Earlier this summer, the landscape of American health care and scientific research shifted dramatically, following two major decisions by President Donald Trump’s administration. On August 7, 2025, Trump signed an executive order that hands sweeping new authority over federal grantmaking to political appointees, while just weeks earlier, he enacted the One Big, Beautiful Bill Act, slashing nearly $1 trillion from Medicaid. Together, these moves have sent shockwaves through hospitals, research institutions, and communities across the country—especially in rural America, where the effects are already being felt.
For rural hospitals, the Medicaid cuts are nothing short of seismic. Medicaid, a joint state and federal program, underpins health care for millions of low-income adults, children, and people with disabilities. According to HuffPost, the One Big, Beautiful Bill Act is expected to strip coverage from an estimated 12 million people nationwide. Alan Morgan, CEO of the National Rural Health Association, emphasized the breadth of the impact: “There are 60 million rural Americans, and every single state has at least one rural area, so these Medicaid funding cuts will impact hospitals in every state, whether Kansas, California, Maine, Virginia, New York or wherever.”
Hospitals rely on Medicaid for a significant chunk of their revenue. Alan Condon, editor-in-chief of Becker’s Healthcare, explained, “Medicaid accounts, on average, if we take a snapshot of hospitals across the country, it could be anywhere from 15% to 25% of their total revenue.” For safety-net hospitals—those serving the uninsured and Medicaid recipients—the figure can soar as high as 60%. The situation is even more acute in rural America, where one in four residents depends on Medicaid. Morgan described the reality: “Rural America is older, it’s sicker, it’s poorer, and it has a population with high health needs, and in many cases, the inability to pay for health services.”
Even before these latest cuts, rural hospitals were struggling. “Before this bill was passed, 45% of rural hospitals were already operating in red, so you’ve got nearly half of all rural hospitals operating at a loss before any cuts, and as a result of that, roughly 300 rural hospitals are at risk for closure now,” Morgan noted. The removal of the Direct Payment Program, which previously provided extra funds to struggling rural hospitals, has only deepened the crisis. Laura Dyrda, vice president of editorial at Becker’s Healthcare, pointed to states like Oklahoma, where around 97 hospitals already have negative operating margins and a large population of Medicaid beneficiaries. “They could have to cut services,” she said.
And it’s not just hospital doors that are closing. As finances tighten, rural hospitals are forced to make painful decisions about which services to cut first. “What we’ve seen is as finances get more dire, rural hospitals begin to eliminate service lines—usually the first two that are eliminated are maternity care and behavioral health,” Morgan said. Condon added that these critical services are generally not profitable, which is why Medicaid funding is so crucial to keeping them available in underserved communities.
The human cost doesn’t stop at lost health services. With hospitals closing or scaling back, layoffs are inevitable. Doctors, nurses, administrators, and support staff—often the largest employers in their counties—are all at risk. Condon predicted, “We’ll unfortunately see a lot more layoffs in some of these hospitals [and] health systems across the country as they try and balance the books to make up the gap.” The ripple effects extend far beyond the hospital walls, threatening the economic stability of entire rural communities.
Lawmakers from both parties recognized the looming crisis and included a Rural Health Transformation Program in the One Big, Beautiful Bill Act. The program sets aside $50 billion over five years to help rural health systems weather the storm. But as Morgan pointed out, this is a drop in the bucket compared to the $155 billion in cuts rural hospitals face over the next decade. “And this is $50 billion set aside over five years, so, you’re moving out $155 billion over 10, and you’re putting back $50 billion over five. Those are not the same,” he said. The details of how the new funding will be distributed remain murky, and many health leaders doubt it will be enough to prevent widespread closures and service cuts.
Some might think these problems are confined to rural areas or Medicaid recipients, but experts warn that the consequences will spill over into urban hospitals as well. As rural facilities close or slash services, patients will be forced to seek care elsewhere, straining emergency departments, intensive care units, and charity care budgets in cities. “It definitely will significantly and more acutely impact the rural facilities, but that will also, of course, trickle down to some of those urban facilities,” Condon said. The end result? A sicker America, with essential health care harder to access for everyone.
While the Medicaid cuts have dominated headlines, the Trump administration’s new executive order on federal grants could reshape the nation’s scientific landscape just as profoundly. The order, signed on August 7, 2025, gives political appointees unprecedented power over billions of dollars in grants awarded by agencies such as the Federal Emergency Management Agency (FEMA), the National Science Foundation (NSF), and the National Institutes of Health (NIH), according to the Associated Press.
The order requires all federal agencies to appoint officials responsible for reviewing funding opportunities to ensure they align with “agency priorities and the national interest.” It also allows grants to be terminated at any time—even in the middle of a project—and blocks agencies from announcing new funding opportunities until the new protocols are in place. The administration argues that these changes will “strengthen oversight” and “streamline agency grantmaking.”
But scientists and research advocates are sounding the alarm. Joseph Bak-Coleman, a University of Washington scientist, put it bluntly: “This is taking political control of a once politically neutral mechanism for funding science in the U.S.” The Association of American Medical Colleges warned that the new requirements will delay grant review and approval, slowing “progress for cures and treatments that patients and families across the country urgently need.”
The impact is already being felt. The administration has terminated thousands of research grants at agencies like the NSF and NIH, including studies on transgender health, vaccine hesitancy, misinformation, and diversity, equity, and inclusion. Experts warn that the order could also affect emergency relief grants from FEMA, public safety initiatives funded by the Department of Justice, and public health efforts supported by the Centers for Disease Control and Prevention (CDC). Legal challenges are expected, but for now, uncertainty reigns.
For many, these changes raise profound questions about the future of American health care and scientific leadership. Decisions made in Washington—sometimes with little fanfare—are shaping the lives of millions, from rural families facing hospital closures to researchers whose work may never see the light of day. As Morgan observed, “I think the general public just thinks, ‘That’s not my problem, that’s a Medicaid problem.’ They don’t realize that this is about their hometown hospital.”
As the dust settles on these sweeping policy changes, communities large and small are left to grapple with their consequences—hoping that their voices will be heard before the next round of decisions is made.
