More than 700 rural hospitals in America (of fewer than 2,300) face the risk of closure; at least 338 have operated at a loss for three years in a row. More than 100 rural hospitals have already closed over the last decade, but that rate of closure is expected to leap higher, as President Trump’s “Big Beautiful Bill” cuts nearly $1 trillion of the Medicaid program over the next ten years. Rural hospitals traditionally have a higher percentage of patients who rely on Medicaid, so even a small reduction in Medicaid payments could be devastating for these distressed facilities. Hospitals generally survive on a small operating margin, averaging only 5.2%, but the average rural hospital has a much thinner operating margin—just 1.7%. There are 66 million Americans living in the affected rural areas. A state-by-state list of the most vulnerable hospitals can be found here.
A common survival tactic of rural hospitals is to cut services. More than half of rural hospitals no longer provide maternity care, and scores now operate only as an emergency room. As a result, residents in rural communities are forced to travel longer distances to receive medical care. A January 2025 study published in JAMA Network shows higher costs, worse outcomes, a more likely need for a transfer to another facility, a more likely need for surgery, and longer hospital stays when patients are forced to travel longer distances for medical care. This only intensifies the problem of under-utilization of some hospitals while overcrowding exists at other facilities.
