MERCED, Calif. — A new report by the policy research group Urban Institute says recent federal policy changes to healthcare under the Trump administration could cause irreversible impacts to rural hospitals and the overall healthcare system.
Analysts forecast the number of uninsured people could rise in the coming years as policies take effect. The report looked at five different recent policy changes which researchers say will affect hospitals and health systems across the country in the months and years to come.
Some of the policy changes come from the major reconciliation bill passed last year, known as the One Big Beautiful Bill.
The legislation included tighter work requirements for people enrolled in Medicaid, as well as the need to re-enroll in healthcare coverage more often.
The report said ramped up immigration enforcement efforts may also exacerbate a physician shortage and diminish the number of patients going in for care.
The Big Beautiful Bill will also limit eligibility for some immigrant populations, “including refugees, asylees, people with temporary protected status, and work-visa holders” to receive coverage. This could cause many to forego visits that hospitals rely on to keep their doors open.
The major reforms will take effect gradually, which researchers highlight as one silver lining that could give hospitals and policymakers time to “plan, adapt, and deploy mitigation strategies.”
As a way to offset cuts to Medicaid, the federal government is pushing a so-called Rural Health Transformation Program that is aimed at supporting rural hospitals by providing funding over the next five years.
Researchers noted, however, that the funding will not cover the budget gaps to hospitals that could be left by the cuts, especially in areas with high rates of Medicaid enrollment.
Uninsured patient crisis
Healthcare changes under the One Big Beautiful Bill Act go into effect in 2027 for most states.
Residents enrolled in Medicaid will have to prove they are employed or are doing an equivalent activity for at least 80 hours per month in order to keep their coverage. They must also resubmit proof of this requirement every six months.
The Urban Institute projects these revisions will result in five to 10 million people being disenrolled in the federal health program as early as 2028.
The increase in uninsured patients and a decrease in revenue could leave hospitals with a cost burden, including reduced hours, fewer staff and potential hospital closures.
“Hospitals are facing a host of serious financial headwinds, which for some will have existential implications,” Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, said in a press release announcing the report. “Loss of federal funding and growth in uncompensated care coupled with inflation and labor force problems will raise costs and reduce revenue, forcing some hospitals to close or reduce services.”
The Affordable Care Act was meant to provide subsidies to patients who did not qualify for Medicaid. The Urban Institute researchers say enrollment into the ACA doubled 2021 through 2025.
But last year, the Centers for Medicare and Medicaid Services announced a 90% reduction in support for the ACA Marketplace Navigator program, which researchers warn could result in less support for customers seeking health insurance.
Immigration enforcement impact on healthcare
The anticipated ripples in the healthcare landscape could be further worsened by the Trump administration’s crackdown on immigration, according to the study.
Immigrants make up roughly 15% of the total U.S. population, and are deeply embedded in the nation’s labor force.
“In 2023, immigrant and foreign-born workers accounted for 18% of the US health care workforce,” the report stated. “Within hospitals specifically, immigrant physicians represent more than one-quarter of all hospital-based physicians nationwide.”
Many of these immigrants rely on work visas to legally perform their jobs. And there have also been policy changes in the H-1B visa program, which supports many of them.
The Trump administration has aimed to increase the fee to obtain the visa. A judge however struck down the fee this summer. But further disruptions to immigration policy could have far reaching consequences on the healthcare workforce.
“Evidence suggests that H-1B-sponsored physicians are nearly twice as prevalent in rural
as in urban areas and almost four times more likely to practice in the highest-poverty counties
compared with the lowest-poverty counties,” the report stated.
But immigration police reforms are not just hitting the workforce. It’s also cutting into everyday patients. Recent enforcement efforts have created a chilling effect across the country, which researchers say could result in people opting out of school, work or seeking healthcare.
Help for hospitals remains uncertain
The Rural Health Transformation Program was included in the One Big Beautiful Bill as a response to cuts in Medicaid payments and new enrollment conditions.
The program, which pledges $50 billion dollars over five years to rural hospitals in need, is considered the largest federal investment in rural health care.
However, researchers claim it will only cover a fraction of long-term losses from Medicaid cuts in rural areas.
The report points to a recent analysis that found less than half of rural hospitals are currently operating at a financial loss.
Researchers add that the rural health program may not totally prevent hospital closures or losses from Medicaid cuts – and the experience of each hospital and patient will vary across the board.
