Rural hospitals across California will be put on the brink of closure or forced to shut down services due to sweeping cuts to federal health care funding, state officials said Thursday.
California State Treasurer Fiona Ma and State Controller Malia Cohen were speaking at a news conference organized by the nonprofit For The Long Term, which works with local governments to deliver responsible fiscal stewardship.
Ma and Cohen said that while all the state’s hospitals will be impacted, rural hospitals will be hit hardest when the federal cuts laid out in H.R. 1 — also known as the “One Big Beautiful Bill” — go into effect.
Rural counties already receive less funding than urban centers, and many of them are struggling under financial pressures even without the federal funding cuts, Ma said.
She added that when H.R. 1 goes into full effect around October, millions of Californians will lose their Medi-Cal health coverage. The revenues of rural hospitals, which serve a disproportionate number of Medi-Cal beneficiaries, will fall drastically as a result.
Meanwhile, patients may delay seeking care for as long as possible to avoid costs in the absence of insurance. Then, when they seek last-minute care through emergency rooms, they find themselves with significantly higher bills.
The threat of hospital closures will be even more devastating in regions like the Bay Area, where the costs of living are already high, Cohen said.
“Rural hospitals are also often the largest employers in the community,” said Cohen. “Hospital closures can lead to job loss and have an overall destabilizing effect on the local economy.”
She mentioned failure to pay one’s property taxes and an exacerbation of homelessness as some of the ripple effects of hospital closures.
“The financial consequences are staggering,” she added.