Rural healthcare is in the red as Trump withholds Medicaid payments to Minnesota
Governmental action (or inaction) that affects America at large often has an outsized impact on rural residents.
At the end of February, the Trump administration announced it will withhold millions of dollars in Medicaid reimbursements to Minnesota, citing concerns about fraud. This comes on the heels of GOP cuts to Medicaid in the and an effort to , which would .
explains how rural inequality manifests in this scenario: to operate with negative profit margins. And cuts to public payer programs, like Medicare or Medicaid, disproportionately threaten these hospitals by increasing the rate of , or services for which hospitals receive no payment.
The following map shows the percentage of revenue in rural hospitals that comes from federal and state-level health insurance programs for low-income families.
All hospitals receive reimbursements from programs like Medicaid, CHIP, or state-level health insurance programs. In rural hospitals, Medicaid accounts for about of discharges. But that share varies from hospital to hospital, depending in part on how much of the surrounding population relies on public insurance.
Keep in mind that this map does not reflect payer mix, or the share of the total population that receives governmental health insurance assistance for low-income families. It only shows the share of revenue derived from low-income assistance programs, which is not directly proportional to the share of patients on those programs.
Data for this analysis comes from , a website created by the , a national policy organization that advocates for improvements in healthcare systems.
Trump Administration Withholds Minnesota Medicaid Funds
In a Feb. 25 at the White House, CMS Administrator Mehmet Oz announced that the Trump administration plans to withhold $259 million from Minnesota鈥檚 Medicaid program. Oz claimed that for low-income families went to bogus organizations and a behavioral health clinic that paid doctors to work 24 hours a day for more than 450 days.
, Minnesota Gov. Tim Walz criticized the agency鈥檚 method of combating fraud, stating that the Trump administration is on a 鈥渃ampaign of retribution,鈥 and that Medicaid cuts would be 鈥渄evastating鈥 for working families across the state. 鈥渟ent to investigate fraud are shooting protesters and arresting children,鈥 .
Minnesota Attorney General Keith Ellison called the Trump administration鈥檚 plans unlawful, .
, a Minnesota nonprofit that offers affordable housing to people with disabilities, is funded almost entirely through Medicaid reimbursements. Director of Accessible Space Josh Berg told that 鈥渁ny cuts to Medicaid funding will directly result in reduced services.鈥
And many rural hospitals in Minnesota 鈥 and across rural America at large 鈥 face similar circumstances. Thirty-nine of Minnesota鈥檚 98 rural hospitals have negative operating margins, according to Daily Yonder analysis of CMS data.
Some hospitals with persistently negative operating margins manage to stay afloat by relying on nonoperating revenue, or revenue that comes from sources like taxes and philanthropy. But even that cushion isn鈥檛 always enough. More than in the last decade alone, forcing rural families to travel further to get the care they need.
Trump鈥檚 campaign against supposed fraud isn鈥檛 an abstract war in rural Minnesota. In communities where hospitals operate on thin margins, even small cuts in federal spending can destabilize entire systems of care.
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