Federal Policy Is Adding Fuel to the Rural Healthcare Fire

— Our fragile rural system needs sustained funding, expanded training pipelines, and other support

When I led the military health system, I was asked to help a service member whose family had been transferred to a military installation in rural America. Not long after they arrived, one of his children began showing developmental problems that required specialist evaluation.

The installation hospital had no developmental pediatric specialist. Neither did the surrounding community. We arranged a virtual consultation with a children's hospital several hours away. Eventually, the child had to be transported there for an in-person evaluation. When it became clear that the care the child needed simply did not exist locally, the military moved the family to another assignment where those services were available.

That solved the family's problem because the military had options. But what happens to everyone else?

A farmer cannot request a new duty station. A schoolteacher cannot order the government to move her family because her child needs a specialist. An older couple cannot simply relocate because the nearest cardiologist is 2 hours away. For tens of millions of rural Americans, geography increasingly determines what care they can get and, too often, whether they get it in time.

Approximately 66 million Americansopens in a new tab or window live in rural communities. The consequences of living in medical deserts are measurable. The CDC has found that the rural-urban mortality gap has widened dramatically: in 1999, the age-adjusted death rate in rural America was 7% higher than in urban areasopens in a new tab or window; by 2019, it was 20% higher. Rural residents are more likely to die prematurely from heart disease, cancer, stroke, chronic lung disease, and unintentional injuries. In 2022 alone, the CDC estimated that tens of thousands of rural deaths from these major causes were potentially preventable.

A recent KFF/Associated Press surveyopens in a new tab or window of rural registered voters found that three-quarters rate the cost of living where they live as "fair" or "poor," a 25-percentage-point increase from 2017. Meanwhile, 66% of survey respondents said they're at least "somewhat worried" about affording healthcare for themselves or their families, with the price of gas rated as more pressing by only one percentage point.

At the same time, the infrastructure needed to care for those patients is disappearing. Between 2005 and 2024, 193 rural hospitals closedopens in a new tab or window. While a study in JAMA found that urban hospitals are closing at the same rateopens in a new tab or window as facilities in outlying areas, the closure of a rural facility hits harder, leaving patients with limited to no alternative care options. The loss of obstetric care in rural areas has been particularly stark: the share of rural hospitals providing obstetric services fell from 57% in 2010 to 48% in 2022opens in a new tab or window. The Center for Healthcare Quality and Payment Reform estimates that more than 700 rural hospitalsopens in a new tab or window, or one-third of all rural facilities nationwide, are at risk of closing. In rural America, losing a hospital or maternity unit can mean driving several hours to get obstetric care.

Yet federal policy is putting even more pressure on this fragile system.

The 2025 budget reconciliation law signed by President Trump is estimated to reduce federal Medicaid spending by $911 billion over a decadeopens in a new tab or window and leave 10 million more Americans uninsured. Rural communities are especially vulnerable. Medicaid covers one in four rural adults, half of rural births, and about one-fifth of inpatient hospital discharges. KFF estimates the law will reduce federal Medicaid spending in rural areas by $137 billion over 10 years.

For rural hospitals operating on razor-thin margins, those losses mean fewer nurses, fewer service lines, and ultimately, more hospital closures. Medicaid is not simply an insurance program in these communities. It is part of the infrastructure that keeps hospitals open.

The administration and Congress point to the $50 billion Rural Health Transformation Program as the answer. Investing in rural health is welcome. But the program cannot substitute for stable, sustainable financing. The money lasts only 5 years. KFF estimates it amounts to little more than one-third of the projected Medicaid reductions in rural areas, and restrictions on how the money can reach providers limit its ability to address the most immediate needs. The American Hospital Association has urged CMSopens in a new tab or window to loosen those restrictions, arguing that rural hospitals need direct and flexible support.

Technology, telehealth, workforce development, and new care models all play an important role. But technology cannot replace a closed hospital. Telehealth cannot perform an emergency C-section, and a video consultation cannot solve the problem of no obstetrician, psychiatrist, or developmental pediatrician within 100 miles.

Rural healthcare also depends on having doctors willing and able to practice in rural communities. Yet, the Department of Homeland Security (DHS) is threatening another rural lifeline: international physicians. DHS proposed a $103,265 feeopens in a new tab or window on H-1B petitions subject to the annual visa cap, in addition to other fees. A 2025 JAMA studyopens in a new tab or window found that more than 11,000 physicians were sponsored by H-1B visas in fiscal year 2024. Rural counties relied on H-1B-sponsored physicians at a higher rate than urban counties, with an even greater reliance in high-poverty communities. For a rural hospital that has spent years trying to recruit a physician, adding a six-figure cost to hiring an international doctor could make recruitment even harder.

Rural healthcare does need transformation. But first, it needs survival. That means protecting the Medicaid financing that sustains rural providers; directing federal dollars toward hospitals, clinics, and essential services before they disappear; expanding rural training pipelines and residency programs; preserving telehealth; and treating international clinicians who serve shortage areas as part of the rural health workforce.

The military family I encountered had options. We connected them to specialists. We transported their child. In the end, we moved them.

Most rural Americans don't have that option.

We cannot move rural Americans. We must bring healthcare to them.