In 2017 we published our first report examining the role of Medicaid in rural areas. We’ve updated the data a few times and our newest look is based on Medicaid coverage in 2020-2021. The data underscores the outsize importance of Medicaid as a source of health insurance coverage in rural areas and small towns – especially for children.

Now as states are “unwinding” pandemic related continuous coverage protections with almost five million people already disenrolled – many for procedural reasons – rural communities have much at stake.

Medicaid and CHIP cover a relatively greater share of children and adults in rural counties than in urban counties. Nationwide, almost half (47%) of children and 1 in 5 (18%) of adults rely on Medicaid coverage in small towns and rural areas (compared to about 40% of children and 15% of adults in metro areas). As substantial as these numbers are they are actually an undercount – since it is widely acknowledged by researchers that the underlying Census data source (the American Community Survey) undercounts enrollment in Medicaid. And enrollment grew in 2022 with the continuous coverage protections of the pandemic.

Some key findings:

• States in the South and Southwest including New Mexico, Louisiana and Kentucky have the highest Medicaid/CHIP coverage rates for both children and adults living in rural areas and small towns.
• Arkansas, Louisiana, New Mexico, and South Carolina have the largest share of children in rural areas and small towns covered by Medicaid with New Mexico having 9 of the 10 counties with the largest share of children (approximately 80%) covered by Medicaid.
• In addition to having the largest share of children living in rural areas enrolled in Medicaid/CHIP, Arkansas has a wide disparity between rural and metro counties with just under two-thirds (65%) of children in rural counties enrolled in Medicaid/CHIP versus half of children living in metropolitan counties. (See map below). Virginia has a similarly large disparity with less than 30% of children in metro counties covered by Medicaid/CHIP versus 45% of those living in rural areas and small towns. 
• For adults, seven rural counties nationwide have half or more of adults covered by Medicaid/CHIP and six of those counties are in Kentucky.

Medicaid helps improve coverage rates and helps rural areas and small towns maintain health care providers in areas where shortages are all too common. Access to rural health providers is especially important to women of child-bearing age and those with chronic conditions such as diabetes, depression or asthma.

But now, as states are unwinding and people are losing Medicaid coverage, the financial strain of coverage losses and higher uncompensated care costs could hit rural health systems especially hard. Children are at greatest risk of losing Medicaid coverage despite remaining eligible. During the unwinding, families in rural areas will likely be harder hit if their state mishandles the unwinding — such as failing to automatically renew as many people as possible based on existing information, disenrolling large numbers of people for procedural reasons or failing to adequately staff call centers leading to long wait times and call abandonment rates. These barriers may be even tougher for people in small towns and rural areas to overcome as they face additional barriers like having to travel further to eligibility offices and may have limited internet access.

States must take special care with rural communities as widespread loss of Medicaid without replacement health coverage will have devastating effects for children and families and have a ripple effect on the entire community by negatively impacting rural hospitals and health care providers that are already under stress.

[Interactive maps are available for all states here.]