Medicaid cuts would hit rural areas hardest

by Scott S. Greenberger, Kentucky Lantern
March 17, 2025

Working-age adults who live in small towns and rural areas are more likely to be covered by Medicaid than their counterparts in cities, creating a dilemma for Republicans looking to make deep cuts to the health care program.

About 72 million people — nearly 1 in 5 people in the United States — are enrolled in Medicaid, which provides health care coverage to low-income and disabled people and is jointly funded by the federal government and the states. Black, Hispanic and Native people are disproportionately represented on the rolls, and more than half of Medicaid recipients are people of color.

Kentucky is more dependent on Medicaid than the nation as a whole. The program covers 1 in 3 Kentuckians or about 1.5 million people.

Nationwide, 18.3% of adults who are between the ages of 19 and 64 and live in small towns and rural areas are enrolled, compared with 16.3% in metro areas, according to a recent analysis by the Center for Children and Families at Georgetown University.

Among states, Kentucky’s small towns and rural areas have the fifth-highest percentage of non-elderly adults who are covered by Medicaid — 28.5%, according to the analysis. 

In 15 states, at least a fifth of working-age adults in small towns and rural areas are covered by Medicaid, and in two of those states — Arizona and New York — more than a third are. Eight of the 15 states voted for President Donald Trump.

Twenty-six Republicans in the U.S. House — including three from Kentucky — represent districts where Medicaid covers more than 30% of the population, according to a recent analysis by The New York Times. Many of those districts have significant rural populations, including House Speaker Mike Johnson’s 4th Congressional District in Louisiana.

Republican U.S. Rep. David Valadao of California, whose Central Valley district is more than two-thirds Hispanic and where 68% of the residents are enrolled in Medicaid, has spoken out against potential cuts.

“I’ve heard from countless constituents who tell me the only way they can afford health care is through programs like Medicaid, and I will not support a final reconciliation bill that risks leaving them behind,” Valadao said to House members in a recent floor speech.

U.S. House Republicans are trying to reduce the federal budget by $2 trillion as they seek $4.5 trillion in tax cuts. GOP leaders have directed the House Energy and Commerce Committee, which oversees Medicaid and Medicare, to find $880 billion in savings.

Trump has ruled out cuts to Medicare, which covers older adults. That leaves Medicaid as the only other program big enough to provide the needed savings — and the Medicaid recipients most likely to be in the crosshairs are working-age adults. But targeting that population would have a disproportionate impact on small towns and rural areas, which are reliably Republican.

Legislators seek to examine Kentucky Medicaid for ways to contain costs

Furthermore, hospitals and other health care providers in rural communities are heavily reliant on Medicaid. Many rural hospitals are struggling, and nearly 200 have closed or significantly scaled back their services in the past two decades.

Before the Affordable Care Act was enacted in 2010, there were far fewer working-age adults on the Medicaid rolls: The program mostly covered children and their caregivers, people with disabilities and pregnant women. But under the ACA, states are allowed to expand Medicaid to cover adults making up to 138% of the federal poverty level — about $21,000 a year for a single person. As an inducement to expand, the federal government covers 90% of the costs — a greater share than what the feds pay for the traditional Medicaid population.

Last year, there were about 21.3 million people who received coverage through Medicaid expansion.

One GOP cost-saving idea is to reduce the federal match for that population to what the feds give states for the traditional Medicaid population, which ranges from 50% for the wealthiest states to 77% for the poorest ones. That would reduce federal spending by $626 billion over a 10-year period, according to a recent analysis by KFF, a health research group.

Nine states — Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah and Virginia — have so-called trigger laws that would automatically end Medicaid expansion if the feds reduce their share. Three other states — Idaho, Iowa and New Mexico — would require other cost-saving steps.

“States will not be able to cover those shortfalls,” said Jennifer Driver, senior director of reproductive rights at the State Innovation Exchange, a left-leaning nonprofit that advocates on state legislative issues. “It’s not cutting costs. It is putting people in real danger.”

Studies have shown that Medicaid expansion has improved health care for a range of issues, including family planning, HIV care and prevention, and postpartum health care.

Kentucky legislature hastily adopts work requirement

Another idea is to require able-bodied Medicaid recipients to work. That would affect an average of 15 million enrollees each year, and 1.5 million would lose eligibility for federal funding, resulting in federal savings of about $109 billion over 10 years.

In Kentucky, a Medicaid “community engagement” or work requirement was hastily approved by lawmakers Friday night as an amendment to a bill creating a Medicaid oversight board to look for ways to contain Medicaid costs. The action was taken in the final hours before the legislature broke for a 10-day veto period when the Republican supermajority was trying to ensure they could override any gubernatorial vetoes when they return March 27-28 to wrap up the session.

Senate budget committee chair Chris McDaniel, a Republican from Northern Kentucky, defended the requirement. “The intent is that if you are an ablebodied adult, that you have to demonstrate some kind of a work effort, be that school, be that child care, be that community involvement job, whatever the case is, right, the intent is that you have to execute some type of task like that.”

Most adults covered by Medicaid already work; opponents of work requirements say they increase administrative costs and create paperwork burdens that cause people to lose coverage.

In heavily rural North Carolina, which has a trigger law, there are about 3 million people on Medicaid, and 640,000 of them are eligible under the state’s expansion program. About 231,000 of the expansion enrollees live in rural counties. Black residents make up about 36% of new enrollees under the state’s eligibility expansion, but only about 22% of the state’s population.

Brandy Harrell, chief of staff at the Foundation for Health Leadership & Innovation, an advocacy group based in Cary, North Carolina, that focuses on rural issues, said the proposed Medicaid cuts would “deepen the existing disparities” between white people and Black people and urban and rural residents.

“It would have a profound effect on working families by reducing access to essential health care, increasing financial strain and jeopardizing children’s health,” Harrell said. “Cuts could lead to more medical debt, and also poorer health outcomes for our state.”

Two of the North Carolina lawmakers with about 30% of their constituents on Medicaid, U.S. Reps. Virginia Foxx and Greg Murphy, represent heavily rural districts in western and coastal North Carolina, respectively.

Foxx has supported GOP budget priorities in social media posts. Murphy, a physician and co-chair of the GOP Doctors Caucus in the House, has focused his statements on taking care of what he says is abuse and fraud in the Medicaid system.

But North Carolina Democratic Gov. Josh Stein last week sent a letter to U.S. House and Senate leaders of both parties, saying the state’s rural communities disproportionately rely on Medicaid and that cuts would upend an already fragile landscape for rural hospitals in the state.

“The damage to North Carolina’s health care system, particularly rural hospitals and providers, would be devastating, not to mention to people who can no longer afford to access health care,” Stein wrote.

In Nebraska, 27% of residents live in rural areas, and state lawmakers are already scrambling to make up for reduced federal Medicaid funding.

Dr. Alex Dworak, a family medicine physician who works at an Omaha health clinic that serves low-income and uninsured people, said a dearth of health care options in rural Nebraska already hurts residents. He has one patient who drives up to three hours from his rural community to the clinic.

“It wouldn’t be just bad for marginalized communities, but it would be worse for marginalized communities — because things were already worse for them,” Dworak said of proposed Medicaid cuts. “It will be an utter disaster.”

Stateline reporter Nada Hassanein and Stateline’s Barbara Barrett contributed to this report.

This story is republished from Stateline, a sister publication to the Kentucky Lantern and part of the nonprofit States Newsroom network.

Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.