If Congress’ plan to cut Medicaid becomes law, Kentucky could lose up to $28 billion of federal funding for the program over the next 10 years, leaving hundreds of thousands without health coverage. The impact of that funding loss on hospitals would be severe and could lead to many rural hospitals and other health care providers shutting down entirely. One estimate by the Sheps Center for Health Service Research at the University of North Carolina shows that the proposed cuts to Medicaid risk 35 rural hospital closures in Kentucky alone, more than any other state.
All hospitals run on very thin operating margins (5.2% on average), meaning they generally struggle to stay afloat. Moreover, those margins are even lower for rural hospitals (3.1%), non-profit hospitals (4.4%), and those with large shares of patients covered by Medicaid (2.3%), leaving those facilities particularly vulnerable. Rural hospitals with the highest share of patients covered by Medicaid, as are common in Kentucky, had the thinnest operating margins at 1.7%. To determine which of these hospitals are most at risk, researchers identified those in the top 10% of the country for receiving payments from Medicaid and those that finished the past three years with a negative operating margin. The report identified 338 such hospitals, 35 of which are in Kentucky. In other words, if Congress cuts Medicaid, for every 10 hospitals at risk of closure in the U.S., at least one would be in Kentucky.
Hospital closures of this magnitude would dramatically reduce the ability of Kentuckians to receive medical care. Already, Kentucky is in the region that has the second longest drive times to a local hospital in the country, and people who live in rural parts of our region face drive times 63% longer than urban residents. Closing rural hospitals because of Medicaid cuts would make medical care even more difficult for rural Kentuckians to receive, regardless of how they are insured. Closures would also mean that the remaining hospitals, largely situated in urban areas, would become crowded as an influx of people from across the state travel to get care. When forced to travel further for medical care, according to one study, patients are subjected to an average of up to $8,300 more in hospital charges, and are more likely to require surgery, facility transfers, inpatient admissions and longer inpatient stays.
Additionally, employment in rural hospitals plays an important role in the communities where they are situated. Over 90,000 Kentuckians work in hospitals, earning an average annual wage of $70,100 in 2024, nearly $10,000 more than the total Kentucky workforce average that same year. Those wages and salaries help to sustain local economies and support other sectors in the community. If 35 hospitals close, it could have severe economic consequences for rural regions that are already struggling.
The following is a list of the Kentucky hospitals identified as most at risk of closure under the proposed cuts to Medicaid:
- Whitesburg ARH Hospital
- Highlands ARH Regional Medical Center
- UofL Health – Shelbyville Hospital
- T.J. Samson Community Hospital
- St. Claire Regional Medical Center (UK St. Claire)
- Middlesboro ARH Hospital
- Spring View Hospital
- Advent Health Manchester
- Bourbon Community Hospital
- Harlan ARH Hospital
- Deaconess Henderson Hospital
- CHI Saint Joseph Health – Saint Joseph Mount Sterling
- Tug Valley ARH Regional Medical Center
- Owensboro Health Twin Lakes Medical Center
- Baptist Health Corbin
- Clark Regional Medical Center
- Baptist Health Deaconess Madisonville
- The Medical Center at Albany
- Three Rivers Medical Center
- Kentucky River Medical Center
- TJ Health Columbia
- Pineville Community Health Center
- Mercy Health – Marcum and Wallace Memorial Hospital
- ARH Our Lady of the Way Hospital
- Casey County Hospital
- Carroll County Memorial Hospital
- The Medical Center at Caverna
- Ephraim McDowell Fort Logan Hospital
- Mary Breckenridge ARH Hospital
- Jane Todd Crawford Hospital
- Barbourville ARH Hospital
- CHI Saint Joseph Health – Saint Joseph Berea
- Russell County Hospital District
- McDowell ARH Hospital
- Fleming County Hospital
