When the “One Big Beautiful Bill” passed in July 2025, officials warned some of the cuts within the bill could devastate rural hospitals.
Those cuts are set to hit after the midterm election this fall, and some members of Congress are working to offset them.
A total of about $1.3 trillion is set to be cut from Medicaid, the Affordable Care Act marketplaces, and the Supplemental Nutrition Assistance Program, according to the Commonwealth Fund. To pass the bill, Congress included a $50 billion Rural Health Transformation Program over the course of 10 years, but that money will be spent on innovation and other efforts, not to help rural hospitals recuperate some of those cuts.
Since January, several Congress members from all over the country, and from both parties, have introduced legislation aimed at helping rural hospitals stay open and to improve rural residents’ access to healthcare. Ideas from the lawmakers include bills that would provide interest-free loans so rural hospitals can upgrade their equipment or that would address Medicaid and Medicare reimbursement problems.
U.S. Representative Jill Tokuda (D-Hawaii), co-chair of the House Rural Health Caucus, said Congress needs to act to protect rural hospitals and prevent people from losing health coverage due to new work requirements in the 2025 law.
“These new requirements will create a mountain of paperwork for patients, providers, and states,” Tokuda wrote in an email interview with the Daily Yonder. “People who are eligible for Medicaid could lose coverage simply because they miss a form or reporting deadline. And in rural communities, when people lose coverage, hospitals don’t stop treating them — they absorb the cost. For hospitals already operating on razor-thin margins, that can mean cutting services or closing their doors altogether.”
Short of delaying the requirements, she wrote, Congress can pass legislation to extend some Medicare programs such as telehealth, ambulance services, and support for low-volume hospitals.
“Right now, one of our biggest bipartisan priorities is fixing the Rural Emergency Hospital Designation so it actually works as the lifeline it was meant to be,” Tokuda wrote. “I introduced the House companion to the Rural Emergency Hospital (REH) Designation Improvement Act, partnering with senators Jerry Moran (R-Kansas) and Tina Smith (D-Minnesota) to address the impossible choices our struggling rural hospitals face.”
Currently, she noted, facilities at risk of shutting down often can’t afford to convert to the rural-emergency model because it forces them to cut services such as inpatient psychiatric and obstetric care. Tokuda suggested her legislation would remove those barriers and give hospitals the flexibility to stay financially viable while protecting the hospital’s services.
U.S. Senator Marsha Blackburn, R-Tennessee, is the co-chair of the Senate Rural Health Caucus. Working with her colleagues in both houses and in both parties, she is pushing a package of bills designed to address rural health care issues —the Rural Health Agenda.
“Rural Tennesseans and Americans face countless barriers to accessing quality health care in their communities,” Blackburn said in a statement. “Seventy-eight of Tennessee’s 95 counties are considered rural, and addressing health care delivery challenges in rural America could mean the difference between life and death for some patients. The Rural Health Agenda targets key areas of reform, including the recruitment of health professionals, the delivery of urgent care and emergency triage services, and the flawed Medicare Area Wage Index that results in rural hospitals receiving lower payment rates.”
Blackburn’s office did not return calls or emails from the Daily Yonder requesting comment.
Among the legislation in the package organized by Blackburn are:
the Save Struggling Hospitals Act, which would increase reimbursement for wages and help attract rural and low-wage hospitals compete for staff,
the Rural Hospital Revitalization Act, which would provide zero-interest loans of up to 10 years through the U.S. Department of Agriculture Community Facilities program for modernization and facility renovations,
the Rural Hospital Closure Relief Act, which would temporarily allow financially distressed rural hospitals with multi-year operating losses to qualify as Medicare Critical Access Hospitals,
and the Rural Hospital Support Act, which would modernize and make permanent provisions for Medicare-dependent hospitals and low-volume hospital payment adjustments, and adjust base rates for sole community hospitals to help stabilize their income.
Several other lawmakers have filed bills designed to help rural communities. In May, U.S. senators Ron Wyden and Jeff Merkley, both Democrats from Oregon, introduced legislation that would extend the Rural Community Hospital Demonstration program for five years. That program is designed to improve the financial stability of rural hospitals by paying reasonable costs of Medicare inpatient services to prevent hospital closures.
“Republicans have made their priorities clear by gutting access to health care, especially in rural areas, just to let the wealthiest individuals in the country avoid paying their fair share,” Wyden wrote in an email interview with the Daily Yonder. “Already we have seen the effects of these disastrous cuts with increased costs for patients and providers, clinic closures, and reduced coverage with nearly 250,000 Oregonians at risk of losing health insurance starting January 2027.”
Introducing bills like those is nothing new — it happens every election year, said Alan Morgan, president and CEO of the National Rural Health Association. What is new, he said, is the urgency in which some action is needed.
“We would expect that we’ll see some sort of legislative relief in some version after the election,” Morgan said in an interview with the Daily Yonder. “Hopefully, in an end-of-year omnibus funding bill, they’ll put some provisions in. I don’t know what they’ll be at this point, but there’s a lot of health legislation on Capitol Hill right now.”
Morgan said it wasn’t clear what would be included in that funding bill, or whether it would fully address the Medicaid cuts. However, Congress is paying attention, he said.
“The huge cuts that were included within HR 1 and the potential promise of the rural transformation, that’s really focused policymakers on the plight of rural hospitals,” he said.
“The health care system is changing rapidly to try to address this, so it’s really a moving target. Honestly, I don’t know how this is going to work in the first quarter of next year once the Medicaid cuts take effect.”
Kevin Stansbury, CEO of Lincoln Community Hospital and Care Center in Hugo, Colorado, said his hospital could see significant losses.
“When the cuts are complete, we could lose about $1.5 million in revenue to our already non-existent bottom line, which is really going to stress us tremendously,” he said in an interview with the Daily Yonder.
Stansbury said he had been working with U.S. Sen. Michael Bennet, D-Colorado, and co-chair of the Senate Rural Health Caucus with Blackburn, on the Rural Hospital Revitalization Act. The legislation has been in the works for years, and would be an important part of helping rural hospitals stay up to date with their equipment.
“My hospital is over 60 years old. It was built by veterans returning from World War II,” Stansbury explained. “They did everything with volunteer labor. They got materials and supplies donated by the community, and it took them 12 years, but they built their own hospital.”
“That’s the building I still operate in today, and because of the financial performance of my hospital and many hospitals like us, I don’t have any financial reserves built up where I can help invest in future capital,” he said. “[The Rural Hospital Revitalization Act would] give struggling rural hospitals like mine a huge break, and an opportunity to have access to capital that otherwise would be very difficult for us to do because of our financial situation.
As Congress comes back into session over the next few weeks, it’s clear rural healthcare and rural hospital funding will be an issue, Tokuda noted, but it’s up for debate what that will look like and when it will happen, she said.
The post Congress Members Move to Offset Coming Cuts to Rural Hospital Funding appeared first on The Daily Yonder.
Follow