Federal Medicaid Cuts Would Force Rural Hospitals to the Brink of Closure

To highlight the impact of looming Congressional Medicaid cuts on hospital finances across the country, and particularly in rural communities, Families USA conducted a new analysis to estimate the potential losses in hospital revenue among independent rural hospitals. The results of this analysis make clear that bureaucratic red tape from national work reporting requirements and overly frequent eligibility checks for people covered by Medicaid expansion — just two of the many proposed cuts to federal Medicaid funding — would directly harm the more than 700 independent rural hospitals delivering lifesaving care across the country, putting them at significantly greater risk of closure or acquisition by large corporate systems.

Key Findings:

• Independent rural hospitals could lose an estimated $465 million in total patient revenue in 2026 due to federal Medicaid cuts — an average loss of $630,665 per hospital.
• Independent rural hospitals could lose, on average, 56% of their yearly net income due to these revenue losses.
• As a result of these Medicaid cuts, 55 additional independent rural hospitals (a 17% increase) could experience negative net incomes in 2026 across 26 states, leaving a total of 380 independent rural hospitals nationwide at serious risk of closure.
  • Among those 55 additional hospitals newly at risk of closure, five are in Ohio, four are in Missouri, two are in Iowa, two are in North Carolina, two are in Maine, and one is in West Virginia.