After the Trump administration announced plans to freeze all federal funding last month, Monica Bernhard rushed to figure out if Kitsap Mental Health Services had left anything unbilled. 

Bernhard, the agency’s CEO, had the “optimistic idea” that if everything was on the books the federal government would have to reimburse KMHS eventually. Everybody, she has learned in the weeks since, employed the same strategy.

Before it was blocked by a federal judge, the sweeping action created chaos for nonprofits across the country. Even now, some places continue to experience ongoing disruptions as a result of the halt on domestic spending.

Health care providers and nonprofits on the Kitsap Peninsula say they have not experienced major disruptions from the funding freeze or other executive actions introduced by the Trump Administration. Yet policies seeking to eliminate diversity programs and slash spending created uncertainty. 

Bernhard was not overwhelmingly worried about what a funding delay would mean for KMHS. The agency, which serves patients with moderate to severe mental illnesses, boasts revenues around $60 million with a healthy reserve fund and only $4.55 million in federal grants. They could stave off closures of those programs, at least temporarily.

Other providers, though, may be in tougher situations. Those caring for some of the most vulnerable residents on the Kitsap Peninsula often do so on razor-thin margins, Bernhard said. Any disruption to cash flow could sink a program or result in staffing cuts. 

“Not everybody’s in a position where they can weather those storms and that’s what scares me,” she said. “We can’t afford to lose a food bank. We can’t afford to start shutting down housing programs. We just can’t.”

Chaotic and confusing for providers

The situation for health care providers on the peninsula, like elsewhere, is up in the air. Many executive actions have been paused as they are challenged in the courts. 

KMHS plans to follow the law, Bernhard said. Like others, however, it is not making any decisions until things become more clear. Still, the flurry of changes have impacted her staff. Some have come to her office in tears wondering if they would soon be out of a job. 

“The disruption is that it’s very unsettling,” she said. “It’s hitting very close to home for a lot of people.” 

Kitsap Public Health District leadership meets weekly to stay informed on the rapidly changing landscape, Administrator Yolanda Fong told the health board earlier this month. 

An order to end Diversity, Equity and Inclusion programs forced the Centers for Disease Control to scrub an estimated 3,000 pages of material on everything from sexually transmitted infections and vaccines to overdose prevention, said Dr. Gib Morrow, Kitsap’s top public health official. Publications of some materials, like the CDC’s Morbidity and Mortality weekly report, were also paused. 

“It’s been chaotic and it’s been confusing,” Morrow told the health board. “It’s led to a lot of uncertainty.” 

About 9% of the agency’s 2025 budget – or $1.7 million – comes from federal sources, Fong said, adding that they have about $5 million in reserves. The health district could not exactly exchange those one-to-one. But the reserve would provide time to make adjustments and plans if the district loses federal resources. 

In an email, Fong said the district had not identified any immediate impacts to its operations from the federal policies. Kitsap Public Health is working with the Washington state Department of Health as it monitors the situation.

“Regardless of federal changes, we remain fully committed to our mission of preventing disease and protecting and promoting the health of all people in Kitsap County,” she said.

The Pierce County Public Health District also reported no immediate impacts, according to spokesperson Kenny Via. 

“Our staff is working internally to determine how to apply potential changes to our operations,” he said. “We are identifying specific funding sources that may be affected long-term and engaging with local, state and federal partners about future funding.”

A spokesperson for Virginia Mason Franciscan Health, the parent company of St. Michael Medical Center in Silverdale and St. Anthony Hospital in Gig Harbor, wrote in an email they “don’t have anything to contribute to this story.” They redirected communications to the Washington State Hospital Association. 

Association spokesperson Tim Pfarr wrote in an email the agency and state hospitals are still working to understand the federal directives and how to respond.

“The situation is very dynamic and continues to evolve,” he said. “We encourage patients to talk directly with their providers about the best approaches for managing their care.”

Substance use treatment providers, Agape Unlimited in Bremerton and Crossroads Treatment Center, which works with students at Gig Harbor schools, also have reported no impacts so far. 

Peninsula Community Health Services, a federally-qualified health center with clinics across Kitsap, North Mason and rural Pierce County, experienced a temporary freeze drawing funds through its federal portal, said CEO Jennifer Kreidler-Moss. That has since been resolved.

The agency has several funding streams that could be affected by the executive orders and are waiting for court decisions before making any permanent decisions, Kreidler-Moss said. They are continuing to monitor for changes that would put programs in jeopardy and patients at risk. 

“I would expect that all of us who receive federal dollars are figuring out how to continue to deliver essential services while being true to their underlying missions and still ensure compliance to the changing funding requirements,” she said. “I am sure like PCHS, that many organizations just want to do the right thing by the individuals served day to day and leave politics aside.”

What Medicaid cuts could mean

Providers will also be watching to see what, if anything, happens to Medicaid, a critical safety net providing insurance to people with low incomes or disabilities. Nearly 295,000 people in Kitsap and Pierce counties are Medicaid eligible, according to the Washington State Health Care Authority. 

There are looming questions about cuts to Medicaid. Republicans in the U.S. House this month released a budget proposal calling for spending cuts to the committee that oversees Medicaid, according to KFF Health News. They are also weighing requirements that make it work dependent.

Cuts of any kind would be difficult, providers on the peninsula say, and likely disrupt a host of health-related services including substance abuse and behavioral health treatment. Many nonprofits caring for vulnerable groups get a majority of their funding from Medicaid. 

KMHS receives about 70% of its funding through Medicaid. Bernhard says if cuts happen, people will be less likely to get preventative care for their physical or behavioral health. Many will wait until it is absolutely necessary or they are in crisis.

“If people don’t have access to health care it’s not that they’re not going to get sick,” she said. “The cost of the healthcare system, it’s not going to go away. It’s just going to be transferred to another avenue.”

Conor Wilson is a Murrow News fellow, reporting for the Kitsap Sun and Gig Harbor Now, a nonprofit newsroom based in Gig Harbor, through a program managed by Washington State University.