Cuts to Medicaid and other federal health programs proposed in President Donald Trump’s budget plan would rapidly push more than 300 financially struggling rural hospitals toward a fiscal cliff, according to researchers who track the facilities’ finances.

The hospitals would be at a disproportionate risk of closure, service reductions, or ending inpatient care, according to a report authored by experts from the Cecil G. Sheps Center for Health Services Research following a request from Senate Democrats, who released the findings publicly Thursday. Many of those hospitals are in Kentucky, Louisiana, California, and Oklahoma, according to the analysis.

Trump’s budget plan, dubbed the “One Big Beautiful Bill Act,” contains nearly $800 billion in Medicaid cuts, according to the nonpartisan Congressional Budget Office. House Republicans passed the bill in late May, and it now awaits Senate consideration.

The proposed cuts to Medicaid raise the stakes for rural hospitals nationwide, many of which already operate on razor-thin, if not negative, margins. Diminished reimbursements from the state-federal health insurance program for those with low incomes or disabilities would further erode hospitals’ ability to stay open and maintain services for their communities — populations with more severe health needs than their urban counterparts.

“It’s very clear that Medicaid cuts will result in rural hospital closures,” said Alan Morgan, CEO of the National Rural Health Association, a nonprofit advocacy and research organization.

The Senate Democrats sent a letter to Trump, Senate Majority Leader John Thune, and House Speaker Mike Johnson asking them to reconsider the Medicaid cuts.

Sen. Edward Markey (D-Mass.), one of the Senate Democrats who requested the information from Sheps, in a statement said communities should know exactly what they stand to lose if Congress approves the reductions to Medicaid.

“People will die” if rural hospitals close, he said. “No life or job is worth a yes vote on this big billionaire bill.”

The legislation passed by the House in May would require most working-age, nondisabled Medicaid beneficiaries to prove they’re working, studying, or volunteering to retain coverage, and it would cut Medicaid reimbursement to states that use their own money to extend coverage to immigrants living in the country without authorization. Also, the bill would curtail taxes that nearly every state levies on providers to help draw down billions in additional federal money, which generally leads to more money for hospitals.

The Congressional Budget Office has estimated that the bill’s Medicaid provisions would lead to 7.8 million people becoming uninsured by 2034.

Johnson, a Louisiana Republican, has repeatedly claimed that the bill’s reductions in federal Medicaid spending don’t amount to cuts to the program. “If you are able to work and you refuse to do so, you are defrauding the system,” Johnson said May 25 on the CBS show “Face the Nation.”

Hospitals that do stay afloat likely will do so by cutting services that are particularly dependent on Medicaid reimbursements, such as labor and delivery units, mental health care, and emergency rooms. Obstetric services are among the most expensive and are being eliminated by a growing number of rural hospitals, expanding the areas that lack nearby maternity or labor and delivery care. Iowa, Texas, and Minnesota had the most rural obstetrics service closures between 2011 and 2023, according to the health analytics and consulting firm Chartis, which also studies rural hospital finances.

Nearly half of rural hospitals are operating in the red and 432 are vulnerable to closure. Medicaid cuts would push them further into financial peril.

That vulnerability stems at least partly from rural Americans’ being more likely to depend on Medicaid than the general population. For instance, nearly 50% of rural births are covered by the program, compared with 41% of births overall. But Medicaid covers only about half of what private insurance reimburses for childbirth-related services. Rural health systems have been struggling to meet the needs of their communities without the cuts to Medicaid, which brings in $12.2 billion, or nearly 10% of rural hospital net revenue, according to a Chartis report from May.

Hospitals in rural areas would collectively lose more than $1.8 billion with a 15% cut to Medicaid. That loss in revenue is roughly equivalent to 21,000 full-time hospital employees’ salaries.

Rural hospitals’ margins have been deteriorating for 10 to 15 years, said Michael Topchik, executive director for the Chartis Center for Rural Health, which analyzes and consults on rural hospital finances. Ten years ago, about one-third of rural hospitals were operating in the red. That’s closer to 50% now, he said.

It’s even higher in the 10 states that did not expand Medicaid eligibility under the Affordable Care Act, with 53% of rural hospitals there already operating in the red and more than 200 vulnerable to closure.

Other policies continue to affect rural hospitals, according to Chartis. Facilities will lose $509 million this year due to a 2% Medicare reimbursement cut — what’s known as sequestration — and $159 million in reimbursement for bad debt and charity care combined.

Some rural hospitals have responded to the increasing financial pressures in recent years by joining larger networks, such as Intermountain Health or Sanford, which are connected to facilities in the Mountain West and Midwest. But about half of rural hospitals are still independent, Topchik said, and struggle with a perennial collision of low patient volume and high fixed costs.

“We can’t Henry Ford our way out of this by increasing volumes to dilute costs and reduce prices,” he said. “It’s expensive, and that’s the reason the federal government, for a long time, has reimbursed rural hospitals in a variety of manners to help keep them whole.”

Rural hospitals play an important role in their communities. They provide health care to Americans who are older, sicker, and poorer and have less access overall to providers compared with people who live in urban areas. In many cases, a local rural hospital is the largest employer in a community and can trigger substantial local economic declines if it closes.

“When you close a hospital, oftentimes, the community follows,” Morgan said.

More than 10 million Americans enrolled in Medicaid live in counties that have at least one rural hospital, according to Chartis estimates. Kentucky, Texas, New York, North Carolina, California, and Michigan have the largest estimated populations of rural Medicaid enrollees.

And while Utah is not a state identified as especially vulnerable, health leaders there are concerned about rural hospital closures if Medicaid funding is cut, said Matt McCullough, the rural hospital improvement director for the Utah Hospital Association.

Facilities in rural parts of Utah are often governed by a board made up of community members — farmers, ranchers, and business owners who care about keeping their hospitals open, McCullough said, because they were born there and their kids were born there.

“They’ll do anything to see it stay open and provide good quality care to their neighbors, family members,” he said. “It’s people that they know and care about.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons license.

Republican lawmakers in several states have resurrected and expanded the fight over whether transgender people may use bathrooms and other facilities that do not match their sex assigned at birth.

At least one bill goes so far as making it a crime for a transgender person to enter a facility that doesn’t match the sex listed on their birth certificate.

The debate has been popping up in statehouses across the nation in recent months, predominantly in conservative, rural states, including at a hearing of the Arizona Senate’s Health and Human Services Committee in February. Proponents of that state’s SB 1628, which defines “male,” “female,” and other terms through rigid definitions of biological sex, argued that women’s rights are at stake. Opponents disagreed and said the language would erase transgender people from state statute and remove legal protections.

The bill states that Arizona may provide “separate single-sex” environments for males and females, including within athletics, living facilities, locker rooms, bathrooms, domestic violence shelters, and sexual assault crisis centers, meaning that transgender women could be prohibited from entering such spaces meant for women. Researchers have found that transgender women experience assault at a rate nearly four times as high as cisgender women.

The latest round of proposals, like the one in Arizona, expand on an earlier spate of “bathroom bills,” which sought to restrict transgender people’s access to public restrooms and locker rooms. In some instances, the proposed laws would extend far beyond access to facilities by excluding trans people from state anti-discrimination laws and dictating makeup of athletic teams. Legal experts say the new bills put states at risk of violating federal anti-discrimination laws, which could throw billions of dollars in federal funding into jeopardy for states and crisis centers that receive federal grants.

At least one state — Utah — removed lines that specifically mention shelters and similar facilities because of concerns about losing federal funding.

In addition to the bill passed in Utah, lawmakers introduced similar bills in Idaho, Georgia, Arizona, New Mexico, Iowa, and West Virginia. The measures mirror a model bill created by the Independent Women’s Law Center, a conservative nonprofit that seeks to rewrite state laws to rely on sex assigned at birth. Versions of the policy were approved through legislation or executive orders last year in Kansas, Nebraska, Oklahoma, and Montana. A similar bill was also introduced in Congress last year by Sen. Cindy Hyde-Smith (R-Miss.) and Rep. Debbie Lesko (R-Ariz.)

Jennifer Braceras, vice president for legal affairs and founder of the Independent Women’s Law Center, testified in support of the proposal in Arizona.

“Everyday Americans know that a woman is an adult human female,” Braceras said, referring to the definition in the bill that a female is “an individual who has, had, will have or would have, but for a developmental anomaly or accident, the reproductive system that at some point produces ova.”

She told state lawmakers that activists seek to convince judges and others that men who identify as women have an unfettered right to enter women’s spaces and said the policy is a tool to restrict that access.

Braceras added that just because the model legislation does not include gender in its definitions, that doesn’t prohibit state lawmakers from choosing to include it in their policies. Conservative proponents of the legislation emphasize the difference between sex and gender, saying the former is an immutable biological fact and the latter a set of cultural norms.

The narrow definition of sex and provisions that declare certain spaces be protected as “single-sex environments,” including domestic violence shelters and rape crisis centers in some states’ versions of the policy, raise questions about compliance with federal laws that prohibit discrimination based on sex or gender.

Anya Marino, director of LGBTQI equality at the National Women’s Law Center, said that if a court found these state statutes at odds with federal laws, the federal law that ensures protection on the basis of gender would supersede the state laws.

Beyond how the laws could be interpreted or implemented, Marino expressed concern about other consequences these debates can have, including violence against people who “fail to conform against an extremist idealistic view of how sexes should appear,” she said.

“It’s part of a larger objective to control people through body policing to determine how they love and how they navigate their daily lives.”

Yet the legal ramifications are unclear.

In Montana, where one of these proposals became law after SB 458 was approved during last year’s session, lawmakers weighed the risks of potentially violating federal law and losing billions in funding.

The state’s legislative fiscal analysts determined that $7.5 billion in federal funds were on the line in the first year, depending on how state agencies implemented the law and whether those actions were deemed violations of anti-discrimination laws. The bill passed regardless and was signed by Republican Gov. Greg Gianforte.

A legal challenge of the statute is pending. Regardless, the Montana Department of Public Health and Human Services cited the law’s passage as justification to revive a ban on transgender people changing the sex designation on their birth certificate. The ban was originally instituted in 2022 and struck down by a judge before the new law passed.

“DPHHS must follow the law, and our agency will consequently process requests to amend sex markers on birth certificates under our 2022 final rule,” department director Charlie Brereton said in a Feb. 20 statement announcing the change.

Lawmakers in Utah removed language specifically identifying domestic violence shelters and rape crisis centers as “sex-designated” spaces that could exclude transgender people after hearing concerns from local and state leaders about losing federal funding. Though lawmakers removed mention of those specific venues from the bill, they kept provisions that prohibit transgender people from entering sex-designated restrooms, public showers, or locker rooms that don’t correspond with their sex assigned at birth unless their birth certificate has been amended or they’ve undergone gender-affirming surgery accordingly. The bill was fast-tracked, approved, and signed by Republican Gov. Spencer Cox two weeks after the legislative session began.

More recently, West Virginia lawmakers removed language from HB 5243 that named domestic violence shelters and rape crisis centers as places where the state could distinguish between the sexes.

Republican Delegate Kathie Hess Crouse, lead sponsor of the bill, said the language was removed because it was unnecessary.

“By removing the specific examples, we’re making it extremely clear that this list is not the full list of single-sex environments that West Virginia may have,” she said.

The West Virginia House approved the bill in February and it is pending approval from the Senate.

Asked about constituents who testified in opposition to the bill with concerns that it would negatively affect transgender people, Hess Crouse said they were misinformed. She asserted the bill doesn’t create new rights or take any away.

“The bill is a definitional bill for our courts to have guidance when interpreting laws that already exist in West Virginia,” she said. “If anyone in the state is not happy with the laws we already have on the books, they can work with their legislator to bring a bill that changes the law.”

Hugo Polanco, a trial attorney for the Maricopa County public defender’s office, testified in opposition to the bill in Arizona on behalf of the state’s American Civil Liberties Union chapter.

“Let’s be clear,” he said. “Trans rights are women’s rights. Advances in trans rights tear down barriers based on gender stereotypes, creating the opportunity for each of us to determine our own life story.”

Alex del Rosario, a national organizer with the National Center for Transgender Equality, said this slate of bills harms transgender people by attempting to eliminate protections for them.

“Policing people’s bodies while excluding transgender and intersex people from using the restroom does not protect anyone’s privacy,” they said. “Extremist politicians have been taking advantage of the American public, projecting a false image of transgender people, especially transgender women, to stoke fear and distrust of a community that many people don’t understand.”

Subscribe to KFF Health News' free Morning Briefing.