Across the United States, a wave of federal funding cuts under the Trump administration's sweeping "One Big Beautiful Bill Act" is reshaping the landscape of health and social services, with rural hospitals, vulnerable populations, and specialized programs all feeling the effects. As the dust settles from a summer of policy shifts and budgetary maneuvers, communities from New Mexico to Florida and Wisconsin are scrambling to adapt, with many fearing that the safety net for America’s most at-risk residents is unraveling.
For decades, Medicaid and Medicare have been the backbone of health care in rural America, where residents face disproportionately high rates of chronic disease, mental health challenges, and barriers to care. According to the Centers for Disease Control and Prevention, rural communities are at greater risk for conditions like heart disease, cancer, and stroke, and contend with elevated rates of suicide and drug overdoses. It’s no surprise, then, that rural hospitals rely heavily on Medicaid funding to keep their doors open.
But in the summer of 2025, the Trump administration announced deep cuts to Medicaid—$911 billion over ten years, according to the nonpartisan KFF—triggering alarm bells in rural states. To soften the blow, federal officials rolled out the Rural Health Transformation Program, a $50 billion fund to be distributed over five years. Each year, $10 billion will be available, with half split equally among participating states and the remainder allocated based on rural population, health facility numbers, and other metrics. Still, as KFF notes, this program will only offset a little over a third of the Medicaid cuts.
States are now racing to apply for their share of the fund before the early November deadline. In New Mexico, where more than 878,000 people are enrolled in Medicaid and over 20% live in rural areas, the stakes are particularly high. State Representative Rebecca Dow emphasized the urgency: “Other states that have strong revenues have not made themselves as federally dependent on Medicaid funds as New Mexico has. So what we have the opportunity here to do is to work with the federal administration, find and identify our gaps, and fill those gaps with these federal opportunities.”
Yet, for rural hospitals already operating on razor-thin margins—or, as in the case of Holy Cross Medical Center in Taos, New Mexico, at a loss of $2.5 million a year—the promise of new funding offers little comfort. CEO James Kiser didn’t mince words: “Most rural hospitals operate at a slight loss, and we’re one of those. If the (‘Big Beautiful Bill’) plays out as the language initially states, we will feel it, and it will shut us down because it will leave a large population without care.” Kiser urged lawmakers to “make some difficult political decisions and do the right thing,” warning, “If we don’t have access to a portion of that $50 billion, we are going to flip upside down.”
The fear isn’t limited to hospitals. Christina Solberg, a nurse practitioner who recently opened Inspire Psychiatry Services in Silver City, New Mexico, described the looming threat to behavioral health clinics: “It would be systemic chaos and tragedy. If the majority of our clients were to lose their Medicaid, we would probably have to shut doors because we don’t serve the rich in this community.” Solberg worries about the safety of patients if resources dry up: “Sometimes we can really lose people fast, really fast.”
The ripple effects extend far beyond New Mexico. In Florida, President Trump’s "Big Beautiful Bill" is set to slash $3.8 billion from the state’s health care system, with hospitals bearing the brunt. Florida’s Medicaid director Brian Meyer informed lawmakers that five state programs currently receiving $9 billion in state-directed payments will see that figure drop to $5.2 billion by 2034-2035. The new law caps state-directed payments to hospitals at 110% of Medicare starting in 2028, with annual 10% reductions for programs above that cap. The Hospital Directed Payment Program alone, which receives $8.1 billion for 2025-26, will face a $3.5 billion cut by 2034.
Other Florida programs, including the Physician Supplemental Payment Program and the Cancer Hospital Programs, are also slated for hefty reductions. Meyer explained the mechanics to the House Health Care Facilities and Systems Subcommittee: “What this provision does is any state directed payments that are above 110% of Medicare beginning in 2028 will start stepping down annually 10% a year until you get to the 110% of Medicare threshold.” As the state legislature gears up for its 2026 session, access and affordability of health care are front and center.
Meanwhile, the Trump administration’s cost-cutting extends to programs serving the nation’s most vulnerable. On August 18, 2025, federal support ended for the SOAR program, which trained caseworkers to help disabled Americans access Supplemental Security Income (SSI)—a lifeline for those unable to work. According to Axios, SOAR-trained caseworkers helped about 3,000 people in 2024 alone, connecting them not just to SSI but also to housing, Medicaid, and food assistance. The program, costing just $2.6 million a year, boasted a 65% approval rate for SSI applicants it assisted—double the national average.
Without federal funding, states are now left to shoulder the burden, just as they are with other programs affected by the "One Big Beautiful Bill Act." Many states, already stretched thin, may not be able to fill the gap. Yvonne Perret, who developed the SOAR model, lamented to Axios, “We’re talking about assisting the most vulnerable folks in the country; the cost was not much compared to the complexity and need.” Experts warn that without SOAR, more disabled Americans could fall through the cracks, risking homelessness and even incarceration—a cost to society that may well exceed the modest savings from the cut.
The administration’s approach has also touched off controversy in the realm of special education. In Wisconsin, the Department of Public Instruction announced on October 8, 2025, that it had secured one year of emergency funding for its deafblind program after the Trump administration abruptly canceled a five-year federal grant. The original grant, worth about $183,000 per year, was pulled in August 2025 because the program’s diversity hiring goals were deemed inconsistent with administration policies. The National Center on Deafblindness, using funds from the Biden-era Department of Education, stepped in to provide a temporary lifeline—but only through September 2026.
State Superintendent Jill Underly expressed both relief and frustration in a press release: “Families should never be put in a position where they’re left wondering if essential services will simply vanish. While this is a win for Wisconsin’s deafblind learners and their families, it does not erase the reality that many were met with uncertainty and chaos just as the school year began.” The Wisconsin program, serving 170 deafblind youths, is the only one of its kind in the state, offering support from birth through adulthood.
As federal priorities shift and funding streams dry up, a patchwork of state responses and stopgap measures is emerging. But for many families, patients, and providers, the uncertainty is the hardest part. The question now is whether state and federal leaders can find common ground to preserve the essential services that millions of Americans rely on—or whether the nation’s most vulnerable will be left to fend for themselves.
