A new analysis predicts the GOP funding cuts would be catastrophic for rural hospitals that rely on Medicare, Medicaid, and the ACA.
The more than $1 trillion in budget cuts put forward in President Donald Trump's One Big Beautiful Bill Act would trickle down and threaten the survival of 338 rural hospitals, most of them in Red States, a new study finds.
In a letter Thursday to Trump, House Speaker Mike Johnson (R-LA) and Senate Majority Leader Mike Thune (R-SD), Senate Democrats warned that the cuts would be catastrophic for rural hospitals that rely heavily on funding from Medicare, Medicaid, and the Affordable Care Act, and for the communities they serve.
"If your party passes these healthcare cuts into law, Americans in rural communities across the country risk losing healthcare services and jobs supported by their local hospitals," the letter states.
Threatened Hospitals List
Senate Democrats asked UNC's Cecil G. Sheps Center for Health Services Research to identify rural hospitals across the nation that are at risk of closing based upon financial data such as: whether the hospital has lost money for the last three years; how the hospital finances compare to peer hospitals; and whether the hospital serves a disproportionately high share of Medicaid patients.
The Sheps Center identified 338 hospitals fitting those parameters, of which 217 are located in Red or Red-leaning states. In Speaker Johnson's home state of Louisiana, for example, 32 rural hospitals made the list. In Kentucky, where 44% of its rural hospitals serve high concentrations of Medicaid patients, 35 hospitals could close or cut back on services.
$1T in Healthcare Funding Cuts
On May 22, the OBBBA reconciliation squeaked through the House 215-214 on a strictly partisan vote. The Senate, which Republicans control with a 53-47 majority, is working through its version of the bill with hopes for a vote by July 4.
However, some Republican senators have raised concerns about the effects of the funding cuts — needed to offset the extension of expiring 2017 Trump-era tax cuts that will mostly benefit the wealthy — on the national debt, while fiscal hardliners say the cuts don't go far enough.
Providers could face a staggering $1.03 trillion drop in revenues from 2025 to 2034 if the OBBBA is passed in its current form, according to an Urban Institute report funded by the Robert Wood Johnson Foundation.
The estimate presumes that the House reconciliation bill becomes law and that enhanced premium tax credits for ACA health plans expire at the end of 2025. In addition, the nonpartisan Congressional Budget Office estimates that about 16 million people would lose health insurance if OBBBA passes, which the Urban Institute estimates would raise uncompensated care costs for providers by $278 billion.
In addition to the loss of healthcare access, the Democrats in their letter note that "rural hospitals are often the largest employers in rural communities, and when a rural hospital closes or scales back its services, communities are not only forced to grapple with losing access to healthcare, but also with job loss and the resulting financial insecurity."
John Commins is the news editor for HealthLeaders.
KEY TAKEAWAYS
UNC's Cecil G. Sheps Center for Health Services Research identified 338 rural hospitals across the nation that are at risk of closing based upon financial data such as: whether the hospital has lost money for the last three years; how the hospital finances compare to peer hospitals; and whether the hospital serves a disproportionately high share of Medicaid patients.
Of those threatened hospitals, 217 of them are in Red or Red-leaning states. In Speaker Johnson's home state of Louisiana, for example, 32 rural hospitals made the list. In Kentucky, where 44% of its rural hospitals serve high concentrations of Medicaid patients, 35 hospitals could close or cut back on service lines.