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Rural Hospitals at Risk: Cuts to Medicaid Would Further Threaten Access [1]

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Date: 2025-06-13

Medicaid, which covers over 16 million people in rural communities, helps address barriers to health care and sustain rural hospitals. But many in Congress are considering Medicaid cuts that would have a devastating impact on rural hospitals and patients.

The One Big Beautiful Bill Act (H.R. 1) would result in 1.8 million individuals in rural communities losing their Medicaid coverage by 2034. In addition, select Medicaid provisions in H.R. 1 would result in a $50.4 billion reduction in federal Medicaid spending on rural hospitals over 10 years.1 See the chart on the next page for a state-by-state breakdown of rural spending and coverage losses.

Rural Hospitals Are Already Struggling:

48% of rural hospitals operated at a financial loss in 2023. 2

of rural hospitals operated at a financial loss in 2023. 92 rural hospitals have closed their doors or been unable to continue providing inpatient services over the past 10 years. 3

rural hospitals have closed their doors or been unable to continue providing inpatient services over the past 10 years. Rural hospitals lose money on several critical service lines , including behavioral health, pulmonology, obstetrics, and burns and wounds.4

Medicaid is Critical to Rural Hospitals:

16.1 million people living in rural communities are covered by Medicaid. 5

people living in rural communities are covered by Medicaid. In nine states, over 50% of the Medicaid population lives in rural communities: Montana, South Dakota, Wyoming, Mississippi, Vermont, Kentucky, North Dakota, Alaska and Maine. 6

of the Medicaid population lives in rural communities: Montana, South Dakota, Wyoming, Mississippi, Vermont, Kentucky, North Dakota, Alaska and Maine. 47% of rural births in the U.S. are covered by Medicaid. 7

of rural births in the U.S. are covered by Medicaid. 65% of nursing home residents in rural counties are covered by Medicaid.8

Medicaid Already Pays Rural Hospitals Far Less Than the Cost of Care:

Medicaid paid rural hospitals approximately 63 cents on the dollar for inpatient obstetrics care in 2024. 9 There has been a 16% decline in rural counties with hospital-based obstetric care services over the last decade. 10

for inpatient obstetrics care in 2024. Similarly, Medicaid payments covered approximately just 70% of costs for behavioral health services in hospital settings, which include substance use disorder treatment.11

State 10-Year Rural Medicaid Coverage Loss Through 2034 10-Year Federal Rural Hospital Impact Through 2034 United States -1.8M -$50.4B Alabama -15.4K -$265M Alaska -17.2K -$382M Arizona -41.1K -$905M Arkansas -51.1K -$1,109M California -134.9K -$2,057M Colorado -28.4K -$835M Connecticut -8.0K -$135M Delaware -6.5K -$174M District of Columbia 0K $0M Florida -7.9K -$210M Georgia -17.6K -$540M Hawaii -24.9K -$507M Idaho -17.2K -$362M Illinois -53.8K -$2,014M Indiana -64.6K -$1,139M Iowa -37.7K -$2,666M Kansas -5.3K -$306M Kentucky -142.3K -$4,012M Louisiana -79.0K -$1,875M Maine -32.7K -$640M Maryland -8.6K -$267M Massachusetts -6.3K -$81M Michigan -68.2K -$2,008M Minnesota -36.2K -$1,065M Mississippi -19.3K -$1,529M Missouri -51.4K -$1,522M Montana -22.3K -$1,076M Nebraska -13.2K -$375M Nevada -10.1K -$230M New Hampshire -12.6K -$753M New Jersey -5.7K $0M New Mexico -55.2K -$1,380M New York -70.9K -$1,125M North Carolina -82.0K -$2,988M North Dakota -7.0K -$61M Ohio -86.0K -$2,497M Oklahoma -51.1K -$2,372M Oregon -83.6K -$1,979M Pennsylvania -55.0K -$1,131M Rhode Island 0K $0M South Carolina -5.1K -$410M South Dakota -12.2K -$95M Tennessee -16.3K -$726M Texas -19.9K -$1,047M Utah -7.4K -$327M Vermont -11.3K -$233M Virginia -55.5K -$1,655M Washington -49.3K -$1,997M West Virginia -30.0K -$664M Wisconsin -30.1K -$607M Wyoming -1.6K -$33M

Source: Modeling of select H.R. 1 Medicaid provisions conducted by Manatt Health Strategies, LLC. This analysis accounts for the following H.R. 1 Medicaid provisions: (1) mandatory community engagement (work) requirements, (2) increasing frequency of eligibility redeterminations for certain individuals, (3) ban on new or increased provider taxes, (4) revising the payment limit for state directed payments (SDPs), (5) reduction in the expansion FMAP in states providing coverage to certain undocumented immigrants and (6) the repeal of rules relating to eligibility and enrollment in Medicaid, CHIP, the Medicare Savings Programs (MSPs) and the Basic Health Program (BHP).

Notes: State values will not sum to national totals due to rounding. Rural Medicaid coverage losses are based on the geographical distribution of Medicaid enrollees. Rural hospital impacts are based on the geographical distribution of Medicaid hospital expenditures.

End Notes

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[1] Url: https://www.aha.org/fact-sheets/2025-06-13-rural-hospitals-risk-cuts-medicaid-would-further-threaten-access

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