Fund for rural hospitals isn’t enough

Just before passing President Donald Trump’s 2025 big, beautiful tax and budget reconciliation bill, Republicans threw a bone to Senators, acknowledging that $1 trillion in Medicaid cuts over 10 years will threaten rural hospitals and other providers, according to the Congressional Budget Office.

It’s estimated that the cuts and reductions in spending on the Affordable Care Act will cause 12 million Americans to lose health insurance. Cuts to Medicaid in rural areas will add up to $155 billion over a decade, according to health care researchers at KFF.

According to the Center for Healthcare Quality and Payment Reform, 20 rural Iowa hospitals are at risk of closure, with 5 facing immediate risk of shutting down. Nearly rural providers are operating at a loss.

So, the bill’s backers added $50 billion for a Rural Health Care Transformation Program.

The program would use $25 billion to provide equal shares to states that apply. The other $25 billion will be distributed by the Centers for Medicare and Medicaid Services, which will have broad discretion over how the money is spent, ostensibly based on population and the number of rural health care providers.

Under the law, CMS decisions are not subject to judicial or administrative review. It can award funds without explaining how the decisions are made. CMS, under the law, is also not required to release any information on how the bucks are distributed.

The lack of transparency is a red flag. Will the fund fairly evaluate applications, or will it become a slush fund to reward only red states? How much would be allocated to 1,800 rural hospitals in the U.S. with 44% struggling to remain open?

Another obvious problem is that the $50 billion program accounts for only roughly one-third of the overall cuts to rural Medicaid payments. And unlike the Medicaid cuts, the $50 billion pot is a temporary program providing dollars for the next five years, through 2030.

However, the big bill postpones nearly two-thirds of the cuts until after 2030. Therefore, the aid would cease just when rural providers are facing the full brunt of Medicaid reductions.

Of course, $50 billion is better than nothing and may be used to improve health care delivery in rural areas. But it’s also political window dressing, because overall Medicaid cuts will still be devastating to some rural hospitals.

We will see if the hastily conceived program is useful or a ploy to garner votes. At the very least, Americans deserve to know how their money is being spent and who is spending it. The lack of transparency is disturbing enough to shake public confidence. Rural communities deserve more than vague promises and vanishing dollars.

(319) 398-8262; editorial@thegazette.com