The One Big Beautiful Bill Act is reshaping the financial foundation of rural health care in the Mississippi Delta, prompting local hospital leaders and policymakers to brace for more uninsured patients, higher uncompensated care costs and difficult decisions about which services communities can afford to keep. Even with a new federal Rural Health Transformation Fund meant to cushion the blow, local officials warn the money will not come close to offsetting projected cuts to Medicaid and other federal health programs that keep small hospitals afloat.
Deep cuts, limited lifeline
The One Big Beautiful Bill Act, enacted July 4, 2025, makes sweeping changes to Medicaid and Affordable Care Act marketplaces that are expected to drive down coverage levels and strain rural providers that already operate on thin margins. Policy analysts estimate Medicaid cuts in the law will reduce spending in rural areas by about $155 billion over 10 years, with rural hospitals projected to see a 21 percent decline in Medicaid reimbursement. Nearly one in five rural adults and about 40 percent of rural children rely on Medicaid or CHIP, making those reductions especially painful in communities where Medicaid already represents about 20 percent of a typical rural hospital’s payer mix.
To soften the impact, Congress created a $50 billion Rural Health Transformation Program to be distributed to states between fiscal years 2026 and 2030, half divided equally among states and the rest targeted based on rural population, facility concentration and hospital financial health. The fund can support activities ranging from provider payments and workforce recruitment to behavioral health, value-based care and cybersecurity, but national advocates and local leaders say it is time-limited and does not make up for the scale of cuts embedded elsewhere in the law.
Local hospital braces for more uninsured
At Delta Health System–The Medical Center in Greenville, leaders say they are planning for a future in which more patients show up with higher deductibles, more cost-sharing and, in some cases, no coverage at all. Chief Executive Officer Iris Stacker said the hospital expects scenarios “that may include an increase in patients with higher insurance deductibles, greater patient cost-sharing, and a possible rise in uninsured or underinsured individuals due to shifts within the marketplace and private insurance offerings.” She said the hospital is closely watching payer mix, reimbursement trends and patient utilization while working to maintain access to care in a community that already faces significant barriers.
Stacker said the hospital is tightening internal processes, strengthening financial counseling and charity-care pathways, and looking to expand grant-supported and value-based initiatives to help offset reimbursement pressures. Like many rural hospitals, she added, the system is trying to balance the need to remain financially sustainable with its mission to serve a region where poverty, chronic disease and transportation challenges already make it harder for residents to get timely treatment.
Senator: “Hospitals will have tough decisions”
State Sen. Derrick Simmons, a Greenville Democrat and Senate minority leader whose district includes much of the Delta, said the OBBBA lands on hospitals that were already relying on special state-directed payments to cover large amounts of care that patients cannot pay for. Mississippi never expanded Medicaid, he noted, so hospitals have leaned on a program called the Mississippi Hospital Access Program to help cover uncompensated care costs that reached more than $600 million last year and are “climbing.” Under the new law, those state-directed payments will be cut beginning in 2028, leaving hospitals more exposed as the number of uninsured residents grows.
“In the future, as state directed payments begin to decline, hospitals will have tough decisions to make about things like what service lines they are able to keep open,” Simmons said in written responses to questions from the Delta Democrat-Times. He said local leaders know patient outcomes are “almost always better” when people can be treated close to home, surrounded by family and community support, but acknowledged that some facilities will eventually reach “a breaking point” where closure becomes unavoidable.
Simmons said the biggest cuts in the OBBBA fall on hospitals, while the Rural Health Transformation Fund is time-limited and does not fully backfill what is being removed through Medicaid and marketplace changes. As the uninsured rate rises and state-directed payments decline, he warned, hospitals—especially in rural areas with more uninsured patients and a heavier reliance on Medicaid, Medicare and Medicare Advantage—will struggle to keep doors open and core services available.
Coverage losses and uncompensated care
National policy organizations, including the Kaiser Family Foundation and others, estimate that the Big Beautiful Bill will mean more than $1 trillion in cuts to federal health care programs and an increase of about 10 million in the number of uninsured people nationwide. Simmons said that in Mississippi, tighter marketplace subsidies and other shifts could cause “as many as 200,000” residents to lose insurance coverage. The law removes premium tax credits for people who enroll through income-based special enrollment periods and adds stricter eligibility verification, changes expected to particularly hurt rural residents who already face digital and geographic barriers to signing up for coverage.
Those marketplace changes come as enhanced premium tax credits created during the pandemic are scheduled to expire at the end of 2025, a double hit that will leave many rural families facing higher monthly premiums or no affordable options at all. On average, those enhanced credits save rural enrollees about $890 per year—roughly 28 percent more than their urban counterparts—meaning any rollback is likely to be felt more sharply in places like the Delta.
Mississippi hospitals are already seeing rising uncompensated care, and Simmons said last year’s $600 million statewide total is likely to grow as more people lose coverage or move into plans with deductibles they cannot realistically meet. As uncompensated care climbs, hospitals will have fewer resources to invest in staff, equipment and facility upkeep, which can feed a cycle of service reductions that further limit local access to care.
Medicaid work rules and hospital finances
Beyond direct payment cuts, the OBBBA tightens Medicaid eligibility through new work-reporting rules and more frequent coverage checks that could result in eligible people losing coverage because of paperwork hurdles. Beginning in 2027, most adult enrollees ages 19 to 64 will have to verify 80 hours of work per month, a requirement that can be difficult to meet in rural areas where jobs are seasonal or informal and where residents lack reliable broadband or transportation. The law also moves Medicaid eligibility redeterminations to every six months and reduces retroactive coverage from three months to one, steps that advocates say will drive “administrative losses” of coverage rather than reflecting actual ineligibility.
At the same time, caps on state-directed payments and changes to provider tax rules limit how states can use their own financing tools to shore up hospital budgets. In expansion states, state-directed payments will be capped at Medicare rates, and at 110 percent of Medicare in non-expansion states like Mississippi, with higher existing payments phased down over time. Provider tax rates in Medicaid expansion states will also be ratcheted down between 2028 and 2032, while non-expansion states see their rates frozen and new taxes banned, narrowing the options for states seeking to keep reimbursement levels from falling further.
High stakes for rural communities
Simmons said he sees particular vulnerability among rural hospitals, community health centers and nursing homes as the law’s provisions phase in over the next several years. Rural hospitals typically serve as health care hubs and major employers, and national advocates have urged federal officials to prioritize them when distributing Rural Health Transformation funds, rather than diverting money to larger urban systems or projects that do not directly benefit rural communities. The stakes are high in regions like the Delta, where losing a hospital can mean longer drives to emergency care, reduced access to specialists and a blow to local economies.
The law also intersects with existing workforce shortages and an aging population that requires more intensive care. Changes to federal graduate loan programs starting in 2026, including the elimination of Grad PLUS loans for new borrowers and new lifetime borrowing caps, could make it harder for rural students to afford medical school and return to practice at home, further tightening the supply of physicians and other clinicians. Simmons said all of these issues “are all connected,” with declining payments eroding the resources hospitals need to manage uncompensated care until some ultimately close.
Policy responses and unanswered questions
Simmons said one of the most important state-level responses would be to “explore insurance options, including Medicaid expansion, for working, low-income families” to replace some of the coverage being lost under the federal law. Short of that, he said, Mississippi must be “thoughtful” about how it spends its share of Rural Health Transformation dollars, directing the bulk of funding to rural hospitals that are taking the hardest hit from the OBBBA. He argued the state should focus on projects with benefits that last beyond the fund’s five-year window, such as facility upgrades and large-scale equipment purchases.
For now, however, key pieces of the implementation puzzle remain missing. Simmons said the application for Mississippi’s Rural Health Transformation plan has not been made public, making it difficult for lawmakers to evaluate whether the money is being targeted where it is most needed. He said he supports allowing the Joint Legislative Budget Office to work with the PEER Committee on a long-term study of the law’s impact on Mississippi and potential policy solutions.
Some local health organizations are choosing to sit out the public debate for now. In an email declining to answer detailed questions for this story, Delta Health Alliance Communications Director Rickey Lawson wrote that, “given today’s political climate,” it is “best for our organization to stay on the periphery of these types of discussions,” even as the group “certainly recognize[s] their importance.”
As federal rules are finalized and state plans drafted in the months ahead, hospital executives and policymakers in the Delta say they will be watching closely to see whether the One Big Beautiful Bill ultimately accelerates the region’s rural hospital crisis—or whether carefully targeted investments can keep local doors open long enough for a broader policy course correction.
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