rural Health Fund Faces medicaid Spending Cuts

⁤ ‌ Updated ‍June 28, ‍2025
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A proposed $15 billion rural health​ fund​ is under⁣ consideration by Senate Republicans amid growing concerns that federal Medicaid spending could be slashed by $119 billion in rural areas over the next ⁤decade.‍ The ⁤potential cuts stem from the​ house-passed budget‌ reconciliation bill, dubbed the One ⁤Big gorgeous bill Act.

The Congressional ⁢Budget​ Office (CBO) estimates the House bill would reduce federal ⁤Medicaid spending by $793 billion,decrease Medicaid enrollment by 10.3⁤ million, ⁤and increase the number of uninsured ⁣by ‌7.8⁤ million.senators from both parties have voiced worries about the impact on rural hospitals,​ which are already ‌facing closures.

The proposed‍ rural health​ fund would allocate $3 billion annually from 2027 ​to 2031.Half would ‍be⁤ distributed equally among states,⁣ while the Centers for⁢ Medicare and Medicaid Services (CMS) ⁣would distribute ​the other half based​ on rural population, the percentage of ​providers in rural areas, and the situation of hospitals serving low-income patients.‌ However,it ⁤remains unclear if this fund ⁣would offset potential losses for providers.

An analysis estimates that Medicaid spending in rural areas could decrease by $119 billion over 10 years, a figure far exceeding the proposed $15 billion rural health fund. This decline​ represents a 15% reduction in ⁤federal Medicaid spending ‌in rural areas. The analysis does not account ⁢for associated reductions in state ⁢Medicaid spending or the 8.2 million people expected ⁤to become uninsured due to Affordable⁢ Care‌ Act (ACA)⁢ Marketplace changes.

Twelve states with large rural populations and‌ Medicaid ‌expansion under the ACA could see the largest spending reductions, each possibly losing $4 billion or more. Kentucky⁢ faces ⁤the largest estimated reduction, exceeding‌ $10 billion ⁣over 10 years.⁣ These larger effects in expansion states are due to provisions in the House bill that disproportionately affect ‍them, such ​as work requirements and ⁣stricter eligibility determinations.

The analysis also projects‍ that⁣ approximately 1.5 million fewer people could be covered by ⁢Medicaid in⁤ rural areas by‍ 2034⁣ under the reconciliation ⁣bill. The same 12 states with the‍ largest ‌spending reductions are expected ​to experience the most significant enrollment losses, with ‌each potentially seeing declines of 50,000 or more⁣ rural⁤ enrollees.

What’s next

The ‌Senate will continue debating the budget reconciliation bill, with ongoing discussions about⁤ the⁢ size and scope of the proposed ‌rural health fund and ‍its ability to mitigate the potential⁢ impact of Medicaid spending cuts on‍ rural communities.