Opinion -- Federal Medicaid Cuts Imperil Rural Hospitals and Residents

Medicaid serves as a vital source of health insurance coverage for Americans living in rural areas, including children, parents, seniors, individuals with disabilities, and pregnant women. Congressional lawmakers are currently considering more than $800 billion in cuts to the Medicaid program, which would reduce Medicaid funding and terminate coverage for vulnerable Americans. The proposed changes would also result in a significant reduction in Medicaid reimbursement that could result in rural hospital closures.

The National Rural Health Association recently partnered with experts from Manatt Health to shed light on the potential impacts of those cuts on rural residents and the hospitals that care for them over the next decade. Report findings provide insight into the impact on rural America at a critical moment in the Congressional debate over the future of the reconciliation package.

The report shows the significant impact from coverage losses that rural communities will face given:

• Medicaid plays an outsized role in rural America, covering a larger share of children and adults in rural communities than in urban ones.
  
• Nearly half of all children and one in five adults in small towns and rural areas rely on Medicaid or CHIP for their health insurance.
  
• Medicaid covers nearly one-quarter of women of childbearing age and finances half of all births in these communities.

The press conference will discuss Manatt’s estimated loses rural hospitals will incur due to the One Big Beautiful Bill Act. Analysis shows deep cuts in Medicaid reimbursement for rural hospitals—including both federal and state funds—over the ten-year period outlined in the bill. Reductions in Medicaid funding of this magnitude would likely accelerate rural hospital closures and reduce access to care for rural residents, exacerbating economic hardship in communities where hospitals are major employers.

As a key insurer in rural communities, Medicaid provides a financial lifeline for rural health care providers — including hospitals, rural health clinics, community health centers, and nursing homes—that are already facing significant financial distress. These cuts may lead to more hospitals and other rural facility closures, and for those rural hospitals that remain open, lead to the elimination or curtailment of critical services, such as obstetrics.

“Medicaid is a substantial source of federal funds in rural communities across the country. The proposed changes to Medicaid will result in significant coverage losses, reduce access to care for rural patients, and threaten the viability of rural facilities,” said Alan Morgan, CEO of the National Rural Health Association. “It’s very clear that Medicaid cuts will result in rural hospital closures resulting in loss of access to care for those living in rural America.”