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States are Beginning to Grapple with Federal Medicaid Cuts Impact on Rural Health Care 

Over the past week more national media outlets published articles on the effects of federal cuts to health care passed last year by Congress and signed into law by President Trump in H.R. 1, “The One Big Beautiful Bill.”  The coverage shows how states are starting to grapple with the effects of the federal cuts to health care and many stories focus on the struggles in rural areas.  The concern is also bipartisan – the effects are being felt in both blue and red states and worries are being expressed by both Republican and Democratic legislators.

For example, in “When Voters Worry About ‘Affordability,’ Many Point to Health Care” (NYT, 3/23/2026), detailed rural clinic closings and firings of health staff in Iowa:

“Democrats are hoping the politics of health care will help them flip the congressional district just west of Ms. Miller-Meeks’s, as well. That’s where a health care company has closed clinics and laid off 67 staff members at a hospital in Des Moines, blaming the federal cuts for a projected $1.5 billion in annual revenue reductions.

The Democratic challenger there, Sarah Trone Garriott, has taunted the Republican incumbent, Representative Zach Nunn, for saying that it was “a myth” that the federal cuts would cause rural hospitals to close.

Ms. Trone Garriott, a Lutheran minister and former hospital chaplain, held a round table on health care this month in Ottumwa, where a primary care clinic that had treated generations of residents closed in February after a month’s notice.”

Another example detailed the federal funding cuts’ effect on budget battles in red states like Missouri and Idaho (“Trump cuts exacerbate budget fights in red states”, Politico, 3/25/2026):

“Federal tax cuts approved by Republicans as part of the megabill, coupled with new requirements for Medicaid and the Supplemental Nutrition Assistance Program, are costing some states as much as $450 million this year in added costs and lost tax revenue, further squeezing budgets that were already stretched thin. Legislatures are now considering cuts and reallocations, including a cut to child care subsidies in Missouri, a 5 percent reduction across state agencies in Arizona and a $22 million cut from disability services in Idaho.

“We’re stealing from Peter to pay Paul,” Idaho Republican state Rep. Jordan Redman said recently. Aligning Idaho’s state tax with Trump’s federal tax cuts is estimated to cost the state $155 million in 2026 and $175 million in 2027, according to the governor’s office. “It’s put us in a predicament where now we’re trying to figure out, ‘Ok, what programs do we keep? What programs do we cut?’””

Again focusing on rural health, a recent NPR story focused on Montana hospital’s worries that H.R. 1’s “Rural Health Transformation Program” will not prevent rural hospital closures because funds will be diverted to address other less urgent rural health needs (“A $50 billion fund to help rural hospitals could actually lead to closures and cuts”, NPR, 3/26/2026):

“Weins wishes Big Sandy could get funding from Montana’s share of the $50 billion federal Rural Health Transformation Program to renovate the hospital and direct payments to help secure its future. The state received more than $233 million in its first-year award.

But Weins’ hospital may not get the kind of help he’s seeking.

That’s because the five-year federal program focuses on new, creative ways to improve access to rural health care, not on directly funding services and renovations. And Montana is one of at least 10 states whose leaders say projects launched under the federal program could lead rural hospitals to cut services so they can continue to afford to offer emergency and other essential care.”

And there are increasing concerns about the effect of federal cuts on health care in rural eastern North Carolina (“New factories and supersized Obamacare premiums: North Carolina considers what Trump has wrought,” Politico, 3/30/2026):

“The deep GOP cuts to Medicaid, which include reduced payments to hospitals and new requirements that people using the program work, volunteer or go to school 80 hours a month, could result in hospital closures and leave hundreds of thousands of residents uninsured.

“There’s real headwinds associated with cuts to Medicaid,” said Lee Lilley, North Carolina’s secretary of Commerce. “The decline of investment at the federal level in workforce, in Medicaid, in health care delivery, frankly, and in research will have demonstrable impacts on our economy.”


The state legislature is gridlocked over how to pay its share of Medicaid costs — the program is jointly funded by the federal and state governments — and could drop coverage for the 720,000 residents who gained it in an expansion Cooper led three years ago.

“Rural eastern North Carolina is going to become a medical services wasteland,” said Randy Lansing, the town manager of Nashville, where Cooper grew up.”

These stories point to a reality setting in across the country that has little to do with partisanship and everything to do with the dry language of budgets and policy. It’s not possible to make the magnitude of cuts to health care that were passed in H.R. 1 and not see effects on the ground on health coverage, the ability of clinics and hospitals to stay open, and access to quality health services.