Colorado’s General Assembly has averted major cuts to Medicaid to address the state’s $1.2 billion budget shortfall. However, if cuts from Congress become law through the federal budget reconciliation process, the health systems rural Coloradans rely upon will be in peril.

As leaders in delivering and researching health care in rural areas, we have witnessed the decline in Colorado’s rural hospitals over the past several decades due to aging infrastructure, demographic changes and financial challenges. We must actively work to turn this trend around.

Rural hospitals have long had an outsized effect on their local economies. They are often the largest employer in a community, provide high-paying jobs, and are essential to attracting and retaining small businesses. An analysis of the economic effect of rural health care estimates one rural primary care physician creates 26.3 jobs. Rural hospitals also provide local access to essential health care services.

Despite their immense value, 194 hospitals nationwide have closed or shut down inpatient services since January 2005. The reasons are many and complex. Rural hospitals contend with a mostly Medicaid and Medicare payer mix (which tend to pay lower rates than commercial insurers). They are often independent and small, creating a lack of negotiating power with private health insurance companies. The costs of drugs, supplies and equipment are rising and may become even more expensive under President Donald Trump’s tariffs. These vital facilities are on the brink of closure with nearly 50% of rural hospitals nationwide operating at a financial loss. Colorado has not had a rural hospital shutter its doors in the past 20 years, but 10 of 43 rural inpatient hospitals across the state — nearly 25% — are at risk of closing today.

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Since 2014, voluntary Medicaid expansion through the Affordable Care Act has sustained rural hospitals. Colorado was an early adopter, which dropped its uninsured rate to an all-time low of 4.6% in 2023. Medicaid expansion has generated positive effects on the economy through an increase in direct health care spending and average household income.

Currently, Congress is considering per capita caps on federal Medicaid spending, reducing the percentage the federal government pays for this jointly administered program, and implementing work requirements. These proposed cuts will substantially decrease federal dollars coming into the state and drive rural hospitals already on the brink to closure. Consequently, our General Assembly will be forced to make difficult Medicaid choices: change eligibility criteria, roll back benefits, reduce payments to providers, and more. Access to vital health care will be lost and rural communities will wither on the vine.

Medicaid cuts would quickly lead to an increase in the uninsured rate and more people losing local access to care. Individuals would start traveling longer distances to get what they need or skip services altogether. Cost of care then rises in two ways. First, by avoiding care, the costs for acute exacerbations of chronic illnesses rise. Second, if the rural hospital reduces services or closes, patients will be forced to seek care in urban facilities at likely higher costs.

An increase in the uninsured rate means more uncompensated care. This, combined with a decrease in Medicaid revenue, further destabilizes rural hospitals, many of which are already operating at negative or razor-thin margins. Unstable finances force these vital community institutions to make difficult decisions. They can shut down services their communities need, like labor and delivery or nursing home care. In the worst-case scenario, they are forced to close permanently. When services and facilities disappear, higher-paying health care jobs are lost. People drive elsewhere to work and may move away, leaving the local community with a decreased tax base. When rural or frontier communities lose health care, it makes it more difficult to retain younger residents or to attract businesses. Over time, ghost towns replace once-vibrant communities.

Investing in Medicaid and keeping care local is good for rural economies and people, especially children, the disabled and the elderly. This investment also benefits everyone by keeping the overall population healthy and reducing extra burdens on urban health care systems. We call upon our state and federal policymakers to strengthen — not cut — this valuable lifeline 1.2 million Coloradans depend upon.

Medicaid cuts put rural people’s lives and the mission-driven hospitals that serve them at risk. Investing in this important program preserves care in rural communities and helps ensure all Coloradans have access to primary care, laboratory and imaging services, physical and occupational therapy, emergency care, home health and hospice care, and nursing home services throughout their lives. Taking resources away will not only exacerbate geographic disparities in our state, it will represent a clear public disinvestment in our vital rural communities and people who deserve to live, play, work and age in the place they call home.

Kevin Stansbury is chief executive of Lincoln Community Hospital and Care Center. Liza Creel is associate professor of Medicine and Health Care Research at the Anschutz Medical Campus. Lauren Hughes is state policy director at the Farley Health Policy Center. Creel and Hughes are health policy researchers at the Anschutz Medical Campus.