• Posted May 16, 2025

Republican Medicaid Cuts Could Cause Rural Hospital Closures, CEOs Warn HealthDay TV

FRIDAY, May 16, 2025 (HealthDay News) — Proposed cuts to Medicaid could be devastating to America’s rural hospitals, health care CEOs are warning in interviews with HealthDay.

House Republicans have proposed an $880 billion reduction in Medicaid funding. Combined with other health care cuts, the package could leave as many as 8.6 million people uninsured, according to the Congressional Budget Office.

These cuts would land hardest upon rural hospitals, which already are teetering on the financial brink, executives say.

“The vast majority of our payers are governmental whether that be Medicare or Medicaid, right?” Craig Thompson, CEO of Golden Valley Memorial Healthcare in Clinton, Mo., told HealthDay TV. “We're very concerned about discussions around reducing reimbursement and reducing payments to providers.”

More than 300 rural hospitals are at immediate risk of closing due to the severity of their financial problems, according to the nonprofit Center For Healthcare Quality & Payment Reform.

These include 26 in Kansas; 24 in Oklahoma; 22 in Alabama; 21 in Texas; 19 in Mississippi; 16 in New York; 15 in Tennessee; 12 in Pennsylvania; 10 each in Arkansas and Georgia; and 9 in Missouri, the center says.

Part of the problem is that Medicaid already doesn’t adequately pay hospitals for care provided to patients, said Lori Wightman, CEO of Bothwell Regional Health Care in Sedalia, Mo.

“We are reimbursed 65 to 75 cents on the dollar, so you can't make that up in volume, not if you're going to keep going,” Wightman told HealthDay TV. “So we have always been trying to be very conservative with how we spend our resources and there's really not a lot of give.”

Steve Purves, president and CEO of Valleywise Health in Phoenix, shares those fears.

“Over 50% of our revenue comes from the Medicaid program,” Purves said. “We serve a wide swath of very vulnerable patients. We're a safety net system of care.”

Thompson and Wightman said they’re worried that important programs like maternity care might not survive the Medicaid cuts.

“For most rural hospitals in Missouri, the primary payer for those services is Medicaid, both for mom and for baby,” Thompson said. “And it's already a stressed service line for all of us that are in rural Missouri to provide maternity services. And if we see further cuts to Medicaid and Medicaid reimbursement, I worry that additional maternity deserts will form across the state.”

That safety net includes other types of essential programs, Purves said.

“We have food pharmacies, for example, to make sure that people's nutrition, which impacts their health, is what it needs to be,” Purves said. “We have pharmacies in our community health centers — programs to support low-income individuals for access to their pharmaceuticals are being discussed to be cut.”

Along with cuts to Medicaid funding, Republicans also have proposed ending tax credits that help people purchase health insurance through Affordable Care Act marketplaces.

“That's another thing that we have concern about right now as it relates to the marketplace plans, because those are under some scrutiny right now,” Thompson said. “And there is real benefit to those plans in terms of providing those subsidies to make the cost of that insurance affordable, so that those individuals can access primary care and be able to address those types of illnesses while they're in the acute phase as opposed to when they get to the chronic phase. They become then either life-threatening or they prevent someone from being a productive member of society and continuing to work and do those type of things.”

All three CEOs agreed that there are inefficiencies and waste that should be addressed, but they argue that wholesale cuts are not the way to fine-tune America’s health care systems.

“Funding of Medicaid is absolutely critical to provide access to high-quality care for the most vulnerable in our communities, and we want to protect that,” Thompson said.

More information

The Center For Healthcare Quality & Payment Reform has more on rural hospitals at risk.

SOURCE: HealthDay TV, interviews, May 15, 2025