Katie McKellar
Utah News Dispatch
Kane County Hospital, in Kanab, is one of the state’s most remote hospitals. It’s the furthest south, close to the Arizona border, and it’s more than an hour away from St. George, the nearest major city in the state.
Though it will likely take years for the full ramifications of the slashes to Medicaid benefits and other health care spending cuts included in congressional Republicans’ “big, beautiful bill” to come to fruition, Utah Hospital Association officials are concerned about what they could mean for the state’s health care system. In particular, they worry about rural hospitals, like the one in Kanab.
Matthew McCullough, rural hospital improvement director for the Utah Hospital Association, posed a hypothetical.
“Worst case scenario, they have to reduce services and they get rid of labor and delivery, and they close their maternity services,” he said, which he noted is usually the first service to “get cut, because it’s not a revenue generating service.”
So if labor and delivery services get cut, expecting mothers in that area would then have to drive more than an hour to St. George to the nearest hospital equipped to deliver their babies.
“An hour is an eternity if you’re going into labor,” McCullough said.
Kanab’s not alone. “A lot of communities in Utah, if they lost their hospital, they’re looking at an hour drive to the next location for emergency care,” he said.
For those living along the Wasatch Front, imagine needing to drive up to Logan to get to the nearest emergency room.
“That’s the kind of real world impact,” he said. “Health care isn’t about hospital finances. It’s about caring for people.”
Earlier this week after the megabill’s passage, the Utah Hospital Association issued a prepared statement warning of the bill’s impacts to hospitals’ ability to deliver quality care without increasing prices.
“While we support efforts to reduce waste, fraud, and abuse in the Medicaid system, we are deeply concerned about the magnitude of the Medicaid cuts included in this legislation,” the Utah Hospital Association said.
“These cuts will significantly impact the ability of Utah hospitals to deliver high-quality care in our communities and to keep healthcare costs down for patients,” the association continued. “We are disappointed that the Senate’s proposed reductions were ultimately signed into law. The result will likely be reduced access to care, higher insurance costs, and increased pressure on Utah’s state budget.”
The megabill pushed by President Donald Trump included about $1 trillion in total Medicaid cuts over 10 years, according to KFF, a nonprofit health policy research organization. That could result in a $4 billion to $7 billion loss in federal dollars for Utah, according to that analysis.
However, that analysis did not include the $50 billion provision that was added into the bill to create the Rural Health Transformation Program to provide state grants meant to help offset the impacts to rural hospitals. McCullough said that could help — the program is expected to provide about $100 million to Utah each year for five years — but it won’t fully offset the cuts. And it also depends on how Utah lawmakers decide to divvy up those funds.
A separate analysis by KFF estimated federal Medicaid spending in rural areas across the country is estimated to decrease by $155 billion over 10 years. In Utah, KFF estimated a total loss of $872 million in that time period.
While that’s a significant number, it pales in comparison to other states that have larger rural populations. Kentucky, for example, is expected to see the most dramatic decline, at an estimated drop of $12 billion.
Impact to rural hospitals
Rural hospitals, in particular, are expected to be hit the hardest.
“Rural communities have a higher proportion of their population that are on Medicaid,” McCullough said. “But, you know, these people are our farmers and ranchers. They grow our food, produce our energy. And they rely on Medicaid, and the hospitals and clinics that serve on them rely on Medicaid to pay them for the services they provide.”
Utah has 21 rural hospitals. Of those, 13 are “critical access hospitals,” meaning they’re designated by Medicare to ensure health care access in remote areas. To have that status, they must have no more than 25 inpatient beds, be located at least 35 miles from other hospitals, and provide 24/7 emergency care.
Of Utah’s 21 rural hospitals, nine are also known as the “Rural 9,” or part of the Utah Rural Independent Hospital Network, a nonprofit that formed to help financially stabilize those hospitals and improve their care in rural areas. Larger health systems, including Intermountain Health and others, own Utah’s other rural hospitals, which helps keep them financially secure.
Those not owned by larger health networks, like the “Rural 9,” said McCullough (who is also the network’s director), are likely the most at risk of losing services due to Medicaid cuts — though he emphasized that it’s not all “doom and gloom” for several reasons.
First of all, he said, “there’s no panic,” among rural hospitals right now because the cuts are not “immediate.” Hospital officials are concerned, he said, but it will likely take three to five years for the cuts to take effect and show their “real toll on hospitals.”
Second, Utah’s rural hospitals are generally in better financial positions than many in other states.
Even before the “big, beautiful bill’s” passage, more than 700 rural U.S. hospitals — one-third of all of rural hospitals in the country — were at risk of closure due to “serious financial problems,” according to an analysis by the Center for Healthcare Quality and Payment Reform. At the time, Utah had zero hospitals at risk of closure as of June 2025, though it did have six that reported losses on services, according to that report.
But now that Trump has signed the “big, beautiful bill” into law, state officials are still unpacking its impacts to Utah’s hospitals, and it’s not yet clear exactly how much revenue Utah hospitals will lose due to the Medicaid cuts and other provisions in the bill.
“We really don’t know yet,” McCullough said, adding that the Utah Hospital Association is trying to come up with a “model” to project what the impact will be hospital by hospital. He noted that those figures will likely depend on what Utah lawmakers decide to do with the state’s Medicaid programs in reaction to the cuts.
However, because of the sheer size of the federal cuts, he said it’s likely to mean a loss of hundreds of millions of dollars for Utah hospitals.
How will Utah lawmakers react?
Until Utah’s Republican-controlled Legislature decides how to handle the billions lost federal Medicaid dollars, it’s not yet clear exactly how many people will lose coverage and how much revenue will be lost for hospitals.
However, according to a report issued by the Congressional Joint Economic Committee’s Democratic staff, the bill puts at estimated 188,494 people in Utah at risk of losing coverage. That number goes up to 237,370 if Utah leaders decide to allow a trigger law to go into effect that ends the state’s Medicaid expansion program if the federal matching percentage is reduced.
There’s a long list of tough questions facing lawmakers now. Is Utah going to keep its Medicaid expansion program? Given the cuts, how will the state continue to fund its program? Who will continue to receive Medicaid coverage — and who won’t? And for hospitals, how will the state’s reimbursement rate for Medicaid change?
Spokespeople for both the state’s House and Senate Republican majority told Utah News Dispatch this week it’s too soon to provide answers to those questions.
“Senators are working with Utah’s Department of Health and Human Services to review the bill to understand its implications and proposed changes,” said Aundrea Peterson, deputy chief of staff for the Utah Senate majority. “Until there has been a more thorough review, it would be premature to provide answers.”
“We are only beginning to understand the full impact of these changes, and we expect to have a clearer picture in the coming months,” said Alexa Musselman, the House majority’s director of strategic communications, in a text to Utah News Dispatch. “That said, we fully support implementing a work requirement as a condition for receiving government assistance.”
In anticipation of the Trump’ administration’s appetite to impose work requirements on Medicaid, Utah state officials had already started drafting a new waiver to implement those requirements on Utah’s adult Medicaid expansion recipients — months before the “big, beautiful bill’s” passage. That waiver was submitted July 3, according to the Utah Department of Health and Human Services, and awaits consideration by federal officials.
However, the megabill’s cuts to Medicaid go far further than that waiver, and lawmakers will likely need to start dealing with its ramifications in a legislative session. That could be a special session this fall — or lawmakers may choose to wait until their general session in January.
Until those decisions are made, a cloud of uncertainty hovers over the future of Utah’s Medicaid programs. But one thing’s for certain: there will be a big hole in federal revenue that lawmakers will either need to find a way to fill or allow it to fall away.
Correction: An earlier version misspelled Matt McCullough’s name and incorrectly stated all hospitals outside of the Rural 9 network are owned my Intermountain Health. Intermountain Health owns some but not all of the other rural hospitals that are part of larger health systems.
This story was originally published by the Utah News Dispatch July 11, 2025