Over 400 hospitals at risk of closing due to Medicaid cuts, report finds: Questions and answers

Healthcare leaders have warned that cuts to Medicaid over the next decade threaten the viability of some hospitals, and now a new report estimates the number of hospitals at risk.

As many as 446 hospitals are at risk of shutting their doors or reducing their services, according to a report released this week by Public Citizen, a consumer advocacy group.

President Trump and Congress crafted a tax package known as HR 1 - and more commonly called the One Big Beautiful Bill - that includes substantial cuts for Medicaid programs in the coming years.

Here are some questions and answers about the report, the Medicaid cuts, and the risks to hospitals.

Q: Where are the hospitals at risk?

A: Threatened hospitals were identified in 44 states and Washington, D.C., Public Citizen says. In five states, more than a quarter of the hospitals are at risk: California, Connecticut, Massachusetts, New York, and Washington.

Connecticut had the higher percentage of at-risk hospitals (36%), followed by California (31%) and New York (31%).

Q: Are they typically urban hospitals?

A: The majority of the hospitals identified as at risk are in urban areas, but plenty of rural hospitals are at risk as well, the report suggests.

Here’s the breakdown: 267 at-risk hospitals (60%) are urban, while 176 hospitals (39%) are in rural areas.

Q: How did Public Citizen assess hospitals that are in danger of closing or cutting services?

A: Hospitals were considered at risk if they met two criteria.

The hospital had negative net profit margins, on average, from 2022 to 2024.

If 20% of a hospital’s payer mix from 2022-2024 came from Medicaid, the Children’s Health Insurance Program, and a “low-income government program payer mix.”

Q: Are other leaders worried about hospital closures?

A: Healthcare leaders have warned that some hospitals may not be able to survive with reductions in Medicaid funding and the added cost pressures of treating more patients without insurance.

Jennifer DeCubellis, president and CEO of America’s Essential Hospitals, told Chief Healthcare Executive® in December that safety net hospitals face “an existential crisis.” Pending Medicaid cuts are adding to the crisis, she said.

“Before those cuts even happen, people are having to make the hard decisions,” she said. “Do we keep hospitals open? Do we keep all of our hospitals open? Do we have to have people drive further? Are there critical services, mental health, addiction, maternal care, pediatric care, that we have to look at differently?”

Rick Pollack, president and CEO of the American Hospital Association, told Chief Healthcare Executive® in February that it’s “more likely to see adjustments in terms of the array of services that are provided, as opposed to outright closures.”

But he said, “There could very well be closures, and we're very concerned about that.”

The Hospital and Healthsystem Association of Pennsylvania released a report in January warning that 12 to 14 hospitals could close within the next five years.

Nicole Stallings, president and CEO of the Hospital and Healthsystem Association of Pennsylvania, said in a January interview that hospitals are looking at tough choices with pending Medicaid cuts.

“All of our hospitals are evaluating a variety of scenarios and making plans which can include, unfortunately, service reductions, labor reductions, and even perhaps closure,” she said.

Q: Will the Rural Health Transformation Fund help prevent hospital closures?

A: The new federal program is slated to distribute $50 billion over a five-year period to improve rural health care. Lawmakers created the program as part of HR 1, at least in part to concerns that Medicaid cuts could push rural hospitals over the edge.

Hospital leaders say the money will do some good in rural areas. But they point out that the Congressional Budget Office has projected Medicaid spending will be reduced by $1 trillion over the next 10 years.

“I would never say that $50 billion is a modest investment in anything,” Pollack said in February. “But the fact of the matter is, when you compare it against the trillion dollars in cuts, proportionately, it doesn't fill any gaps.”

KFF, which examines health policy, estimates that Medicaid spending in rural areas will decline by $137 billion over 10 years.

Some of the money in the new rural program is also directed to primary care and programs aimed at keeping people healthy. Those are worthy objectives, but some healthcare leaders say they hope to see funds supporting rural hospitals.

Q: How many people are expected to lose Medicaid coverage?

A: About 10 million are expected to lose Medicaid coverage over the next decade, the Congressional Budget Office has said.

As many as 5 to 10 million could lose coverage in 2028, due to new work requirements for Medicaid beneficiaries and more frequent eligibility checks, according to a report released last week by the Urban Institute and the Robert Wood Johnson Foundation.

Hospital leaders warn that those without insurance will likely end up in emergency departments, possibly with more serious conditions. And more crowding in emergency rooms affects all patients.

Q: Are more vulnerable communities at risk?

A: Nearly 20% of the at-risk hospitals (85) serve areas with high levels of poverty, according to the Public Citizen report.

At-risk hospitals have larger percentages of Black and Hispanic residents, the report says. Those hospitals at risk served communities where 20% of residents are Hispanic, while 13% are Black. Among other hospitals, 13% of community members are Hispanic, while 9% are Black.