How Medicaid cuts threaten rural healthcare

Many of the 66 million Americans who live in rural, tribal and geographically isolated areas rely on Medicaid for basic healthcare services. As Congress considers $880 billion in Medicaid cuts over the next decade, the implications for rural hospitals and their surrounding communities are dire. Nurses from AFT affiliates in Alaska, Montana and Washington state warn of the real-world consequences of these potential cuts, highlight the financial pressures that rural healthcare professionals face, the effects on patient access to care, and the broader economic implications.

Rural hospitals are heavily reliant on Medicaid funding. The average hospital counts on Medicaid payments for about 20 percent of its revenue, with an even greater share going to safety-net hospitals in low-income and rural areas.

Shannon Davenport, president of the Alaska Nurses Association, stresses the critical role of Medicaid in her state, where over 30 percent of patients rely on it for healthcare. She warns of increasing nurse shortages and the dire consequences for rural Alaskan communities, many of which have only one nurse covering a 100-mile radius or more in places with limited resources.

“I worry about our patients in our rural areas,” Davenport says, “because a lot of times Medicaid is their only option, and once you take that away, what do they have left?” People who work in those areas may be pulled from those areas because they are Medicaid funded, and then patients have no access to healthcare.”

Since 2005, more than 150 rural hospitals have closed. Last year, more than 400 rural hospitals were at risk of closing. If Medicaid funding is cut, many hospitals will be forced to reduce services, limit operational hours, or close entirely. Obstetric care is often the first to be eliminated, with fewer than half of all U.S. rural counties currently offering hospital-based maternal services. Staffing shortages will get worse because hospitals facing budget cuts frequently reduce labor costs first. Cutting Medicaid will reduce both healthcare and non-healthcare employment; nurses, doctors and other healthcare professionals may be forced to compete for jobs in hard-hit communities or leave rural areas in search of more stable employment in urban and suburban hospitals and clinics, although they also are experiencing staffing reductions due to Medicaid cuts.

In Washington state, registered nurse Julia Barcott expresses concern about what potential funding cuts would mean in Yakima County, where she works and where 68 percent of patients are covered by Medicaid. The reliance on Medicaid could mean the loss of many rural healthcare providers.

“We rely highly on Medicaid for our patients, and there aren't enough physicians, nurse practitioners, primary care doctors already.” If patients are on Medicaid, for-profit hospitals and clinics don't necessarily want them, so they won't accept anyone on Medicaid. “So, they will come to the ER for their care, which is not cost-effective,” says Barcott who is vice president of the board of directors for the Washington State Nurses Association. “There's going to be a few generations that will not have access to nearly as much care, because there won't be the health professionals out there,” she says.

Medicaid cuts don’t just affect hospitals—they leave people without essential care. People who lose Medicaid often delay treatment, worsening their conditions and increasing ER overcrowding, which means that emergency departments—already stretched thin—will bear the brunt of this crisis.

“During COVID, people didn't come in because they lost their coverage with their employment loss, and when we finally saw people, they were really sick,” Barcott says. “I see that exact thing happening if we have Medicaid cuts; people aren't going to come in and when they finally are able to come in, it's too little, too late.” 

The Affordable Care Act’s Medicaid expansion has been vital in keeping rural hospitals financially stable. States that expanded Medicaid saw a 62 percent lower risk of rural hospital closures compared with non-expansion states. Without Medicaid support, hospitals face severe funding gaps, jeopardizing services such as obstetric care, emergency services and specialty care.

Vicky Byrd, chief executive officer of the Montana Nurses Association and an AFT vice president says that Montana has successfully used Medicaid expansion to strengthen its healthcare system, expand specialty care and boost economic growth. The risk of reversing these gains underscores the need for continued advocacy and funding.

No hospitals in Montana have closed since expansion was implemented, with expansion a prime contributor to sustaining Montana hospitals' financial health, says Byrd.

“If Medicaid is cut, the cost of uncompensated care for hospitals would increase substantially,” she says. “Over the last eight years, expansion has impacted all Montanans—through benefits to the state budget, increases in healthcare service offerings, new sources of jobs and personal income, and better health for enrollees. The ripple effects of losing expansion would be felt by many Montanans, not only those covered by the program.”

Medicaid cuts threaten the viability of rural hospitals, the accessibility of essential healthcare services and the economic stability of rural communities. Without Medicaid, millions of Americans will struggle to get necessary medical care, leading to worse health outcomes and increased mortality rates. That’s why healthcare professionals and advocacy groups are fighting for rural hospitals, but they need widespread support.

“I think the issue is everybody thinks it's somebody else who is on Medicaid, and it's not.” There are a lot of people who are on Medicaid, such as families with two incomes, but they don't work full time; and the insurance copay is more than they make in a month, Barcott says. “So, even though they're working families, they're barely making it.”

Davenport echoes the urgency: “I have been to a couple of the rallies about the Medicaid cuts here in town with our unions and others, along with people from the community and our patients. We stand in solidarity for what’s right. This isn’t about politics, it’s about people. If we don’t fight for rural healthcare, who will? It's time for [legislators] to actually listen to what people are saying: These Medicaid cuts are wrong.”

[Adrienne Coles]