A Devastating Consequence of Medicaid Cuts: Healthcare Crisis in Rural America

As researchers specializing in rural health and health policy, are sounding the alarm on the impending healthcare crisis in rural America. The recent legislation signed into law by President Donald Trump on July 4, 2025, is expected to have a disproportionate impact on the 66 million people living in rural areas, nearly 1 in 5 Americans. We might add these voters heavily supported the Republican Party and Donald Trump. This law will reduce Medicaid spending by over $1 trillion over the next decade, resulting in an estimated 11.8 million people losing health insurance coverage.

Rural residents are more likely to rely on Medicaid for health insurance, making them more vulnerable to losing coverage. The changes brought about by this new law will likely lead to an increase in unpaid care, forcing small, local hospitals to make difficult decisions, such as reducing or eliminating services, laying off staff, and delaying equipment purchases. Many rural hospitals will be forced to close their doors, leaving millions of Americans without access to vital healthcare services.

The legislation restricts how states can finance their share of the Medicaid program, limiting the use of taxes and fees from hospitals, managed care organizations, and other healthcare providers. This will significantly reduce payments to rural hospitals, which rely heavily on Medicaid to remain operational. The Congressional Budget Office estimates that the work requirements instituted through this legislative package will result in nearly 5 million people losing Medicaid coverage.

The impact on rural areas will be severe, with an estimated reduction of $155 billion in federal spending over 10 years. While the Senate has allocated only $50 billion over the next five years for the Rural Health Transformation Program, this amount is insufficient to offset the cuts to Medicaid and other programs that will reduce funding for rural health facilities. As a result, many rural hospitals will be forced to close, leaving rural Americans without access to healthcare services.

An analysis by University of North Carolina researchers found that, as of June 2025, 338 hospitals are at risk of reducing vital services or converting to alternative types of healthcare facilities. Rural hospitals are not only essential healthcare providers but also vital economic engines, and declines in rural healthcare will undermine local economies.

The root cause of this crisis is the desire to provide tax breaks to billionaires and millionaires, led by President Trump and the Republican party. The consequences of these actions will be devastating for rural America, exacerbating existing healthcare disparities and further eroding the social and economic fabric of these communities.