Across the United States, rural hospitals and millions of low-income Americans are bracing for the fallout from sweeping Medicaid cuts enacted under the Republican-led "One Big Beautiful Bill Act," signed by President Donald Trump in the summer of 2025. As the dust settles on this controversial legislation, communities from New York’s Hudson Valley to California’s San Joaquin Valley are already feeling the squeeze, with experts warning of dire consequences for the nation’s most vulnerable residents and the hospitals that serve them.
At the heart of the crisis are facilities like Columbia Memorial Hospital in Hudson, New York. Serving more than 110,000 residents scattered among two predominantly rural counties, Columbia Memorial is a lifeline for people like Bari Senecal, a construction worker who recently survived a three-story fall. "I do construction. I fell three stories," Senecal explained to a reporter, describing how a new hire’s mistake on a scaffold led to her accident. Like 70 million Americans, Senecal qualifies for Medicaid, and she’s also eligible for Medicare, making her one of the nation’s "dual-eligible" patients.
But Columbia Memorial’s CEO, Dorothy Urschel, paints a bleak financial picture: "We run a deficit every year. For many, many years, we’ve been reimbursed at well below cost." The hospital, which already closed its maternity ward in 2020—a move emblematic of a nationwide trend—relies on government programs for 63 percent of its patient service revenue. According to a recent study in the Journal of the American Medical Association, more than half of rural counties now lack hospital-based obstetric services.
The threat to rural healthcare has been sharpened by the new law’s $911 billion reduction in federal Medicaid spending over the next decade, as reported by the nonpartisan Congressional Budget Office. An estimated 10.3 million people are expected to lose their Medicaid health insurance, and when cuts to the Affordable Care Act (ACA) are included, that number rises to 16 million. Larry Levitt, vice president for health policy at the Kaiser Family Foundation, described the measure as "the biggest rollback in federal support for health coverage ever."
While the law’s most severe impacts are staggered to avoid immediate political repercussions, the effects are already rippling through rural America. Michael Chameides, a member of the Columbia County Board of Supervisors, warned, "Some rural hospitals around the country have already started closing" in anticipation of the cuts. Senator Ed Markey of Massachusetts released a list of 338 rural hospitals at risk of closure or drastic service reductions, all of which had experienced three consecutive years of negative profit margins and served a high proportion of Medicaid patients. States like Kentucky, Louisiana, and California top the list, with 35, 33, and 28 hospitals identified as at risk, respectively. New York has 11, including Garnet Medical Health Center Catskills in the Hudson Valley.
According to the Government Accountability Office, more than 100 rural hospitals have closed nationwide over the past decade, with 50 shuttering in just the last eight years. As federal support wanes, state governments must decide whether to step in or watch these vital institutions collapse.
The crisis isn’t limited to New York. In North Carolina, Medicaid faces a $319 million funding shortfall that has forced Democratic Governor Josh Stein’s administration to announce reimbursement rate cuts for doctors, hospitals, and other providers, effective October 1, 2025. These cuts range from 3% for home health and ambulance services to 10% for hospitals, nursing homes, and hospice care. The reductions will impact 3.1 million Medicaid enrollees in the state.
"This will lead to longer wait times, delayed diagnoses and worse health outcomes for the patients of our state, especially for those who live in rural communities and who are already marginalized and underserved," Dr. Jenna Beckham said at a Raleigh health clinic, as reported by the Associated Press. Governor Stein placed blame squarely on the Republican-controlled legislature, stating, "They put their political disputes ahead of our people’s health. Their disagreements have nothing to do with Medicaid. It’s hard for me to express the gravity of their failure."
Republican lawmakers, for their part, argued that Stein’s decision to implement the cuts was premature and unnecessary. "The governor has decided with very little notice to threaten not us but the North Carolina residents needing health care with massive cuts that will begin months before they have to," said Rep. Grant Campbell, a physician and GOP member of the state House. Meanwhile, legislative gridlock persists, with competing bills to increase Medicaid funding by $190 million annually failing to produce a final agreement before the next session on October 20, 2025.
Governor Stein and his allies warn that President Trump’s July 2025 spending-cut law further threatens Medicaid enrollment for hundreds of thousands of North Carolinians and the financial stability of rural hospitals. While Republicans downplay these concerns, diminishing federal funds have forced even cautious lawmakers to reconsider their fiscal strategies.
California is facing its own healthcare cliff. As reported by The McClatchy California Editorial Board, about 4 million Californians are expected to lose Medicaid coverage as a result of federal cuts, while another 1.7 million Covered California enrollees will see their premiums spike by 66% in 2025 due to expiring ACA tax credits. Over 70 hospitals in the state are on the verge of bankruptcy, with more than half of all California hospitals operating in the red, according to Carmela Coyle, president and CEO of the California Hospital Association.
Community health centers and clinics are also struggling. Francisco Silva of the California Primary Care Association noted that about 850,000 patients will lose coverage due to new eligibility requirements. Jodi Hicks, CEO and president of Planned Parenthood of California, warned that 80% of their patients rely on Medicaid, and the group is facing a loss of $304 million in federal reimbursement. "This will result in downsizing of staff in education and community outreach in an effort to preserve patient services," Hicks said.
Dustin Corcoran, CEO of the California Medical Association, expressed concern that more physicians will leave their practices because of Medicaid cuts and the elimination of health insurance tax subsidies. In the last five years, there has been a 39% reduction in independent physician practitioners in the state.
Efforts to restore Medicaid funding and extend ACA subsidies have stalled in Congress. Merced Democrat Adam Gray introduced HR 4849 to restore Medicaid funding, but the GOP has not supported the bill. Democrats have proposed extending federal tax credits used by 19.3 million Americans to purchase health insurance through the ACA Marketplace, but Republicans have largely opposed these measures. House Speaker Mike Johnson sent representatives home until October 6, and President Trump canceled a meeting with Democratic leaders to discuss the proposals.
Gray, who represents California’s 13th Congressional District—where 59% of residents rely on MediCal and another 4% use premium subsidies—summed up the frustration: "The reality is (Republicans are) decimating health care for the American people. This is about destroying the progress we’ve made in trying to improve our healthcare system and the way it delivers services across the country." The rural poor, especially in areas like the San Joaquin Valley, are expected to bear the brunt of these changes, as the loss of insurance and community clinics will push more people to emergency rooms for care.
As the nation grapples with these sweeping Medicaid cuts, the fate of rural hospitals and millions of low-income Americans hangs in the balance—caught between political gridlock, shrinking budgets, and the relentless demands of public health.
