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In January 2021, 70-mile-per-hour winds ripped through the High Plains, from Eastern Colorado to Western Kansas, and enveloped a portion of Interstate 70 in a deluge of dust and debris that suddenly blinded drivers. The result was predictable: multiple pileups of cars and semi-trucks, with more than two dozen people injured amid tons of crushed steel. With the nearest major trauma center 80 miles away, paramedics brought most of the victims to a tiny, county-owned hospital in the small town of Hugo. There were only two emergency room beds.
“We had patients everywhere,” recalls Lincoln Community Health Center’s CEO, Kevin Stansbury.
Doctors splinted the broken bones and stitched up lacerations with ease. But they also stabilized the most critical patients, whom they prepared for transport to larger hospitals.
“I think what gets underestimated,” Stansbury says, “is the role that rural hospitals play in the trauma network across the country.”
The importance of these hospitals may become clearer when they begin to disappear. That’s the result rural health experts predict from the budget bill President Donald Trump signed into law on July 4. The downstream effects of cuts to Medicaid, on which a disproportionate amount of rural residents rely, are estimated to put 380 independent rural hospitals “at serious risk of closure nationwide,” according to Families USA, a non-partisan consumer health care nonprofit.
Responding to these concerns—and likely being mindful of the political fallout from cutting health care in rural, predominantly Republican areas—GOP lawmakers appended a $50 billion “Rural Health Transformation Fund” to the bill. But critically, public health experts say, this amount cannot possibly offset the $137 billion that rural health facilities are expected to lose under the legislation. Further, many contend that the methods with which the $50 billion will be distributed are perplexingly opaque and seemingly partisan.
“In any other time, we would be massively celebrating,” Heidi Lucas, executive director of the Missouri Rural Health Association, says of the $50 billion fund. But when taken in context of what hospitals in her coalition will lose, “it’s just a drop in the bucket.”
“It’s just not going to save our hospitals, clinics, and health centers.”
“It’s just not going to save our hospitals, clinics, and health centers,” she adds.
Among their most pressing concerns is the uncertainty among the providers about which health facilities will even benefit from the fund.
“I think the answer is,” Stansbury says, “nobody knows.”
The One Big Beautiful Bill Act specifically mentions “rural hospitals” 10 times. But what “rural” means is difficult to determine. For example, he says, some of the largest medical centers in the country may be classified as “rural” because they treat patients who live in rural areas and travel to the bigger facility for specialized care. These “Rural Referral Centers” include hospitals in wealthy cities like Napa, California; Greenwich, Connecticut; and Miami, Florida.
Stansbury also wonders about the Federally Qualified Health Centers, which provide primary and preventative care to underserved communities, but not necessarily in areas traditionally understood to be “rural.”
“Do they siphon a bunch of money out of the rural areas?” Stansbury asks. “I’d like to see a very tight definition and parameters of where the money should go.”
The ways in which the legislation divvies up the funds among states are perhaps even more problematic, says Timothy McBride, a health policy analyst and health economist at Washington University in St. Louis, Missouri, who detailed the breakdown in a recent Substack post.
Half of the $50 billion fund will be evenly distributed to states without accounting for factors like population size. In fact, this means that some of them—such as Wyoming and North Dakota—may receive more from the rural health fund than they lose in federal Medicaid funding. On the flip side, the $50 billion fund would leave other states—such as Kentucky, Washington, and Oregon—in the red. By McBride’s calculations, Wyoming is in an enviable position, potentially receiving stands to cover 1,453 percent of what the state loses in Medicaid cuts. Meanwhile, Kentucky is expected to lose $5.4 billion through the cuts and gain only $1.9 billion from the fund, covering just 36 percent of the state’s losses.
Coincidentally, the states that stand to gain the most from this half of the rural health fund’s distribution are governed by Republicans, and the states that stand to lose the most are not. But there may also be winners and losers for the second half of the fund, which the Centers for Medicare and Medicaid Services (CMS) has the discretion to distribute mostly as it pleases. McBride says it’s fair to be concerned that a Republican administration would be biased against blue states when allocating money from this pot.
“One way to cut it is red versus blue,” says McBride. He adds that HHS could also, theoretically, deprioritize states that opted to expand Medicaid under the Affordable Care Act, a policy option the GOP has not fully embraced. States that expanded Medicaid to broader shares of their populations will be harder hit by the federal cuts.
For the rural health care facilities that ultimately do receive sizable sums, there are even more strings. The money will be limited to certain expenditures, such as recruiting and retaining clinical staff to serve rural areas for minimum periods of time, training new and existing staff on artificial intelligence, and providing technical assistance on cybersecurity.
The money can’t directly be used to make up for the care rural hospitals increasingly have to provide the estimated 16 million uninsured patients that Medicaid cuts are likely to create. And while there are certainly shortages of health professionals serving rural areas, the more pressing shortage, Lucas says, is cash to keep open the health care facilities that would employ them.
“If the hospital closes,” Lucas asks, “what good is it going to do to have these additional dollars to help with workforce recruitment?”