Over 300 Rural Hospitals at Disproportionate Risk of Closure, Conversion, or Service Reductions
Lawmakers Also Provided Data to President Trump, Leader Thune, and Speaker Johnson in Letter
Letter and Data | Sheps Response
Washington (June 12, 2025) – Following House Republicans’ passage of a bill that would impose the largest cuts to health care in U.S. history, slashing funding for Medicaid and the Affordable Care Act by more than $1 trillion and triggering more than $500 billion in Medicare cuts, Senator Edward J. Markey (D-Mass.), Ranking Member of the Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Retirement Security, Democratic Leader Chuck Schumer (D-N.Y), Senator Ron Wyden (D-Ore.), Ranking Member of the Finance Committee, and Senator Jeff Merkley (D-Ore.), Ranking Member of the Budget Committee, released detailed data from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill concluding that Republican health care cuts could place over 300 rural hospitals across the U.S. at disproportionate risk of closure, conversion, or service reductions. The data is based on financial indicators including: share of Medicaid patients served, previous years of negative total margins, and data modeling on future financial distress.
The lawmakers also sent the data in a letter to President Trump, Leader John Thune, and Speaker Mike Johnson, writing, “Addressing the crisis in rural health care access is a national, bipartisan priority, and it should be bipartisan to not worsen that crisis. However, if your party passes these health care cuts into law, Americans in rural communities across the country risk losing health care services and jobs supported by their local hospitals. We urge you to read the attached report and reconsider your position. It is not too late to stop these cuts. Billionaire tax breaks are not worth the cost to American lives and livelihoods.”
The response from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill states, “Substantial cuts to Medicaid or Medicare payments could increase the number of unprofitable rural hospitals and elevate their risk of financial distress. In response, hospitals may be forced to reduce service lines, convert to a different type of health care facility, or close altogether.” The data shows the following regarding at-risk rural hospitals:
In the face of these Republican cuts, a majority of adults living in rural areas are concerned that health care cuts will “negatively impact hospitals, nursing homes, and other health care providers in [their] community.” Rural hospitals are struggling; in 2023, there were 50 fewer rural hospitals than in 2017, and a lack of health care access in rural America is contributing to worse health outcomes. Faced with additional cuts to their revenue, many rural hospitals may be forced to stop providing certain services, including obstetric, mental health, and emergency room care, convert to clinics or standalone emergency centers, or close altogether. Rural hospitals are often the largest employers in rural communities, and when a rural hospital closes or scales back their services, communities are not only forced to grapple with losing access to health care, but also with job loss and the resulting financial insecurity.
“If Republicans plan to pass drastic cuts to Medicaid and Medicare and effectively repeal the Affordable Care Act, communities should know exactly what they stand to lose,” said Senator Markey. “These health care cuts won’t just kick millions off their insurance. These cuts will plunge hospitals across the country into financial chaos, and as this data demonstrates, hundreds of rural hospitals across the country may be forced to stop providing care, limit their services, or close altogether. If hospitals close, many rural communities will lose the biggest employer they have. Seniors, the disabled, and pregnant people will have to travel farther to access care. Families will lose access to care. People will die. The more information we have about this bill, the worse it seems. No life or job is worth a yes vote on this big billionaire bill. We must make sure every American can see how Republicans are willing to pay for billionaire tax breaks with people’s lives, and we must defeat this ugly bill.”
“As this report proves, the Republicans’ ‘Big, Ugly Betrayal’ is a matter of life and death for millions of Americans. The cruel and far-reaching cuts to Medicaid and the Affordable Care Act are putting hundreds of rural hospitals at risk of closure, limiting services, or mass layoffs,” said Leader Schumer. “Rural Americans already face more obstacles to getting healthcare and many are the lifeblood and major employers of their communities, all of which Republicans are risking to pay for tax cuts for billionaires.”
“As I hold town hall meetings in each of Oregon’s 36 counties, I frequently hear about struggles folks have in accessing health care in their communities. This isn’t a red state or blue state issue. Medicaid helps every state – especially rural communities,” said Senator Merkley. “More than 300 rural hospitals will be at risk of shutting down – in Oregon and across the country – if Republicans betray middle class families and make these drastic cuts to Medicaid, all so that billionaires can pay less in taxes. This is the Republican plan: families lose, and billionaires win.”
The lawmakers sent a letter to the Sheps Center director on June 4, 2025, requesting the Center’s expert analysis of how this bill will impact rural hospitals and the communities they serve, particularly inquiring about which rural hospitals in the country treat the highest share of Medicaid recipients; how many rural hospitals are currently in financial distress or at risk of closure; and if the health care cuts in the House-passed budget reconciliation bill were to become law, would the rural hospitals with the highest share of Medicaid recipients or that are currently in financial distress face risk of closure or have to reduce services.
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