Democratic lawmakers and liberal policy analysts say changes to Medicaid in President Donald Trump’s massive tax cut and spending bill could mean big trouble for rural hospitals.
Medicaid, a $900 billion state and federal health insurance program, covers low-income and disabled people. It accounts for about 19% of spending on hospital care nationwide. About 20% of patients who visit hospitals in Ohio use Medicaid, according to the Ohio Hospitals Association (OHA), which represents all of Ohio’s more than 250 hospitals.
“Medicaid is pretty significant,” said John Palmer, director of Media and Public Relations for OHA. “We get reimbursed a lot through the Medicaid program.”
Palmer said about 60 hospitals in Ohio are designated as ‘rural’ or ‘critical access’ facilities. In 2024, 88% of the state’s rural hospitals had an operating margin of 2% or less. About 72% had a margin of 0% or less.
“Medicaid is what keeps many of these facilities afloat. And they are going to have to either cease operations, close down, or consolidate,” said Alex Jacquez with Groundwork Collaborative, a progressive economic policy group in Washington, D.C.
Jacquez said the Kaiser Family Foundation and the Center for Budget and Policy Priorities estimate that around 489,000 Ohioans are at risk of losing their Medicaid coverage under the new law. The nonpartisan Congressional Budget Office has said that overall, federal Medicaid spending will be reduced by about $1 trillion over the next decade.
Rural hospitals “at-risk”
Because of the cuts, 11 of Ohio’s rural hospitals are considered “at-risk” of closing or reducing services, according to the Sheps Center for Health Services, a research center in North Carolina. That list was included in a letter from a quartet of democratic lawmakers to Trump, House Speaker Mike Johnson, and Senate Majority Leader John Thune.
The June 12 letter was penned after the House approved its version of the budget reconciliation bill, but before the Senate had voted.
“Enacting these drastic health care cuts that will kick millions of people off their health insurance coverage, rural hospitals will not get paid for the services they are required by law to provide to patients. In turn, rural hospitals will face deeper financial strain that could lead to negative health outcomes for the communities they serve,” it reads.
It’s signed by Senators Edward Markey of Massachusetts, Ron Wyden of Oregon, Chuck Schumer of New York, and Jeffrey Merkley of Oregon.
The rural hospitals on the list either have been operating at a deficit for three straight years or are in the among top rural providers for Medicaid patients across the country.
The Ohio hospitals include:
- Southern Ohio Medical Center in Portsmouth
- Wayne Hospital in Greenville
- East Liverpool City Hospital
- Coshocton Regional Medical Center
- Trinity Health System’s Twin City Medical Center in Dennison
- WVU Harrison Community Hospital in Cadiz
- Avita Health System’s Bucyrus Hospital
- Avita Health System’s Galion Hospital
- Holzer Medical Center in Jackson
- Adam’s County Regional Medical Center in Seaman
- Adena Fayette Medical Center in Washington Courthouse.
Most of the Ohio hospitals on the list fall under the category of top Medicaid providers. Twin City Hospital and Harrison Community Hospital were included on the list due to their finances.
The hospitals have remained largely silent about their inclusion on the list. Most declined or did not respond to interview requests.
Wayne HealthCare released a statement in June that said cuts to Medicaid posed a “serious threat to rural healthcare access.” Wayne assured its patients, however, that it wasn’t at risk of closing.
Wayne Hospital is the only hospital in western Ohio’s Darke County, a county with a population of about 51,000 people.
“In more remote areas, you might only have one clinic, one emergency room, one hospital for miles. And those clinics are often reliant on Medicaid patients as a steady stream of revenue,” Jacquez said.
Other changes
Trump’s tax cut and spending bill didn’t just make cuts to Medicaid. It also creates a temporary payment increase for Medicare physician fees and sets up a $50 billion fund for rural hospitals.
“It is a lot of implications, there was a lot of provisions. When we zeroed in on what the impact was going to be, we were very appreciative of where the rural healthcare fund ended up,” OHA’s Palmer said.
The fund offers $10,000 a year to rural hospitals from 2026 to 2030. Half of the money for each year will be equally distributed across all states that apply, while 40% will be divided up based on rural geography, Palmer said. Up to 10% can go to states for administrative fees.
CEOs of four rural Ohio hospitals sent a letter to Ohio’s Republican Senators, Bernie Moreno and Jon Husted, thanking them for that funding.
“Thanks to your efforts, our hospitals will be able to continue providing high-quality care close to home, keep essential services running, and sustain thousands of local jobs – for years to come,” reads the letter, shared by Husted in a news release.
The letter is signed by Adena Health System’s CEO, Jeff Graham and Southern Ohio Medical Center’s Ben Gill. Both of their hospitals appear on the list of hospitals possibly at risk of closing. Both hospitals declined interviews for this story.
Jacquez said that the rural hospital fund is “all well and good,” but it isn’t consistent, ongoing revenue like the payments hospitals get for patients using Medicaid.
“Calling it a Band-Aid on a bullet wound is an insult to Band-aids. And it's just simply not going to be enough to cover the trillion-dollar hole that we are putting in Medicaid through this bill,” Jacquez said.
Timeline for enactment
Additionally, while the tax benefits in the new law come quickly, cuts to Medicaid will happen beginning in 2027, after mid-term elections.
“I'll leave it up to you to determine whether you think that's a political move,” Jacquez said.
The delay also leaves room for change. Palmer said the Ohio Hospital Association will continue to advocate for the Medicaid program and to share its importance when it comes to people getting the care they need. He said Medicaid has changed before – and could change again.
“I know this is just one law, but there's going to be future opportunities that we're going to be working towards,” Palmer said.