than 200,000 Washingtonians are expected to lose Medicaid coverage, known in Washington as Apple Health, by the end of 2027. Over 1.9 million residents were enrolled as of June 2024.

New work requirements take effect Jan. 1, 2027. About 600,000 enrollees will need to prove every six months that they are working, volunteering or attending classes at least 80 hours per month. The mandate applies to adults ages 19 to 65 without dependent children under 13. State officials expect many enrollees who meet the requirements will still lose coverage because of paperwork barriers.

Ferguson signed an executive order in September establishing a committee to coordinate the state's response, The Olympian reported. His office contacted at-risk immigrants and saved about 3,000 from losing coverage.

The state is building an automated verification system that Ferguson projects will protect 400,000 people.

Roughly 10,000 immigrants in Washington already lost Medicaid on Oct. 1, when the law stripped benefits for refugees, asylees and other lawfully present immigrants.

Community health centers statewide expect to lose between $98 million and $118 million in Medicaid reimbursements next year, the report found. At least 82,000 clinic patients are projected to lose coverage, leading to more than 200,000 fewer visits per year.

The doctor pipeline may also shrink. Providence Swedish announced in April 2026 it will merge its two largest family medicine residency programs, cutting the combined cohort from 69 to 51 residents by 2029 because of anticipated Medicaid reductions, according to a state Department of Health report to the Legislature.

The Swedish Cherry Hill Rural Training Track is expected to transition its home program to Providence Family Medicine in Olympia.

U.S. Sen. Maria Cantwell discussed the report at an Oct. 20 news conference at Harborview Medical Center in Seattle. "When you don't do that, you are literally driving up the cost on all of us," Cantwell said, referring to the role Medicaid plays in reducing uncompensated hospital care.

Congressional Republicans have said the more than $900 billion in nationwide cuts over the next decade are necessary to protect Medicaid from waste, fraud and abuse.

The law also includes $50 billion for rural healthcare, and Washington is expected to receive hundreds of millions over five years for rural health initiatives.

A June Thurston County budget briefing flagged hospital reimbursement and Medicaid fee increases among the 2027 Legislature's significant challenges, alongside a projected negative general fund balance of $878 million.