A sweeping Medicaid overhaul proposed in the GOP’s new “Big Beautiful Bill” could result in up to 10.9 million Americans losing health insurance over the next decade, according to projections from the Urban Institute. The legislation includes over $785 billion in cuts to Medicaid funding, prompting alarm among rural healthcare leaders who say the changes could force hundreds of small hospitals to close.
The Bill at a Glance
The plan seeks to:
- Convert Medicaid into block grants administered by states
- Freeze provider reimbursements at 2024 levels
- Cap Medicaid eligibility for adults at two years unless working full-time
Republicans argue this will rein in federal spending and give states greater flexibility. But hospital associations, health economists, and rural lawmakers warn it would do irreversible damage to care access in underserved areas.
Rural Hospitals in Crisis
Over 400 rural hospitals in the U.S. operate on razor-thin margins. Medicaid makes up between 35% and 60% of patient revenue for many of these facilities. Cuts would strip that funding, leaving hospitals unable to pay staff, stock medications, or stay open.
In Kansas, the state hospital association says at least 14 rural hospitals are already at risk—and that number could triple under the new Medicaid formula.
In Alabama, Mississippi, and Oklahoma, similar patterns are emerging: delayed Medicaid reimbursements, closed maternity wards, and staff layoffs.
Medicaid Work Requirements Could Strip Coverage From 5 Million Americans
Who Would Lose Coverage?
- Low-income adults without employer insurance
- Working-class families whose jobs don’t offer coverage
- Disabled and chronically ill individuals who rely on long-term services
- New mothers in states with recent postpartum expansion programs
The Congressional Budget Office estimates that at least 10.9 million people would fall off Medicaid rolls if the bill passes. Some would qualify for marketplace subsidies, but many in states that didn’t expand Medicaid would have no options.
What Healthcare Experts Say
Health policy analysts warn that:
- States might use block grant funds to balance budgets instead of funding care
- Emergency room visits and uncompensated care would spike
- Rural closures would force patients to travel 2–4 hours for basic treatment
One rural ER nurse in Missouri said, “We’re already short-staffed. If Medicaid gets cut further, we’re done. People will die waiting for care.”
Political Outlook
The bill has passed the House Budget Committee and is scheduled for Senate markup next week. While it faces opposition from Democrats and moderate Republicans, a growing number of GOP lawmakers support the plan as a necessary cost-cutting measure.
However, President Biden has vowed to veto any bill that reduces Medicaid access, and legal challenges are expected if the program is block-granted.
What’s Next?
- Senate hearings will begin this month
- Rural hospital associations are launching an advocacy blitz
- Governors from swing states are expected to weigh in publicly
- Healthcare coalitions are preparing legal frameworks to challenge block grants
Bottom Line
The proposed Medicaid cuts could fundamentally reshape the American healthcare system—especially in rural communities already hanging by a thread. With millions at risk of losing coverage and hundreds of hospitals facing closure, the battle over this bill will define healthcare policy for years to come.
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