海角大神

The shutdown looms large in rural America 鈥� with Medicaid under debate

A battle over health care funding in Washington is reverberating in places like the hills and hollows of North Carolina鈥檚 Blue Ridge region.

The federal government is in a shutdown, centered around Democrats鈥� opposition to cuts in health care programs. Where Republicans see an opportunity to shrink the size of government, their opponents argue that the cuts will reduce access to Medicaid 鈥� and ripple out to affect the viability of rural hospitals that are already financially stretched.

It鈥檚 a key part of a larger national debate tied to the rising costs of health care.

Here in the mountain town of Spruce Pine, North Carolina, the local Blue Ridge Regional Hospital has Medicaid beneficiaries as a large share of its patients. It has found itself on a list of five possible hospitals in the state that could close, due to its financial losses over the past three years.

Since 1955, the hospital has provided emergency care 鈥� and until 2017 a birthing center 鈥� in one of the poorest corners of Appalachia, a fiercely independent, politically conservative area that voted by nearly 80% for Donald Trump in 2024. (The nearest other hospitals, one in Marion and one in Asheville, are at least a half-hour and an hour drive away, respectively.)

To raise the funds to even open the hospital, volunteers went door-to-door, collecting pennies.

鈥淚鈥檓 shocked that they are considering [closing the hospital],鈥� says John Richardson, an octogenarian folk artist in nearby Burnsville, North Carolina. He says such a move would diminish health care options for himself and others, in a region where navigating the long, winding mountain roads, especially in rain or snow, is more than a little tricky.

Rural hospitals and mounting costs

Nationwide, 48% of rural hospitals operated in 2023, according to the American Hospital Association.

鈥淎ltogether, 338 hospitals either experienced three consecutive years of negative total margins, serve the highest share of Medicaid patients, or both,鈥� Democratic Sen. Ed Markey of Massachusetts , warning Republican colleagues of how Medicaid cuts would affect rural individuals and hospitals.

The Republican One Big Beautiful Bill, signed by President Donald Trump on July 4, contained several , the federal-state health program for low-income Americans. The bill put new conditions on eligibility, including work requirements and more frequent eligibility checks. It also restricted states鈥� ability to use provider taxes to finance their Medicaid programs.

As a deadline for funding the government arrived on Sept. 30, with bipartisan support needed for passage, Democrats refused to support a bill unless it alleviated the health care cuts, which include reductions in Obamacare subsidies as well as the Medicaid changes.

The government shutdown flows from this impasse.

While many health policy experts are concerned about the challenges facing rural hospitals, conservatives defend the goal of reforming Medicaid and restraining its cost to federal taxpayers.

鈥淏y strengthening the integrity of Medicaid by eliminating waste, fraud, and abuse, its resources can be refocused on providing better care for those whom the program was designed to serve: pregnant women, children, people with disabilities, low-income seniors, and other vulnerable low-income families,鈥� a said as the changes were passed.

A report by Paragon Health Institute, a conservative think tank, argues that a surge in health care spending during the Biden administration was driven by 鈥減olicies that prioritized enrollment at any cost in both the [Obamacare] exchanges and in Medicaid expansion.鈥�

A bipartisan effort for rural communities

The Republicans鈥� big bill also created a $50 billion fund to bolster at-risk rural hospitals, but some experts say the fund is too small to address the challenges adequately.

Spruce Pine exemplifies the kind of small towns affected by the flux. With a population of around 2,000, it just saw its first freight train in nearly a year last week, as it recovers from the floods caused by Hurricane Helene a year ago. When resident Tricia Niven reopened her flood-damaged coffee shop, DT鈥檚 Blue Ridge Java, hundreds of locals showed up to celebrate.

Given the sensitive politics surrounding the government shutdown, Ms. Niven is hesitant to talk. Her one comment: 鈥淲e need the hospital.鈥�

That hospital is already in jeopardy. An agreement between the state and Hospital Corporation of America, which keeps the regional corporate hospital system open, is set to end in 2029. HCA has made some investments and created efficiencies. But the state has also sued it over low staffing levels and service problems.

When the birthing center here in Spruce Pine closed in 2017, it was partly because the expensive care wasn鈥檛 adequately covered, given that 40% of the women who gave birth there were relying on Medicaid to cover the payments.

Mergers and monopolies

Before allowing the merger of two hospitals in Asheville to create the consortium that includes Blue Ridge, the legislature mandated rate caps. But before the resulting Mission Hospital group was acquired by HCA in 2019, the system convinced the legislature to remove those caps.

鈥淭hat created, in effect, a government-created monopoly,鈥� says Spruce Pine resident Victoria Hicks, who has been part of a community effort to keep the hospital viable. 鈥淪o it鈥檚 a bird鈥檚 nest on the ground,鈥欌�� she says, referring to the hospital system that worked well before it was bought by HCA. Now, she adds, 鈥渨e鈥檝e seen what happens when you let a for-profit company operate in those kinds of conditions.鈥�

Many of the Medicaid cuts won鈥檛 take effect until after the 2026 elections.

In defending their position in the shutdown, President Trump and other Republicans have emphasized claims around unauthorized immigration and taxpayer-funded health care, through Medicaid in particular.

They say that Mr. Trump鈥檚 One Big Beautiful Bill imposed new restrictions, which Democrats are now trying to roll back, on federal funding for emergency treatment, to reduce access for unauthorized immigrants. Only about 1% of emergency Medicaid funding to hospitals goes to care for such immigrants, mostly for , , an independent health policy information group. And neither past federal law nor current Democratic proposals give unauthorized immigrants direct access to Medicaid.

But Republicans say the Biden administration granted parole to massive numbers of immigrants 鈥� making them eligible for taxpayer-funded health care, and straining the system.

Here in Spruce Pine, the idea that the hospital鈥檚 plight may be tied directly to national politics seems incongruous to some, given the facility鈥檚 long-running importance to many who make these Appalachian crags their home.

鈥淚 know when I was a kid, nearly 70 years ago, I remember going in and sitting in the waiting room and waiting on my parents who were visiting someone,鈥� says lifelong resident JoAnn Laskin. 鈥淚t鈥檚 always been very important to this area.鈥�