How Will Medicaid Changes Impact Rural Healthcare?

By Gordon Hopkins
Among the many elements in the recently passed 1,000-plus-page budget reconciliation bill are significant changes to Medicaid eligibility.
The “One Big Beautiful Bill Act,” as it has been called by President Donald Trump and is now formally titled, was signed into law by the President on July 4.
Are The Medicaid Cuts Actual Cuts?
Medicaid provides government-sponsored health care for low-income and disabled Americans. This bill increases restrictions on Medicaid eligibility by creating work-requirements and more frequent eligibility checks.
The Congressional Budget Office has estimated the bill will result in 11.8 million Americans losing health coverage under Medicaid over the next decade.
According to a report released in May of 2025, by the University of Nebraska Medical Center (UNMC):

• As of December 2024, 364,256 Nebraskans (17 percent of the population) were enrolled in Medicaid.
• Children make up 49 percent of enrollees (179,000), followed by adults (35 percent), disabled individuals (10 percent), and seniors (6 percent).
• Medicaid spending in SFY 2024 exceeded $4 billion, with 70 percent funded by the federal government.
• Nearly 80 percent of Medicaid expenditures go to hospitals (37 percent), physicians (16 percent), pharmacies (25 percent), and behavioral health services (13 percent).
  That report also concludes that the bill will cut “$880 billion over 10 years” in Nebraska.
  However, some lawmakers refute the suggestion that these changes amount to cuts at all but merely root out fraud and abuse. At a press conference in June, U.S. Representative Don Bacon said of the critics of the bill, “They’re opposed to work requirements for people on Medicaid that are able bodied adults, have no children or no small children. Seventy-two percent of Americans support work requirements. We expect, if you’re able bodied adult without children, that you should be seeking a job or getting the skills to get another job.”
  According to KFF, formerly known as The Kaiser Family Foundation, the majority of Medicaid recipients are already working and the increased requirements to continually prove eligibility will likely get people kicked off of Medicaid. KFF polling released in March of this year indicates, “For example, a majority (62 percent) of the public incorrectly believe that most working-age adults on Medicaid are unemployed, and some people change their views on imposing work requirements when they hear about the potential implications. Overall support for work requirements drops from 62 percent to 32 percent when those who initially support the proposal hear that most people on Medicaid are already working and many would risk losing coverage because of the burden of proving eligibility through paperwork.”
  Local Reaction
  Rural hospitals are bracing for the impacts of the bill, which are not yet known.
  When asked how this might impact Jefferson Community Health & Life (JCH&L) CEO Holly Wolff advised FJN, “The budget reconciliation bill is going to have a negative impact on rural communities and the local hospitals that serve them. At the moment, we only have estimates of the impact that may be seen in access to care, essential services, and potential for higher health insurance costs. The economic stability of JCH&L is our primary focus while we determine the overall impact of this bill. JCH&L is currently financially secure, and we intend to maintain that position of stability to continue offering the services that are established and essential.”
  FJN has reached out to other area hospitals for reaction but has not received a response as of press time.
  Rural Hospitals
  Rural hospitals were struggling long before passage of this bill. A recent report from Chartis, a health care advisory organization, concluded that 432 hospitals nationwide are vulnerable to closure, including 21 to 25 percent of hospitals in Nebraska.
  The UNMC report cites two main reasons why rural hospitals are more vulnerable to major reductions in Medicaid spending:
• “First, people who live in rural areas are more likely to be covered by Medicaid than their urban counterparts.”
• “Second, on a per capita basis, there are already fewer services in rural areas, so significant reductions in Medicaid spending would further reduce the availability of services.”
  The report also notes this does not just impact those on Medicaid. Fewer services and hospital closures means everyone will have to travel farther more medical treatment.
  Jed Hansen, executive director for the Nebraska Rural Health Association, warned, “In any given year, approximately 50 percent of our hospitals are going to operate at a negative margin, with 10-20 percent of those hospitals operating at a negative margin for greater than three years, making them prime for closure.”
  Hansen cited the words of Tyler Sherman, an advanced practice registered nurse with Webster County Community Hospital in the city of Red Cloud, “With the Medicaid cut, these rural hospitals that are already working at a loss likely will be closed within 24 months of the of the shutdown for the Medicaid funding,” Sherman said. “And with the closure of the rural hospitals, patients are going to need to travel further for their care. This includes lifesaving services. So if you call the 911 with a heart attack, it’s going to be 45 minutes to 50 minutes before you get to the nearest hospital that’s open, versus five minutes with Webster County Hospital.”
  Nebraska Delegations
  Despite the criticism and fears, all five of Nebraska’s federal delegates voted for the bill and have released statements expressing full support.
  U.S. Senator Pete Ricketts said in a press release, “Most of all, this is a win for families in Nebraska—creating a brighter future for our country.”
  U.S. Senator Deb Fischer wrote in a statement upon passage by the Senate, “Last November, Americans spoke loud and clear: they want safer communities, lower energy costs, and real relief for working families. Today, the Senate delivered—blocking a $4 trillion tax hike and investing in border security to keep America safe.”

Twinrivers