What Medicaid Cuts Mean to One Rural Hospital

“I fell three stories,” Senecal explains. “I was on top of the scaffold and this new kid we hired didn’t put the braces on correctly.”

“I do construction,” she adds.

Like 70 million Americans—7.5 million of them in New York State—Senecal qualifies for Medicaid, the state and federally-funded public health insurance program that provides for the care of low-income patients. She also qualifies for Medicare, a health care program intended for those 65 or older or those living with a permanent disability. She’s what’s known as being “dual-eligible.”

At Columbia Memorial, 63% of patient service revenue is reimbursed through a combination of the two programs. But reimbursement by the federal government comes up short.

“We still provide care in our communities but we run a deficit every year,” says Dorothy Urschel, CEO of Columbia Memorial Health. “For many, many years, we’ve been reimbursed at well below cost.”

The hospital has the only emergency room serving the more than 110,000 residents scattered among 1,306 square miles in two predominately rural counties separated by the Hudson River south of Albany–Greene County to the west, Columbia County to the east.

“Of course, we’re struggling,” says Urschel. “But rural community hospitals always struggle.”

Bracing for federal cuts

A defining feature of rural life is distance.

Distance from grocery stores and gas stations, distance from schools and bus stops. It also means distance from hospitals.

“When you drive in my community,” says Urschel, “you’re in Hudson-proper and then you’re in farmland. That could mean that a farmer requires health care and he’s 35 minutes away from the hospital. We already have transportation issues. So many of our patients carpool, they get driven or they walk to their appointment.”

What health services are available to rural people are often patchwork. Family care in a strip mall. Medical imaging services in a converted farmhouse. A urologist with an office on a main street one or two towns over.

“Because they can’t get to a local facility, they do not receive the annual preventative care that they should be receiving,” says Urschel.

As a result, when people finally do arrive at Columbia Memorial’s emergency room, they often show up with higher levels of sickness and compounding ailments.

Like other rural hospitals across the country, Columbia Memorial is bracing for the loss of Medicaid-covered patients and funding because of the Republican reconciliation bill, dubbed the “One Big Beautiful Bill Act,” which was signed into law on July 4 by President Donald Trump. According to the nonpartisan Congressional Budget Office, the bill will cut $911 billion in federal Medicaid spending over the next decade and result in an estimated 10.3 million people losing their Medicaid health insurance. Rural areas are expected to lose $137 billion in federal Medicaid spending over the next decade, representing what Larry Levitt, vice president for health policy at the Kaiser Family Foundation, has called “the biggest rollback in federal support for health coverage ever.”

Add in cuts to the Affordable Care Act, the public health care option made available to all 50 states as an alternative to private insurance, and the number of people expected to lose their insurance rises to 16 million. This puts enormous strain on rural hospitals already underpaid by the reimbursements offered by federal health care programs, limited in the services they can provide, frequently understaffed and serving primarily those community-members in or near the verge of poverty.

Although the Senate added $50 billion in funding for a new “rural health transformation program,” it is hardly expected to offset the losses in the bill, which could vary widely from community to community across the country. What’s more, the fund will be temporary, whereas Medicaid coverage is ongoing. Trump-appointee leading the Centers for Medicare and Medicaid Services, Mehmet Oz, will determine how half of the fund will be distributed.

“All of us are trying to assess the impact of the bill,” Urschel says. “As you evaluate this, it could be certainly a devastating impact … but we are not cutting any staff. We are not doing that. Our strategy, along with the ultimate health system, is to continue to offer health care and advance health care in the community.”

Urschel points out that the hospital received a $5-million state grant to expand mental health services at the hospital, increasing the existing 22 inpatient psychiatry beds by 19 additional beds.

Yet, striking the right balance of staffing and providing the services patients need has been difficult for years. As the hospital is the largest employer in either Columbia or Greene County, any cuts to Medicaid could be felt as a one-two punch, with the effects of scaled back services, hours cut or jobs lost rippling throughout the local economy and social fabric. In 2023 more than 30% of residents in Columbia County relied on Medicaid for their healthcare; among children, the numbers jump to more than 40%.

In 2020, Columbia Memorial closed its maternity ward. While Urschel says the decision was based on lack of volume, rather than the motivation of economic stress, over the last two decades, 29 other hospitals in New York have likewise discontinued their labor and delivery services.

Without a hospital to give birth at in either Greene or Columbia counties, pregnant women in Hudson now drive 40 miles north to Albany Medical Center or 26 miles south to Northern Dutchess Hospital to give birth.

A recent study from the Journal of the American Medical Association found that more than half of rural counties now have no hospital-based obstetric services whatsoever.

Obstetrics is one of the most expensive services offered by rural hospitals, and as a result maternity wards are often the first services closed by struggling hospitals. 

According to the American Hospital Association, nearly half of all births in rural communities are covered by Medicaid, making maternity care even more vulnerable to the recent Medicaid cuts.

Hector, a nurse at Columbia Memorial who has worked at the hospital for decades, says that seeing the maternity ward go was a wake-up call to the community for services they assumed would always be there. He suspects that inpatient care will be the next shoe to drop. “The ER is always going to be open, but as far as [inpatient] services, there’s going to be changes.”

“A lot of people like to talk about how they were born in the City of Hudson,” says Michael Chameides, deputy minority leader of the Columbia County Board of Supervisors. “But if you’re born in a hospital, you’re no longer born in Hudson.”

For Chameides, the tragedy of the situation facing rural health care systems is that the cuts from the federal government are coming at a time when local communities need those funds the most.

“It’s not that health care was great before,” he says. “Health care was and is a big problem and we need real fixes to the system but they’re just gutting everything. And that’s going to be terrible for the health and safety of our community and the surrounding communities.”

A county committed to “taking care of each other”

Two months into Trump’s second term, Chameides introduced a resolution at a board of supervisors meeting that called on the state’s congressional delegation—two senators and 26 representatives—to oppose any proposed cuts to Medicaid but also to resist all cuts that could threaten a slew of other social services, most prominent among them the Supplemental Nutrition Assistance Program, formerly known as food stamps.

“The vote counts [in Congress] were going to be so close that if our state delegation opposed these devastating cuts,” Chameides recalls, “they wouldn’t happen.”

Less than a month later, on April 9, the Columbia Board of Supervisors, which is controlled by Republicans, passed the resolution unanimously.

Still, by June, when Congress voted on the bill, and with near unanimous Republican support in the House, Trump loyalists in the New York congressional delegation like Reps. Elise Stefanik and Claudia Tenney refused to align themselves with Democrats in order to scuttle the bill. (Tenney, who represents the most Republican district in New York—the 24th—introduced legislation to enshrine Trump’s birthday as a federal holiday.)

“Ultimately they’re pretending as if they’re not doing what they’re doing,” he says, “which was make massive cuts to health care and it’s terrible to see.”

That Chameides could rally unanimous bipartisan support to oppose Trump’s health care cuts speaks volumes about the pragmatic character of leadership in a rural county.

“What I see is that people in the county are generally really committed to taking care of their communities and taking care of each other,” says Chameides. “Ultimately, the county cannot solve the health care crisis on our own. Ultimately, we need federal support, but since we’re not getting it the state does need to step up and show up for working people in the way the federal government is not.”

The delayed-release capsule of federal changes

Five miles east of Hudson, on Highway 217, two dark blue Harvestore silos and a concrete grain silo stand next to a 250-year-old Dutch barn, and between them a greenhouse and a farm store called The Barn at Miller’s Crossing. Across the highway the land has been cleared and there’s a rolling field of sunflowers—acres of bright yellow heads bobbing up and down in the breeze.

“They’re actually for oil,” says farmer Chris Cashen, speaking from his truck. “We also grow produce and grain, beef and pork and vegetables.”

His grandparents bought land around here in the late 40s.

Growing up on the border of Claverack, population just under 6,000, when locals catch sight of a medevac helicopter, they know someone is being flown to the Albany Medical Center in the state’s capitol, the closest level one trauma center to Columbia County.

Cashen has heard about the cuts to Medicaid, but on his list of priorities to worry about, the budget of the federal government is far down on the list.

“Just having a regular family doctor consistently has been a real challenge for us. We’ve had four doctors in four years. They’ve all moved on. They won’t stick around,” he says. “So you’re advocating for yourself just to get an annual physical and some blood work to make sure that as I get older and my wife gets older and our kids grow up and go through stuff, we’ve got some baseline.”

Should Cashen ever become a big consumer of medical care, he allows he might feel differently. “If I were to put myself in the position of, oh, I just got diagnosed with something really tough and now I need to go get some services and then I find out that things have been cut, that would be a problem.”

The GOP, politically astute as to the devastation which the cuts will cause to financially vulnerable communities nationwide, wrote the bill to take effect like a delayed-release drug capsule.

The implementation of the cuts are staggered so that the worst side-effects of the budget changes won’t be felt until after the mid-term elections in 2026 are safely past.

Only then will the concrete data exist to measure the effects of the cuts to Medicaid, Medicare and the Affordable Care Act on the rural population and how the new work requirements will impact Medicaid enrollment.

Democratic party elected officials fear new Medicaid work requirements in the law, whereby all Medicaid recipients must biannually show proof that they are working 80 hours a month before they can receive benefits, will act as an additional barrier to enrollment.

These requirements were tried in Arkansas in 2018- and then abandoned after 18,000 people lost their health coverage and $26 million dollars were added in administrative costs. No meaningful impact on employment was demonstrated.

Additionally, $500 billion in cuts to Medicare are also coming, as United States senator from Massachusetts Ed Markey pointed out in a letter he sent to president Trump, the Speaker of the House Mike Johnson and the Senate Majority Leader John Thune. The half-trillion loss is the result of a budget trimming mechanism baked into the cake, as it were. The process known as sequestration, whereby a certain percentage of federal spending is automatically cancelled, is triggered when deficits are run up and are improperly offset. Those cuts will affect all Medicare recipients.

Neither Trump’s cuts to health care, nor his slash-and-burn campaign ostensibly carried out to find savings across every federal department come anywhere close to making up for the $3.4 trillion his budget added to the national debt. By passing tax cuts primarily benefiting the wealthiest Americans, with no plan on the horizon to make up the shortfall, sequestration will be triggered.

“There are some rural hospitals around the country,” says Chameides, “that have already started closing, anticipating what this is going to mean.”

Hospitals face more uncertainty

Markey’s letter to the Republican trifecta provided a list of 338 rural hospitals in danger of either closing or drastically scaling back services. The 338 hospitals on the list shared two things in common: They had experienced three consecutive years of negative total profit margins, and they were in the top 10% of institutions with patients on Medicaid.

Rural hospitals facing disaster are identified individually according to which state will see the losses. Kentucky, Louisiana and California top the list with 35, 33 and 28 rural hospitals identified as at risk of closure. New York has 11 rural hospitals on that list. Columbia Memorial is not one of them, however Garnet Medical Health Center Catskills, also in the Hudson Valley, is on the list. 

An estimated 1,796 hospitals remain in rural America, but those numbers obscure the level at which the services they offer may have already contracted. According to the Government Accountability Office, over the last decade more than 100 rural hospitals have closed across the country, 50 of them in just the last eight years.

In New York, as in every other state, as federal funding relied upon runs dry, it will be up to the governor and legislature to either make provisions for struggling rural hospitals or stand by and watch them collapse.

Rokosz MostMore by this author →

Rokosz Most is an itinerant word farmer currently toiling in New York’s Hudson Valley where he contributes to both mainstream and obscure outlets, including Hudson Valley One, the Times Union and the HV1 Almanac. Read his substack at rokoszmost.com