If Congress doesn't extend enhanced health care tax credits, 4 million rural Americans could face steep premium hikes

Average health care premium comparison before and after ACA credits for 10 'farm states.'
(Robert Woods Johnson Foundation graph)

Without the Affordable Care Act's enhanced tax credits, roughly four million rural Americans could see significant increases to their health care insurance premiums. Last year, the Health and Human Services reported that 17% of individuals who purchased insurance through the ACA marketplace were rural residents, reports Chris Clayton of Progressive Farmer.

While Washington lawmakers focus on eliminating programs that could use American tax dollars to pay for health insurance for illegal immigrants, "there is less talk about how much rural America relies on those tax credits," Clayton explains. "The tax credits have been a major driver for reducing the number of uninsured Americans."

In 2024, the Robert Wood Johnson Foundation reviewed "enrollment of Medicaid and marketplace policies in ten 'farm states,'" Clayton reports. "In that study, eight states -- all but Iowa and Kentucky -- showed more than 5% of residents were enrolled in ACA marketplace policies."

Without ACA enhanced tax credits, health insurance premiums may be out of reach for many rural Americans. According to the article, an individual making $35,000, with enhanced tax credits, would pay a health care premium of $1,033 per year. Without ACA credits, the premium jumps to $2,615 annually, representing a $1,582 increase.

"Overall, the enhanced tax credits saved rural enrollees an average of $890 per year, about 28% more than their urban counterparts," Clayton reports.

Clinicians in rural Idaho brace for Medicaid cuts that 'are already creating hurdles'

Pregnant women in Idaho often drive hours for
prenatal care. (Adobe Stock photo)

New rules for Medicaid have Idaho clinicians predicting more emergency visits, fewer residents with health care coverage and more maternity care deserts, reports Madeline de Figueiredo for The Daily Yonder. The systemic Medicaid changes will be the hardest on rural residents who tend to be more reliant on Medicaid.

Many Idaho medical providers see new Medicaid work requirements, income checks and possible co-payments as "changes [that] are already creating hurdles and could lead to major coverage losses and reduced access to care," according to the article. 

Coverage losses often increase emergency room visits because people delay care until their symptoms are so severe that they have no choice but to go to the emergency room. Individuals can be left with costly ED bills for care that could have been affordable if it had been sought sooner.

Idaho is already facing rural hospital closures and provider shortages, both of which impact prenatal care for expecting mothers and their babies. Figueiredo reports, "Bonner General Health, the only hospital with OB-GYNs in Bonner County, closed its obstetrics services in 2023. . . . All four OB-GYNs from Bonner County told NBC that Idaho’s strict abortion laws influenced their decision to leave."

The lack of obstetric care throughout the state means pregnant women often have to travel hours for care. Many are told to purchase insurance for emergency medical flights. Amy Klingler, a primary care physician assistant in Stanley, Idaho, told Figueiredo, “We encourage everyone, really, in our community to have that [coverage]. . . . Helicopter rides are probably anywhere from $25,000 to $50,000."

A housing program for working Americans is in 'political limbo'; more than 40% of its builds were in rural places

A new home built in Owsley County, Ky. with HOME
funding. (Partnership Housing, Ky., photo)

Since the 1990s, grants from the HOME Investment Partnership have helped fill financial gaps, so more affordable housing is available for working Americans. But the program's funding isn't included in the new federal budget, and its future remains uncertain.

The loss of HOME's investment in communities would be particularly painful for "Appalachian towns and rural counties where government aid is sparse and investors are few," report Charlotte Kramon, Jesse Bedayn, Michaela Herbst and Aaron Kessler of The Associated Press. Over the past 30 years, the program has "helped build or repair more than 1.3 million affordable homes of which at least 540,000 were in congressional districts that are rural or significantly rural."

Even though the program has spent more than $35 billion helping to address the country's affordable housing crisis, "a spokesperson for HUD, which administers the program, said HOME isn’t as effective as other programs where the money would be better spent," AP reports. Some Senate Republicans are working to save the program by including it in their draft budgets.

Despite the program's effectiveness in some regions, it is often criticized for its cumbersome red tape. Kramon adds, "A bipartisan group of House lawmakers is working to reduce HOME’s notorious red tape that even proponents say slows construction."

Meanwhile, its future remains in political crosshairs, where it is needed by working Americans, but is easier for lawmakers to eliminate without drawing public ire. Kramon explains, "HOME is an easier target than programs such as vouchers because most people would not immediately lose their housing."

If HOME funding is axed or even drastically cut, places like rural Owsley County, Kentucky, will feel it. "Affordable homes are needed there, but tough to build in a region that doesn’t attract larger-scale rental developments that federal dollars typically go toward," AP reports. "Partnership Housing in Owsley has relied on the program to build the majority of its affordable homes for at least a dozen years."

Given the new federal budget cuts, more affordable medical care for many Americans seems unlikely

Many Americans will pay more for health care in
the coming months. (Adobe Stock image)

Americans who hoped to see their medical costs decrease during the next four years are likely to be disappointed, as federal-level decisions aimed at cutting or reducing benefits take effect and other expenses are passed off to states and the public.

"Millions of people are expected to lose health insurance in the coming years as a result of the tax cut legislation, leaving them with fewer protections from large bills if they get sick or suffer an accident," reports Noam N. Levey of KFF Health News.

President Donald Trump "promised a rosier future while campaigning last year, pledging to 'make America affordable again' and 'expand access to new Affordable Healthcare,'" Levey writes. "Polls suggest voters were looking for relief."

People who purchase health insurance on state marketplaces can expect to see substantial increases over the next year, which may cause more people to drop coverage or opt for higher-deductible plans. Certain Medicaid enrollees may be required to cover copays up to $35.

For consumers who can’t pay their medical bills, there are fewer guardrails. Levey writes, "(In July), the Trump administration secured permission from a federal court to roll back regulations that would have removed medical debt from consumer credit reports."

Arika Sánchez, who oversees health care policy at the nonprofit New Mexico Center on Law and Poverty, sees how negative credit report "dings" can hurt a family struggling to survive. She told Levey, "When families get stuck with medical debt, it hurts their credit scores, makes it harder to get a car, a home, or even a job. Medical debt wrecks people’s lives.”

Overall, medical debt is a national problem and not a partisan issue. "About 6 in 10 adults — Democrats and Republicans — say they are worried about being able to afford health care, according to one recent survey," Levey explains. 

Congress allotted $50 billion to support rural hospitals over the next 5 years; many advocates say it won't be enough

Rural hospital often care for sicker patients with lower
incomes. (Photo by J.B. Morris, Unsplash)

The newly approved federal budget includes a $50 billion purse to help rural hospitals address current and future needs; however, many experts warn that the money, which will be managed through the Rural Health Transformation Program, may not be enough to cover foreseeable Medicaid and budgetary reductions. 

The plan "calls for federal regulators to hand states $10 billion a year for 5 years starting in fiscal year 2026," reports Sarah Jane Tribble of KFF Health News. "But health advocates and researchers doubt it will be enough to offset expected cuts in federal funding."

Meanwhile, many rural hospitals require additional financial support now and are likely to face shortfalls when federal cuts begin to take effect. "Nearly 1 in 4 people in rural America use Medicaid, the state and federal program for low-income and disabled people," Tribble explains. "People who live in the nation's rural expanses have more chronic diseases, die younger, and make less money." 

Out of the $10 billion allotted each year, "half of the money will be 'distributed equally' among states that apply to and win approval from the Centers for Medicare & Medicaid Services," Tribble explains. "States are required to submit a 'detailed rural health transformation plan' by the end of this year, according to the law."

The current CMS administrator, Dr. Mehmet Oz, "will determine how to distribute the other half, or $25 billion, using a formula based on states’ rural population and need," Tribble writes. The law says funds should be used by states and the CMS administrator "for such things as increasing use of robotics, upgrading cybersecurity, and helping rural communities to right-size their health care delivery systems.'"

While the plan is intended to fill funding gaps in rural health care, stakeholders are unclear about who creates state proposals and what measurements are required after funding is received. Sarah Hohman, the director of government affairs at the National Association of Rural Health Clinics, told Tribble, "There’s just some confusion about who actually gets this money at the end of the day. . . and what it is actually going to be used for?"

As health advocates review the program, some believe that politics, rather than the health of rural constituents, will drive how the $50 billion fund is spent. Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank headquartered in Washington, D.C., told Tribble, "As long as it’s a government slush fund where politics decides where the money goes, then there’s going to be a mismatch between where those funds go and what it is consumers need." 

Hospital advocates have two years to push lawmakers to repeal the most 'painful' parts of Trump's new budget

Hospitals are busy planning how to lobby for changes
in the new law. (Photo by P. Guillaume, Unsplash)

Since President Donald Trump's "One Big Beautiful Bill" became law, news headlines have warned how its Medicaid cuts will devastate local hospital systems. But many of those changes don't take effect until 2028, giving "hospitals [and] their armies of lobbyists and many allies on Capitol Hill. . . two and a half years to persuade lawmakers to rescind them," report Robert King, Amanda Chu and David Lim of Politico. "And 2028 is not only an election year, but a presidential one."

Chris Mitchell, the head of the Iowa Hospital Association, told Politico, "We’re going to talk to our delegation early and often about the impact of these cuts and how looming cuts down the road impact how hospitals run in the interim. . . . Are they really going to want to cut rural hospitals in an election?"

Congress does have a history of "delaying or repealing the painful parts of major legislation," King, Chu and Lim write. "Congress, for example, never allowed a tax on high-end 'Cadillac' insurance plans in 2010’s Affordable Care Act to take effect, and rescinded a tax on medical devices."

The stretch from now until 2028 gives hospital executives and health care advocates time to push Congress into making changes or to pull back cuts. Politico reports, "Several state-based hospital associations say they will ramp up meetings with lawmakers to stress the need for an off-ramp before the 2028 elections."

Eliminating Medicaid cuts comes with a downside for the U.S. economy and cost-weary consumers. "It’ll mean the One Big Beautiful Bill Act will be even more expensive than the Congressional Budget Office expects: $3.4 trillion in deficit spending over a decade," Politico reports. "That will have ramifications across the U.S. economy, exposing Americans to higher interest rates and slower economic growth, budget experts warn."

Rural housing support is on the chopping block. Proposal would cut billions from programs rural residents use.

The proposed budget would cut many USDA housing
programs that help rural Americans. (Adobe photo)

 

President Trump's newly released federal budget proposal cuts billions from rural housing support programs. "If adopted by Congress, key Department of Agriculture rural development and housing programs would be completely eliminated," reports Joe Belden for The Daily Yonder. "Major Housing and Urban Development programs that are important in rural areas also would get zero dollars next year, and many social safety net programs would be cut."

Similar cuts were suggested and rejected during Trump's first term, but this Congress may think differently.

The new budget ends funding for the 502 loan program, which has existed since the 1950s, and has helped "2.2 million low-income rural families to become homeowners," Belden writes.

Trump's 2026 budget cuts billions in U.S. Department of Housing and Urban Development disbursements by ending financial support for Community Development Block Grants and the HOME program, which "were used extensively in rural areas and small cities," Belden reports. "One of the federal government’s most important and largest social safety net programs, tenant-based rental assistance, would be cut by $26.7 billion."

Other proposed cuts that could impact rural communities include the end of the Low-income Home Energy Assistance Program, zero funding for the Community Development Financial Institutions Fund’s discretionary grants and the elimination of the Community Services Block Grant program.

Along with cuts, the proposed budget has a silver lining, which "says that it furthers investment in rural communities by creating a new $100 million award program that would provide access to affordable financing and spur economic development in rural America," Belden explains. "This new program would require 60% of Community Development Financial Institutions’ loans and investments to go to rural areas."

Congress will decide during its budgetary process how to act on the president's budget proposal.