Last year’s “beautiful bill” passed by President Donald Trump and only Republicans will cause rural hospitals to go out of business, consumers to lose coverage, reduce care in small towns and create tax increases at the local level.
While the GOP knew nearly $1 trillion in cuts to Medicaid would hurt rural hospitals, it offered a $50 billion hospital fund to shore up those losses. But it won’t make a dent. Only 15% of the $50 billion can be used to make up for Medicaid losses, and much of the rest must be used for hospitals to “innovate” on costs, according to recent new rules on the program.
And hospitals can only receive funding if they adopt policies consistent with Make America Healthy Again, the controversial set of edicts by Health and Human Services Secretary Robert F. Kennedy, Jr.
On top of that, the Trump administration recently proposed rules that rural hospitals cannot recover discounted drug prices, a policy the American Hospital Association opposed, saying it would hurt hospitals bottom lines.
The “beautiful bill” (H.R. 1) also ended Affordable Care Act subsidies to help people buy insurance. Those insurance costs doubled and tripled at the beginning of the year and left many unable to afford their premiums.
Some 10 million more Americans will be without health insurance as a result, according to an estimate by the Congressional Budget Office. Some 17,000 discontinued coverage in Minnesota. That will put more cost for uninsured patients on many rural hospitals who must, by law, provide emergency service even if people cannot pay.
Counties in Minnesota will pay some $100 million to $160 million a year to take over costs shifted to them as part of H.R. 1., according to health department estimates. Blue Earth County estimates it will face an increase in costs of food assistance administration alone by $650,000 in 2027 and $1 million in 2028. Overall changes from the H.R. 1 will cost the county about $2 million, according to county officials.
That’s causing the county to propose a tax increase up to 9% this year after an 8.5% increase last year.
Other counties will see similar increases, and in many cases those costs will fall heavier on farmers. In Watonwan County for example, 85% of the property is farmland. Farmers are already paying double for fertilizer and fuel since the onset of the Iraq war.
The Minnesota Legislature, on a bipartisan basis, provided $31 million to help shore up rural hospitals as part of the bill to bail out Hennepin County Medical Center. The 31 financially distressed hospitals in Minnesota would only get $1 million each, far short of what’s needed, according to hospital administrators in a MinnPost report.
So the “Big Beautiful Bill” will be ugly for rural health care making it less accessible, more costly and driving hospitals out of business. County taxpayers will likely see taxes increase of 8-10%.
Republicans called for cuts to these programs citing waste, abuse and fraud. There has been little evidence of widespread fraud anywhere. Republicans also tied funding to error rates counties were making in some of these programs, setting a standard of 6% error rates when the national average is 10%. That’s a big ask from counties who already must increase the levies to make up for the cost shifting.
Most can agree counties should reduce their error rates as soon as possible, but these onerous rules and timeline aren’t realistic. Meanwhile, those in need of food assistance and health care will likely be the innocent casualties. Rural patients will not likely get care close to home as their local hospitals close.
We call on GOP Rep. Brad Finstad and Republicans to immediately request adjustments from the Trump administration on H.R. 1. The best strategy for rural areas would be to reduce tax cuts and restore ACA subsidies, provide more aid to rural hospitals, fix the drug price revenue loss problem and reduce cost shifting to counties.
H.R. 1 was born of aspirations of boosting the economy with tax cuts and prosperity for everyone. But the reality shows a starkly different picture as vibrant small towns become ghost towns driving people out with no health care, excessive taxes and dwindling prosperity.