Commentary: Medicaid cuts threaten rural communities
Published 1:30 am Wednesday, July 9, 2025
The Congressional budget bill, passed with almost unanimous support by Republicans and signed by President Donald Trump on July 4, proposes cuts that will disproportionately affect small rural communities. Rural areas that already struggle with aging populations, shrinking workforces, and economic decline are especially at risk.
This bill would reduce federal funding for Medicaid, which rural areas depend on, by $863 billion. (The bill appropriates $50 billion for rural healthcare, but this amount is viewed as woefully inadequate by experts.)
This blow to Medicaid is a blow to rural communities like Vashon.
Medicaid is a joint federal and state program that provides a broad range of services for lower-income people, many living in rural America. Nationally, about 20% of all Americans receive healthcare coverage through Medicaid.
Reductions of this size would severely threaten small rural hospitals, leading to more closures and a significant economic impact on the communities they serve.
According to the Center for Healthcare Quality and Payment Reform, one-third of all rural hospitals are now at risk of closing. The National Rural Health Association estimates that rural hospitals will lose 21 cents out of every dollar they receive in Medicaid funding in this budget. Total cuts for rural hospitals would reach almost $70 million over 10 years.
Washington state’s Medicaid, Apple Health, is a fragile safety net for rural communities. Apple Health funds healthcare for almost half of the state’s children, as well as maternal-child health, nursing homes, chronic disease management, and behavioral health services in communities already plagued by high suicide rates.
But rural healthcare is expensive. In Washington State, two-thirds of small community hospitals report ongoing service losses, and nearly half are at risk of closing. Remote communities are served by small critical access hospitals, located at least 35 miles from another hospital. They must be staffed and equipped to provide 24-hour emergency services for a smaller population, and with much lower reimbursement than an urban hospital would receive.
These hospitals receive a higher percentage of Medicaid and Medicare reimbursement than urban hospitals (72% vs. 66%). That reimbursement is critical because their payment from private insurance is often less than their actual costs to provide care.
In 2023-2024, small community hospitals reported an average loss of 2.6% on reimbursement from private insurance plans, including Medicare Advantage. And in 2023, the median profit margin for rural community hospitals was -5%. Meanwhile, large urban systems can charge more for their care to offset losses and negotiate better reimbursement rates with insurers.
It is harder for rural systems to recruit and retain staff than urban areas. Physicians in rural communities are aging and report high levels of burnout. Rural hospitals are ending labor and delivery care because of the higher risks of complications and low reimbursement.
In addition to small hospitals, publicly funded community health centers (CHCs) also face significant financial losses. In Washington, 28 CHCs provide primary healthcare, dental services, preventative health and screenings, and behavioral health, including chemical dependency treatment, where the nearest hospital may be over an hour away.
There are significant consequences when hospitals and health centers in small rural communities close.
• Patients with life-threatening injuries can be stabilized in a rural hospital before transport to a larger facility, increasing the likelihood of survival.A study in California found that mortality from heart attacks increased by as much as 30% when an emergency department closure led to increased travel time to the nearest hospital.
• Maternal and infant morbidity and mortality increase. When women have to travel a significant distance for obstetric care, the incidence of preterm deliveries and complications is higher.
• Delays accumulate in diagnosing serious conditions. Without access to screenings, diagnostic labs, and imaging, diseases are not diagnosed in the early stages. An ounce of prevention is worth a pound of cure, and when people with chronic conditions such as diabetes and heart disease don’t receive regular monitoring, they may develop complications that would otherwise be detected.
• Cuts doubly harm patient health outcomes and local economies. In many communities, the health care system is one of the largest employers. When a hospital or clinic closes, people leave for other employment. Population loss means lost revenue for other businesses. The community tax base is reduced, affecting schools, childcare, and social services. It is difficult to attract new residents when there are limited services, especially emergency medical care.
• Cutting federal Medicaid shifts costs to others, while increasing costs and disease burden. States will be responsible for funding the gaps in care, and Washington State is already facing a $ 12 billion deficit over the next four years. This means that already stretched rural communities will likely see less access to healthcare, worse patient healthcare outcomes, and increasing economic decline.
Unfortunately, across the country and in Washington state, many of the people most likely to suffer from these cuts live in areas that Republican members of Congress represent.
Dr. James Wallace, a Family Medicine physician in Okanogan County, wrote passionately about the potential impact on his patients in the June 26th The Seattle Times. He noted that Okanogan County is the most Medicaid-dependent county in Washington — yet its Representative, Dan Newhouse, a Republican, voted for the bill.
Tax benefits for the wealthy will go into effect this year, but the cuts to Medicaid, SNAP, and other safety net programs will not go into effect until after the midterm elections in 2026. The New York Times reports that Republicans seem to be taking a gamble that working-class voters who depend on programs like Medicaid and SNAP (food stamps) will not blame them for the consequences.
But this Republican Congress is gambling with people’s lives, the safety of their most vulnerable constituents, and rural economies. Whether politically prudent, the human consequences are likely to be felt for years.
Wendy Noble is a member of the Medical Reserve Corps and a Vashon Health Care District commissioner. She has worked as a nurse practitioner with people from rural counties in the upper Midwest, Alaska villages, and remote Navajo communities.
