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The Trump administration’s rural hospital fund, meant to soften the impact of the brutal Medicaid cuts in HR1, will require a murky submission process and will not come close to closing the gap for rural communities.
Amid furious efforts to cover their tracks, Republicans included $50 billion in new funding to offset the disastrous cuts that rural hospitals will face as a result of President Donald Trump’s House Resolution 1. Trump’s new Centers for Medicare and Medicaid Services Director, Dr. Mehmet Oz, gave an explanation which would be laughable if this weren’t so serious. He stated that the Rural Health Fund “is part of a broader effort to modernize rural healthcare… [and that] innovation is the reigning theme” citing growing opportunities for rural providers to become more engaged in the healthcare system.
The “Rural Health Fund” was established by HR1 to soften the impact of the legislation, which cuts $911 billion in federal Medicaid spending over 10 years, due to start after 2030. The good news is that the distribution of the $50 billion will begin before the Medicaid cuts take effect (conveniently before the midterms). The bad news is that the temporary $50 billion in new funding will offset a little over one-third (37%) of the estimated $137 billion in permanent cuts to federal Medicaid spending in rural areas. People everywhere can do the math. Fifty is a whole lot less than 137.
On September 15, Centers for Medicare and Medicaid Services (CMS) released a Notice of Funding Opportunity for states to apply for the funds. Half of the funds, $25 billion, will be distributed by CMS equally across all states with approved applications, and the other half distributed based on four factors identified by CMS, including priorities that align with the Make America Healthy Again agenda. While some of the goals are welcome, such as expanding access to opioid-use and substance-use disorder treatment and mental healthcare and recruiting and retraining clinicians in rural areas, other priorities, such as supporting value-based care, alternative payment models, and other innovative delivery arrangements that shift risk to practitioners away from insurance companies and that have been demonstrated to increase costs in Medicare, are worrisome. Predictably, no funds can be used to pay for abortions for women living in rural areas.
Each state, regardless of the size of their rural population and needs, will receive the same amount from the first $25 billion tranche. States with few rural hospitals, such as Delaware, with three rural hospitals, will receive equal funding as California, with 66 rural hospitals, some of which have closed and many which are at risk of closing, and that assumes that both states are approved for funding.
We urge residents of rural communities to stand together and demand the right to excellent healthcare that our wealthy nation can and must provide.
Disbursement of the funds promises to be a cronyism gravy train requiring applications, murky decision criteria, no administrative or judicial review, and nonexistent information as to the amount a state will receive, how the funds will be distributed, or even if the funds will go only to rural hospitals. A merit review panel will review the state applications with final award decisions made by CMS. The program runs for five years, but because CMS will reevaluate state initiatives every year, CMS could withhold, reduce, or even recover funding from the state depending on a state’s progress or if continued funding is “in the government’s best interests.” The only thing that is clear is that hospitals and their administrators will spend countless hours and resources on evaluation, reports, and contractors hired to write these reports.
The stakes for rural hospitals couldn’t be higher. As a result of the Medicaid cuts, hundreds of rural hospitals are at risk of closing. But even before cuts, rural hospitals have been shuttering: From 2005 to 2024, 193 rural hospitals closed. In the wake of HR1Sen. Ed Markey (D-Mass.) and others asked the Sheps Center to identify rural hospitals at risk of closing because of the Medicaid cuts. The Sheps Center identified 338 hospitals which either experienced three consecutive years of negative total margins, serve the highest share of Medicaid patients, or both. These are the hospitals that, because of their heavy reliance on Medicaid funds, will likely shutter.
What will happen to the millions of people who live in these rural communities when these hospitals close? The median travel distance to the next hospital, emergency room, substance-use, or heart specialty care center will jump seven- to eightfold. This translates to higher mortality from many common conditions: heart disease, cancer, stroke, and unintentional injury.
In "The False Promises of VA Privatization", author Suzanne Gordon highlights the plight of healthcare access for veterans and Americans who live in rural communities, the majority of whom already live in so-called medical and mental health deserts. For example, 81% of rural communities do not have even one psychiatric nurse practitioner and 65% do not have a single psychiatrist. The shuttering of rural hospitals will also mean the loss of thousands of healthcare worker jobs and the ensuing negative economic impact on those communities.
The $50 billion rural health fund earmarked by the Trump administration will not transform these rural medical deserts, will not protect the livelihood of workers and their families, nor will it safeguard their communities. The piddly funds will not staunch the bleeding the brutal cuts to Medicaid will cause.
National Single Payer has launched a “Save Our Rural Hospitals with National Single Payer” campaign. We believe that a national, improved Medicare for All, free from profit in the financing and the delivery of care, would provide the reliable, equitable funding needed to help hospitals and physicians not only survive, but thrive in rural areas. The funding from global budgets would be based on community healthcare needs and not on industry interests.
We urge individuals who live in districts where the at-risk hospitals are located to contact their representatives and ask them to cosponsor HR3069, the Medicare for All Act. If your representative is already a cosponsor, tell them to do more to put national single payer on the nation’s agenda.
People can also pass a resolution in their local organization or city council going on record in favor of saving and sustaining their rural hospitals by calling on Congress to pass national, improved Medicare for All, free from profit.
We urge residents of rural communities to stand together and demand the right to excellent healthcare that our wealthy nation can and must provide. The 46 million people living in America’s rural communities don’t need a temporary Band-Aid—they deserve what everyone deserves, no matter where they live—healthcare as a human right, free from profit.
Instead of offering a "disaster fund" for rural hospitals that would lose crucial funding due to Medicaid cuts, one Democratic senator said Republicans should not "create the problem in the first place."
"That ought to do it."
That was Democratic Senator Ron Wyden's sardonic response Wednesday to a new proposal put forward by Senate Finance Committee Republicans whose proposed solution to the devastating impacts of the $800 billion in Medicaid cuts they want to impose is a so-called $15 billion "stabilization fund" for rural hospitals that rely on Medicaid to operate.
Wyden was among several Democrats who appeared fed up this week with Republicans' attempts to paper over the devastation hundreds of billions of dollars in Medicaid cuts would cause in communities across the United States.
While several Republicans in the House have acknowledged that cutting Medicaid to help fund tax cuts for corporations and the wealthiest Americans would harm "vulnerable constituents"—echoing warnings that Democrats and progressive advocates have been shouting for months—Senate GOP lawmakers have also evidently looked at the party's budget reconciliation bill and its Medicaid provider tax decrease, which would slash state funding for Medicaid, and come to terms with the suffering the proposal would inflict on their own voters.
"The devastation to healthcare in the United States will be red and blue," Sen. Richard Blumenthal (D-Conn.) told the news outlet NOTUS. "Red, white, and blue, across the country, and I think they're hearing from constituents."
According to a report released last week by the AFL-CIO, with states losing Medicaid funding from the provider tax decrease, more than 330 rural hospitals are expected to go out of business if the Republicans manage to pass the reconciliation bill as written.
"This is literal life-and-death for folks who will have to travel even farther to access the healthcare they need," said Groundwork Collaborative, a progressive think tank and advocacy group.
Democrats suggested the apparent panic created by public outrage over the proposed cuts led Republicans on the Senate Finance Committee to circulate a memo Wednesday proposing a $15 billion fund for rural hospitals—but not facilities in urban areas, which also serve many Medicaid recipients but lie in largely Democratic areas.
About half the money in the fund would be made available for rural hospitals across the country and the other half would go to specific hospitals chosen by the Centers for Medicare and Medicaid Services, a Republican senator told The Hill.
Sen. Chris Murphy (D-Conn.) denounced the proposal as "a slush fund" that exemplified "the corruption" behind the GOP's megabill.
Republicans including Sens. Susan Collins (R-Maine) and Josh Hawley (R-Mo.) have proposed a larger $100 billion fund for hospitals—a number Senate Majority Leader John Thune (R-S.D.) scoffed at Wednesday—but Democrats were quick to point out that a bigger fund wouldn't reverse the impact of $800 billion in Medicaid cuts.
"The rural hospital fund is a fig leaf that will let them pretend that they can take away hundreds of billions of dollars in healthcare reimbursements," Sen. Elizabeth Warren (D-Mass.) told NOTUS.
Several Democrats and advocates said Republicans were desperately "trying to solve a problem they're creating" by slashing a healthcare program used by more than 71 million Americans.
"The obvious question is, don't create the problem in the first place," Wyden told NOTUS. "Don't create the need for things like disaster funds."
Help family farmers and other rural folks defend a strong public U.S. Postal Service from the Trump administration’s attacks.
Since 1775 when Benjamin Franklin became the very first postmaster general, the United States Postal Service has faithfully fulfilled the many lofty goals that are now inscribed outside the entrance of the U.S. Postal Museum in Washington D.C.: “Bond of the Scattered Family; Enlarger of the Common Life; Carrier of News and Knowledge; Instrument of Trade and Commerce.”
Affordable universal reliable communication is not something many people can take for granted. In fact, the USPS was such a great American idea (like our national park system) that it has since been replicated across the globe. Under the pretense that the USPS is “bankrupt,” though, President Donald Trump and other neoliberal free marketeers are hellbent on imposing an austerity program and ultimately privatizing this vital public service.
During Trump’s last stint in the White House, USPS was forced to shutter half of its mail processing centers, leading to longer delivery times, and 10% of the nation’s post offices, mostly in rural towns, were put on the auction block. Despite such, the USPS continues to have some of the highest public approval ratings of any federal government agency. After all, who else can you trust to make sure you get your seed orders or drug prescriptions in a timely fashion?
Now is the time to speak up and insure the proud iconic eagle of the USPS is not replaced by some anemic vulture version.
How did this quite preventable (and orchestrated) mugging of the USPS come about? Well, one needs to go back a few decades when the government first opened the door for corporate competitors to undermine the viability of the USPS. At just 73 cents to deliver a first class letter, USPS rates remain among the lowest in the industrialized world. Given the surge in packages, accelerated by the pandemic, private outfits like Fedex and Amazon are now allowed to mooch off the USPS’ amazing efficiency to help deliver their own packages (saving themselves up to 75%). Contrary to some naysayers, the USPS does not get a dime from U.S. taxpayers—it provides a valuable public service at cost to consumers. So attacks on the USPS claiming it is “horribly wasteful” are just flat out wrong.
The USPS is also hamstrung from taking advantage of other ways to expand its services that many people, especially rural folks, desperately need. For example, the USPS still offers money orders, but many other countries’ postal systems offer a much wider range of popular financial services such as checking and savings accounts, even low-interest loans. One recent study found that the USPS could earn an extra $8-9 billion per year just by providing basic banking options to the millions of Americans who now subsist on the fringes of the financial system. It is no surprise that Wells Fargo is drooling over the possible demise of USPS (as revealed in a recently leaked internal memo), since they hardly want any other option for those now subject to their predatory lending practices.
Now is the time to speak up and insure the proud iconic eagle of the USPS is not replaced by some anemic vulture version. Family Farm Defenders is among dozens of organizations that have joined the Grand Alliance to Save Our Public Postal Service. And just like many family farmers rely upon cooperatives for their collective bargaining against agribusiness, postal workers also deserve to have their labor rights respected as fully unionized federal employees. Please contact your elected officials to insure the future of USPS as a vital public good, and next time you are at the post office thank the workers for their essential service! As the unofficial motto of the USPS goes: “Neither snow, nor rain, nor heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds.” Neither should DOGE!