Rural Health Under Siege - CBO Analysis Shows 16 Million Would Lose Coverage - And Senate May Make It Worse
The Congressional Budget Office's June 4, 2025 analysis of H.R. 1 (the "One Big Beautiful Bill Act") as passed by the House of Representatives provides stark confirmation of what rural health advocates feared, but the crisis may be far from over. The CBO projects that 16 million Americans would lose health insurance by 2034 under the House-passed bill, with rural communities bearing a disproportionate burden due to their heavy reliance on Medicaid and federally-funded programs. However, as the Senate now works on its version through budget reconciliation, early signals suggest senators may push for even deeper cuts, making the CBO's devastating projections a floor rather than a ceiling for potential coverage losses.
This escalating threat comes on top of the Trump Administration's FY 2026 HHS Budget, which would simultaneously eliminate critical rural health programs including Medicare Rural Hospital Flexibility Grants, State Offices of Rural Health, and the Rural Hospital Stabilization Program. Rural communities now face the unprecedented prospect of losing both federal support programs and insurance coverage that keeps rural hospitals financially viable, with the Senate potentially making an already catastrophic situation even worse.
The numbers from the House-passed bill tell a devastating story, but they represent only the beginning of potential damage. The CBO analysis reveals that 5.1 million people would lose insurance from baseline policy changes including premium tax credit expiration and new marketplace rules, while 10.9 million additional people would lose coverage from H.R. 1 provisions as passed by the House. Most alarming for rural America, 7.8 million of those losses come directly from Medicaid changes that will devastate communities already facing hospital closures and provider shortages. These numbers represent more than statistics—they represent rural families losing access to critical healthcare services in areas where alternatives simply don't exist. But as the Senate crafts its reconciliation bill, comments from senators suggest they may pursue even more aggressive cuts, potentially pushing coverage losses well beyond the CBO's already-catastrophic projections.
Rural communities face a perfect storm of policy changes that will simultaneously eliminate federal support programs while slashing insurance coverage that keeps rural hospitals financially viable. The CBO confirms that H.R. 1's Medicaid provisions would be catastrophic for rural areas, starting with work requirements that would require 80 hours monthly of work-related activities for able-bodied adults aged 19-64 without dependents. The CBO estimates 5.2 million adults would lose Medicaid coverage by 2034, with rural communities disproportionately affected due to limited job opportunities, transportation challenges, and reliance on seasonal, part-time, or gig economy work that may not meet the 80-hour requirement.
Immigration status restrictions would compound the crisis, as Section 44110 would reduce federal Medicaid matching rates from 90% to 80% for states covering certain immigrants, leading 1.4 million people to lose coverage. Rural communities dependent on immigrant families who are integral to agricultural and service industries will see these families lose healthcare access precisely when rural hospitals can least afford to lose paying patients. Additional bureaucratic barriers through more frequent eligibility determinations would add 700,000 to the uninsured rolls, particularly affecting rural residents who often lack reliable internet access and transportation to navigate complex renewal processes.
The budget's elimination of cornerstone rural health programs creates a devastating one-two punch when combined with these coverage losses. Medicare Rural Hospital Flexibility Grants, State Offices of Rural Health, the Rural Hospital Stabilization Program, and 15 workforce development programs would all be eliminated just as rural hospitals face increased uncompensated care costs, reduced patient volumes, higher rates of bad debt, and accelerated financial distress leading to closures.
Marketplace changes compound rural challenges as the CBO analysis shows policies in H.R. 1 would eliminate 1.3 million people from coverage. Removing the ability for people at 150% of federal poverty level to enroll year-round particularly hurts rural residents who often experience irregular income from seasonal work. Immigration-related restrictions would eliminate coverage for 1.3 million people, including many immigrant families who are integral to rural communities, while new verification requirements would prevent 700,000 people from accessing coverage due to administrative barriers that are particularly challenging for rural residents with limited broadband access.
The CBO analysis validates concerns raised during HHS Secretary RFK Jr.'s confirmation hearings, exposing a glaring contradiction in congressional priorities. Senators from both parties emphasized rural health as a priority during those hearings, creating a public record that makes their current silence even more damaging. Senator John Barrasso of Wyoming was particularly vocal, telling Kennedy during the January 29, 2025 hearing: "There are a lot of challenges facing hospitals in rural communities... We have 33 hospitals in Wyoming, 26 are really located in areas, locations often hard to get to. Six of the hospitals are risk of closing. Two are at immediate risk of closing in the next two years. 10 have had to cut available services." Barrasso specifically asked Kennedy to "commit to working with us on a plan to address the critical nationwide issue of rural healthcare," to which Kennedy responded that rural hospitals were "one of the most common unifying issues among both Democrats and Republicans." Senator Chuck Grassley of Iowa stressed the importance of rural community hospitals and pharmacies, while Senator Shelley Moore Capito of West Virginia emphasized rural healthcare improvements and SAMHSA funding for addressing the opioid crisis.
For Nebraska specifically, Senators Pete Ricketts and Deb Fischer now face an impossible political contradiction. While neither senator appears to have made specific rural health commitments during the Kennedy hearings, both represent a state where the CBO projections would be devastating. Yet these same senators now face supporting a budget that directly undermines the rural health infrastructure their state desperately needs.
Nebraska: A Case Study in Rural Health Devastation
Nebraska provides a perfect case study for how the CBO's projections would devastate rural communities. The state illustrates the impossible contradiction facing rural senators who championed rural health during confirmation hearings but now must vote on policies that would destroy rural healthcare infrastructure.
Nebraska's rural health vulnerability is extreme. Rural hospitals make up about 35 percent of all hospitals nationally, but over 68 percent of hospitals in Nebraska. Nebraska has more rural residents living at least 25 minutes away from an ambulance than all but two other states. Approximately 16 percent of Nebraska mothers must travel at least 30 minutes to find a maternal care provider, about twice the national rate. Nearly 45 percent of the state's 64 critical access hospitals are under financial stress.
The state's 2018 Medicaid expansion, approved by voters after the legislature failed to act six times, now covers 66,881 Nebraskans as of November 2024. More than two-thirds of Nebraskans who fall into the coverage gap are employed, and 36 percent of Nebraskans who fall in the coverage gap live in rural areas of the state. These are exactly the people who would lose coverage under the CBO's projected impacts.
The financial math for Nebraska's rural hospitals is brutal. Medicaid expansion stands to reduce uncompensated care costs for Nebraska hospitals and clinics by nearly $343 million over a three-year period. If the CBO projections prove accurate and Nebraska loses tens of thousands of Medicaid enrollees while also losing federal rural health programs, rural hospitals would face the perfect storm of reduced revenue and increased uncompensated care that has already pushed nearly half of the state's critical access hospitals into financial distress.
For Senators Ricketts and Fischer, the political stakes are enormous. As Nebraska Public Media noted, Ricketts as governor "opposed the proposed expansion of Medicaid under the provisions of the 2010 Patient Protection and Affordable Care Act" but now serves in the Senate representing a state where that expansion has become critical infrastructure. Both senators now face a defining moment that will test their commitment to the rural constituents who depend on them. The choice before them is clear: support policies that align with their stated rural health priorities, or advance budget proposals that would fundamentally undermine the healthcare infrastructure their state desperately needs. This represents exactly the kind of consequential decision that defines a senator's legacy and relationship with the communities they serve.
The CBO analysis provides the evidence base for immediate action and creates unprecedented opportunity for rural senators to demonstrate principled leadership. Rural health advocates must contact senators immediately with specific CBO projections for their states, emphasizing the alignment between rural health priorities and constituent needs. The message should focus on the opportunity for leadership: "CBO shows 16 million Americans will lose coverage from the House bill alone—don't let the Senate make it worse" and "Rural hospitals need senators who will fight for both federal support programs AND the insurance coverage that keeps them viable." Time is critical, as senators are actively crafting reconciliation language that could push rural healthcare over the cliff entirely.
Based on CBO findings, advocacy efforts should prioritize opposition to Medicaid work requirements that would create 5.2 million in coverage losses, verification barriers that disproportionately affect rural residents, rural program eliminations combined with revenue losses, and immigration restrictions affecting the rural workforce. The combination of program cuts and coverage losses represents an existential threat that rural healthcare infrastructure cannot survive. For Nebraska's senators and others representing rural states, this moment presents an opportunity to demonstrate leadership on an issue that transcends partisan politics—the fundamental question of whether rural communities will have access to basic healthcare services. With the Senate now crafting potentially even more severe cuts through reconciliation, the window for intervention is rapidly closing. Rural senators have the power to prevent not just the House's devastating cuts, but to stop an even worse Senate version from moving forward.
The CBO analysis transforms the rural health budget debate from speculation to documented crisis, cutting through political rhetoric about "waste, fraud, and abuse" to reveal the real-world consequences of coverage losses. While politicians routinely invoke fraud concerns to justify Medicaid cuts, the reality for rural hospitals and healthcare providers is far different. These institutions operate with thin margins and rigorous oversight, focused on serving their communities rather than gaming the system. The fraud narrative becomes a convenient political justification for cuts that will devastate legitimate healthcare providers who are already struggling to keep doors open in underserved areas.
With the House already proposing 16 million Americans lose health insurance, and the Senate potentially pushing for even deeper cuts through reconciliation, rural communities face an escalating crisis that represents the most serious threat to rural healthcare access in generations. Rural health advocates now have authoritative numbers to hold elected officials accountable and challenge misleading rhetoric about program integrity. The question is no longer whether these policies will devastate rural healthcare—the CBO has confirmed they will. The question is whether rural senators will uphold their public commitments to rural health or allow an even worse Senate version to push their constituents over the edge.
The time for action is now. Rural America cannot survive the loss of both federal programs and insurance coverage simultaneously, especially if the Senate makes the House bill even worse. Contact your representatives today with these CBO projections and demand they choose between political expedience and rural survival. The window for preventing an even greater catastrophe is rapidly closing.
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