Congressmen warn of Medicare ‘crisis’ at SLO County healthcare forum
San Luis Obispo County — along with the rest of the country — is in a Medicare crisis, according to Central Coast Congressman Salud Carbajal.
That was the message he shared as part of a panel discussion with Rep. Jimmy Panetta and multiple SLO County healthcare leaders on Friday at Cuesta College.
“Reports estimate that there will be a shortage of over 80,000 physicians in the United States by 2036,” Carbajal said at Friday’s panel. “I think that’s a crisis.”
Panetta echoed those fears.
“Medicare is a promise we make to seniors that after a lifetime of work, you should be able to count on affordable and reliable healthcare,” Panetta said. “... Right now, that promise is at risk.”
The federal health insurance program for seniors and younger people with disabilities faces $500 billion in cuts over the next decade due to the Trump administration’s omnibus budget bill, according to a new report from the Congressional Budget Office.
Over the hourlong panel, audience members heard about the challenges healthcare providers face and received updates from their congressmen on the fight for Medicare access against the Trump administration.
“Republicans, at the direction of President Trump, have used their big, ugly bill to cut social programs for the most vulnerable people in this country in order to give billionaires like Elon Musk yet another tax break,” Carbajal said.
Laurie Alves and her mother were among the attendees at Friday’s panel.
Since her mother’s Medicare Advantage insurance was canceled this month, Alves has been trying to figure out how to get her mother the care she needs. They came to the panel looking for answers.
“Luckily, she has appointments this year to still see her doctors,” Alves told The Tribune. “But what’s going to happen next year?”
Medicare reimbursement rates are critically low, causing healthcare shortages
Medicare operates by reimbursing physicians for the cost of care they provide to program beneficiaries.
There are currently 72,000 Medicare beneficiaries in SLO County, according to Panetta. That is over a quarter of the total population.
However, those beneficiaries are not seeing the care they need — and have not been for a while — due to the care gap created by Medicare reimbursement rates not keeping up with the rate of inflation.
As the cost of providing care has gone up nearly 40% since 2001, Medicare reimbursements to service providers have only increased by 10% — effectively creating a 33% pay cut for doctors, Panetta said.
This in turn makes it difficult to recruit and retain healthcare providers, especially in SLO County, where the cost of living is 44% higher than the national average and 3% higher than the state average, according to the Economic Research Institute.
“For years, Medicare has not kept pace with the real cost of care,” Panetta said. “Unfortunately, we’ve reached a breaking point. ... We cannot keep asking our providers to do more with less, while seniors wait longer and travel farther for care.”
As a result of lagging reimbursement rates, health care providers are losing the ability to effectively serve those covered by Medicare.
In 2022, about 30 percent of California physicians were planning to drop their Medicare patients, and about 50% were planning to retire early as a result of financial losses from reimbursement rates, according to a California Medical Association report at the time.
“We actually lose money on every one of those patients because of the fact that reimbursement is not competitive enough,” president of Adventist Health Central Coast Ryan Ashlock said.
The bulk of this cost falls on hospitals, further reducing access to care, said Sue Andersen, president and CEO of Dignity Health Central Coast hospitals. Her hospitals — French Hospital Medical Center, Arroyo Grande Community Hospital and Marian Regional Medical Center — stand to lose over $20 million a year in reduced reimbursement.
“You will see smaller hospitals probably close, or you’ll see hospitals reducing the services that they’re able to provide,” Andersen said.
Movement for Life Physical Therapy is one of those small businesses that is suffering under Medicare reimbursement rates.
According to Templeton Clinic Director Jason Sanders, providers have had to “work harder to make less.”
Currently, the cost of per physical therapy appointment is $91.30, Sanders said. Movement for Life receives $94.85 per appointment — resulting in $3.55 in profit per visit.
Movement for Life currently has 27 clinic locations across three states. As a result, the organization will not open another clinic in California, Sanders said.
“This is not just a Medicare, over-65 problem,” Sanders said. “This is a community of-all-ages problem.”
Panetta hopes to reduce the cost burdens of Medicare through the Patient Access and Practice Stabilization Act.
The bipartisan bill, of which Panetta is a co-sponsor, would block the cuts to Medicare and tie reimbursements to inflation, similarly to how Social Security and veterans benefits are managed, ensuring patients have access to the doctors they know and trust.
But the fight is far from over for SLO County’s representatives.
“We need to continue fighting,” Carbajal said. “We need to continue advocating.”
This story was originally published August 23, 2025 at 10:00 AM.
