Cuts to Rural Health Infrastructure – An HFA Special Policy Report

By Adam Alver, Policy Director

The “Big Beautiful Bill” – HR 1

As we continue to update our community, the current budget reconciliation bill, HR 1, or the Big Beautiful Bill Act continues to make its way through Congress. Now sitting in the Senate and awaiting changes following a block by the Senate Parliamentarian (the “rule-keeper” of the Senate), major negative impacts to the country’s healthcare system remain imminent. While we have discussed how these changes could affect our community generally, we also believe it’s important to address the impacts to the rural health infrastructure in America. The cuts in the existing bill would have an outsized impact on rural communities and bleeding disorders patients living in rural America, who already face significant barriers to care.

The Provisions Within the Bill

Currently, there are several provisions within the bill that would negatively impact the way rural hospitals are funded. These include:

• An elimination of Medicaid expansion incentives (which would provide 5% additional upfront funds for two years to states that extend Medicaid coverage under the Affordable Care Act),
• The creation of federal work requirements for enrollees to qualify for Medicaid that could reduce state Medicaid funding through decreased enrollment sizes,
• Limits on provider taxes which help finance state Medicaid programs through taxation on medical providers within a given state,
• Delaying payments to “Disproportionate Share Hospitals” until 2028, which are payments to hospitals that disproportionately serve low-income, uninsured, and Medicaid patients, and,
• Limiting directed payments by states for covering services like inpatient and outpatient hospital service and nursing facilities.

Combined, these and other reductions in federal support for state Medicaid programs would reduce patient enrollment, reduce funding for hospitals and medical providers, and have compounding effects greater than if any one provision were to be enacted by itself.

According to the National Rural Health Association, an estimated $1.3 trillion or more will be lost in Medicaid funding due to these provisions, which will result in millions of patients losing coverage across the United States and add greater risk for rural communities who are disproportionately reliant on Medicaid funding.

Threats to Rural Care

Nearly half of all children and one in five adults in rural areas are covered by Medicaid or CHIP (the Children’s Health Insurance Program). There are six states where one in two children are covered by these programs: New Mexico, Louisiana, Arizona, Florida, South Carolina, and Arkansas. 

Additionally, there are fifteen states where one in five non-elderly adults are covered by Medicaid: Arizona, New York, New Mexico, Louisiana, Kentucky, West Virginia, Oregon, Washington, Montana, Arkansas, Maine, Vermont, Massachusetts, Michigan, and Alaska.

While more people in rural communities rely on healthcare benefits through Medicaid or CHIP, more rural hospitals are closing making vulnerable communities more vulnerable, especially when emergency care is needed but too far away. In the past 20 years nearly 200 rural hospitals were impacted by closures, including 111 complete hospital closures and 85 which have been converted into Rural Emergency Hospitals where inpatient care is limited or not available.

The threats posed by the current legislation will weaken rural health facilities financial stability, increase the rates of already significant rural hospital closures, and have a compounded impact on patients in rural areas. In the bleeding disorders community, we know that many patients in rural areas already face significant hurdles to obtaining care and treatment like fewer HTC options, long drives to physicians and emergency rooms, and an overall lack of localized specialized care. 

Financial Difficulties

As of 2023, a reported 48% of rural hospitals operated at a financial loss, largely due to underpayments for services by health plans. Medicaid, as one financial source, paid rural hospitals 63 cents per dollar spent for inpatient obstetrics are, with the potential for that number to decrease to 42 cents per dollar if the current provisions in the “Big Beautiful Bill” go into effect. This would result in an estimated $50-$70 billion dollar decrease in funding for rural hospitals across the United States, and possible reductions exceeding 20% in more than half of the states. Missouri, a state with one third of rural hospitals at risk of closure, could see a 29% reduction, and Kansas, with more than half of rural hospitals at risk of closure, could see a 15% reduction.

Even states like Maine and Alaska, where direct payments to hospitals for services are low, would see reductions in overall fund availability due to reduced enrollment rates for patients. Because things like work reporting requirements and increased enrollment eligibility verifications will more substantially impact those patients who are already stretched thin, the likelihood of patients with low incomes or work variability (like farmers) to lose coverage is much higher than in urban areas.

One of the messages we continue to hear is that this “Big Beautiful Bill” isn’t actually cutting Medicaid, but the result of the significant changes to the way people enroll in Medicaid and prove their eligibility will drastically reduce the amount of federal dollars spent across the United States, which is why so many are so concerned about this bill.

Gradual Closures

As mentioned above, nearly 200 rural hospitals across the US have closed or been converted into Rural Emergency Hospitals.

Rural Emergency Hospitals were established as a designation by Congress in 2020 to address the already frequent closures of rural hospitals and ensure that patients had access to care. Rural Emergency Hospitals are facilities with 50 or fewer beds in operation as of December 27, 2020, and are also not eligible for 340B fund access, which supplies a large percent of funding for bleeding-disorder related care across the United States. 

Between 2010 and 2023, 148 hospitals in rural areas had closed or converted services, and one report in 2022 determined that 453 rural facilities could be considered “vulnerable” based on performance levels at the facilities, with the Southeast and Great Plains regions being most at risk of closure. In states without Medicaid expansion (where a state increased the number of patients eligible for Medicaid to higher percentages of the federal poverty line), the study found that the median operating margin for rural hospitals was -0.3%, and that 52% of those hospitals were operating with negative margins, indicating a high risk of closure. 

It becomes clear based on these numbers that in an already-stressed system, further reductions in healthcare funding, whether they come from Medicaid or Medicare programs or elsewhere, will have increasingly negative impacts on public health in the US, as well as our own bleeding disorders community.

Impacts to the Bleeding Disorders Community

HFA currently estimates, based on the most recently available data from the CDC, that within the states listed above with significant overall CHIP or Medicaid enrollees, the patient population with Hemophilia or Von Willebrand’s Disease are as follows:

We note here as well that these numbers do not reflect undiagnosed or under-diagnosed populations within the bleeding disorders community, or other disease groups like rare platelet disorders, and that the true numbers are likely much higher. However, together, they represent a total of at least 15,800 patients, and if the current Medicaid utilization percentages are accurate, these states likely have Hemophilia and VWD Medicaid enrollees totaling around 3,700 patients.

Of these states, Montana lacks a Hemophilia Treatment Center, seven states only have one (AK, AR, ME, NM, OR, SC, VT), and the remaining states have 2 or more.

In states without dedicated Hemophilia Treatment Centers like Montana, Wyoming, and Mississippi, the likelihood of increased difficulties getting care and treatment are significantly likely to increase, since currently most of the more remote regions rely on emergency hospitals, local providers, and long-distance travel to the closest Hemophilia Treatment Center they can find. If the current Medicaid and other provisions within HR 1 pass, these issues will only become greater as time goes on.

What We Are Doing About It

HFA is continuing to dedicate as much available time and resources to fighting these provisions as we can, and we also remain committed to addressing the disparities for rural communities across the United States. All patients are equally important to us, and with recent and upcoming meetings as part of our Rural Health Access Project, we want to hear your voices and experiences to help shape our advocacy and policy goals now and into the future. We continue to host community organizing calls, and hope anyone affected by a bleeding disorder in a rural area (or otherwise) will consider joining our Advocacy Network to make their voice heard in Washington.

Since several members of congressional leadership currently represent states listed above (Rep. Mike Johnson – LA District 4, Rep. Steve Scalise – LA District 1, Sen. John Thune – SD, Sen. Tom Cotton – AR, Sen. Shelley Moore Capito – WV, Sen. Tim Scott – SC, and beyond), the voice of rural communities is more important than ever in engaging with members of congress. While the Senate works to advance its bill to President Trump’s desk by July 4^th, you can make a difference and speak up for the bleeding disorders community today!

Your Role in Our Continued Work

HFA’s efforts need amplification from your stories to protect and empower the entire bleeding disorders community. Raise your voice to be heard with HFA today by:

• Joining HFA’s Advocacy Network,
• Acting on the major cuts to the HHS and CDC impacting our community.

Also, be sure to stay up to date with our next Word from Washington post and State of the States posts, and encourage your friends, family, and local bleeding disorders chapter to support us in this work!