The Trump administration’s flagship budget package, dubbed the One Big Beautiful Bill Act, is advancing through Congress and is currently awaiting a vote in the Senate. The bill includes the biggest Medicaid funding cuts ever proposed in the history of the program — changes that would likely cause more than 10 million Americans to suddenly lose their healthcare coverage.
The American Hospital Association estimates that the passage of this legislation would result in a $50.4 billion reduction in federal Medicaid spending on rural hospitals over the next decade, as well as 1.8 million people in rural communities losing their Medicaid coverage.
This scenario is especially troubling because rural hospitals are already experiencing severe financial challenges, the AHA noted in a report it released last week. It is often more expensive to deliver healthcare in rural areas because of smaller patient volumes and higher costs for attracting staff.
The report highlighted a statistic showing that nearly half of rural hospitals operated at a financial loss in 2023. It also pointed out that 92 rural hospitals have been forced to shutter over the past 10 years.
Not only are rural providers typically struggling financially, but they’re also often dependent on Medicaid revenue. In rural communities, 18% of adults are covered by Medicaid.
In nine states, more than half of the Medicaid population lives in rural areas, the AHA’s report noted. These states are Alaska, Kentucky, Maine, Mississippi, Montana, North Dakota, South Dakota, Vermont and Wyoming.
The report also stated that 47% of births in rural communities are covered by Medicaid.
“The Medicaid cuts in the One Big Beautiful Bill Act would devastate rural hospitals across the country,” AHA CEO Rick Pollack said in a statement. “Many rural hospitals would be forced to choose between maintaining services, keeping staff and possibly closing their doors. Patients would be forced to travel hours for basic or emergency care, and communities would suffer.”
In addition to the AHA, a group of Democratic senators also published an analysis assessing the budget plan’s impact on rural healthcare. Their analysis found that the legislation could put 338 rural hospitals at risk of closing their doors.
The states with the highest number of hospitals at risk of closure are Kentucky (35), Louisiana (33), California (28) and Oklahoma (21).
The analysis also stated that hospital closures in rural America would also pose a threat to many local economies — given rural hospitals are often one of the biggest employers in their area.
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