Proposed Medicaid Cuts Threaten Rural Health, Deepen Urban-Rural Divide
TL/DR –
The Aspen Health Strategy Group warns that the $793 billion in Medicaid cuts proposed in the One Big Beautiful Bill Act over 10 years could be disastrous for rural American health systems, already under pressure. These systems are often vital resources in areas which face higher rates of chronic disease and disability, with rural working-age adults now dying younger than they did decades ago. The cuts would make it harder for individuals and local governments to obtain Medicaid funding, and would increase the number of uninsured people and medical debt; the group argues that the proposed Act would deepen the urban-rural divide and erode already fragile lifelines.
“Rural Health and Hospitals Suffer Devastating Blow”
Rural hospitals and health care providers have raised concerns over the potential impact of proposed Medicaid cuts. The Aspen Health Strategy Group recently convened a meeting to address these concerns.
“Bipartisan Agreement on Impending Catastrophe”
Health leaders reached a clear, bipartisan agreement: the proposed $793 billion in Medicaid cuts over 10 years as per the One Big Beautiful Bill Act, as calculated by the non-partisan Congressional Budget Office, would prove catastrophic for the people of rural America and their health systems, many of which are already teetering on the brink. The Senate narrowly passed the bill with additional cuts, totaling $930 billion, which now awaits final consideration in the House.
“Plight of Rural Health Care Providers”
The rural hospitals and clinics examined do not exhibit waste, fraud, or abuse. Rather, they are thriving on resilience, with providers stretching each dollar for crucial services. One CEO shared that he runs a 25-bed hospital in the Great Plains with just 30 days of cash on hand. Other providers shared stories of continuing to offer services, including child vaccinations, despite falling reimbursements and higher costs.
“Impact on Maternal Health”
Rural mothers are facing life-threatening risks due to cuts in obstetric services in their local hospitals, leaving them nearly 100 miles away from the nearest labor and delivery ward. Rural areas also face higher rates of chronic disease, disability, and certain types of substance use.
“The Economic Impact of Rural Hospital Closures”
The closure of rural hospitals triggers a distressing, multi-year ripple effect. The loss of every 100 hospital jobs leads to a further 35 jobs disappearing due to a decline in local spending. The new bill would lead to more uncompensated care and harm the few funding streams states have for keeping struggling hospitals afloat.
“Challenges to Medicaid Funding”
The One Big Beautiful Bill Act includes several measures making it harder for individuals and local governments to obtain Medicaid funding: procedural hurdles, new work requirements, increased insurance co-payment requirements, and limits on how states can raise their share of Medicaid funding through taxes on providers.
“Public Opinion on the Bill”
A KFF survey reveals that 64% of rural adults oppose this bill, and support drops dramatically when respondents learn about the proposed cuts to local hospital funding.
“The Bill’s Impact on the Deficit”
The One Big Beautiful Bill Act increases the deficit and is set to trigger about $500 billion in mandatory Medicare cuts over the next 10 years, including a 4% reduction in payments to hospitals.
“The Need to Invest in Rural Communities”
Failure to invest in rural communities could deepen the urban-rural divide and erode already fragile lifelines. We must prioritize health and health care to uplift our rural populations and reinvigorate areas where nearly 20% of Americans live today.
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