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A MedPage Today opinion article by Terry Adirim argues that federal Medicaid reductions and a proposed H-1B visa fee could add pressure to rural hospitals already facing closures and staffing shortages. The policy estimates and potential effects are attributed to cited organizations and studies; the article does not establish that the proposed visa fee has taken effect or that specific hospital closures will result.
Terry Adirim, a physician and former leader of the military health system, says federal policy could intensify financial and workforce pressures on rural health care, citing projected Medicaid reductions under the 2025 budget reconciliation law and a proposed $103,265 H-1B petition fee. In an October 18 MedPage Today opinion article, Adirim argues that the temporary Rural Health Transformation Program cannot replace sustained funding for hospitals and other providers.
The 2025 budget reconciliation law, signed by President Donald Trump, is estimated to reduce federal Medicaid spending by $911 billion over 10 years and leave 10 million more Americans uninsured. KFF estimates that federal Medicaid spending in rural areas will fall by $137 billion over a decade. These are projections, not reported outcomes already measured after implementation. Adirim says the changes could affect rural providers because Medicaid covers one in four rural adults, half of rural births and about one-fifth of inpatient hospital discharges.
The administration and Congress have pointed to a $50 billion Rural Health Transformation Program as a response. Adirim welcomes investment but says the program lasts only five years and, citing KFF, amounts to little more than one-third of projected rural Medicaid reductions. He also says restrictions on how program money can reach providers could limit support for immediate operating needs. The American Hospital Association has urged the Centers for Medicare & Medicaid Services to loosen those restrictions, according to the article.
Adirim also warns that a proposed Department of Homeland Security fee could make it harder for rural facilities to recruit international doctors. The fee would apply to certain H-1B petitions subject to the annual cap. A 2025 JAMA study cited in the article found that more than 11,000 physicians were sponsored by H-1B visas in fiscal year 2024, and that rural counties relied on these physicians at higher rates than urban counties. The article does not say the proposed fee is in force.
Medicaid Supports Rural Hospital Operations
The debate matters because rural hospitals often have fewer nearby alternatives when a facility or service closes. Adirim cites data showing 193 rural hospital closures between 2005 and 2024 and says that distance can leave patients with limited access to care. A closure can affect emergency treatment, maternity services and routine appointments, not just a hospital’s balance sheet.
Medicaid’s role extends beyond coverage for individual patients: the program also generates revenue that providers use to maintain services and staff. If the projected reductions occur, hospitals could face difficult choices about workforce levels or which services to provide. The scale and timing of those effects at individual facilities remain uncertain. A short-term grant program may fund projects, but Adirim argues it cannot by itself guarantee stable operating revenue after its five-year period ends.
The workforce issue compounds the funding concern. Rural hospitals may depend on recruiting from outside the local area, including international physicians. If the proposed fee applies as described, it could raise the cost of some hires; the article does not quantify how many positions would be affected or establish that hospitals have already changed recruitment plans.
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Closures and Care Gaps Over Time
Adirim’s argument draws on longstanding access and financial pressures. The article reports that the share of rural hospitals providing obstetric services fell from 57% in 2010 to 48% in 2022. The Center for Healthcare Quality and Payment Reform estimates that more than 700 rural hospitals—about one-third of rural facilities nationwide—are at risk of closing. That estimate is a risk assessment, not a count of hospitals certain to shut.
The article also cites CDC figures showing the age-adjusted rural-urban mortality gap widened between 1999 and 2019: rural death rates were 7% higher in 1999 and 20% higher in 2019. It says rural residents face higher premature mortality from several major causes, while geography can make specialist care difficult to reach. Adirim illustrates that problem with an account from his time leading the military health system: a child in a rural community needed specialist evaluation unavailable locally, and the family ultimately moved to another military assignment. He contrasts that option with the limited ability of most families to relocate for care.
Technology and telehealth can extend access to some services, but Adirim says they cannot replace an in-person hospital or specialist in every situation. He points to emergency obstetric care as an example of a service that cannot be delivered by video consultation alone.
“Rural healthcare does need transformation. But first, it needs survival.”
— Terry Adirim, physician and former military health system leader
Projected Effects Are Not Outcomes
The Medicaid figures in the article are estimates of future spending and coverage changes. The article does not specify how reductions would be distributed among states, providers or services, or how individual rural hospitals would respond. The number and location of facilities that might close because of the law are not established.
The H-1B fee is described as a DHS proposal. Its final status, implementation details and effect on rural physician recruitment are not stated. The article also does not provide a final set of rules for the Rural Health Transformation Program or show how much direct assistance particular hospitals will receive. Those details will shape whether the program can address providers’ short-term financial needs.
Watch Funding Rules and Visa Policy
The next developments to watch are federal decisions on implementation of the Medicaid provisions and the Rural Health Transformation Program, including how CMS allows funds to reach rural providers. The American Hospital Association’s request for more flexible support is one sign of the debate over whether program dollars can meet hospitals’ immediate needs.
For physician recruitment, the status and terms of DHS’s proposed H-1B fee will determine whether the added cost applies to the petitions described by Adirim. Until those policies are clarified and their effects can be measured, claims about resulting hospital closures or staffing losses remain projections rather than confirmed outcomes.
Key Questions
What federal changes does the article warn about?
Adirim focuses on projected Medicaid spending reductions under the 2025 budget reconciliation law and a proposed $103,265 fee on certain H-1B petitions. The article presents the fee as a proposal, not an implemented policy.
How much rural Medicaid spending is projected to be reduced?
KFF estimates that the law will reduce federal Medicaid spending in rural areas by $137 billion over 10 years. This is a projection cited by Adirim, not a measured reduction that has already occurred.
What is the Rural Health Transformation Program?
It is a $50 billion federal program cited by the administration and Congress as support for rural health care. Adirim says it runs for five years and argues it cannot replace sustained Medicaid funding; the article also notes concerns about limits on how its funds may reach providers.
Has the proposed H-1B fee taken effect?
The source describes the fee as proposed by the Department of Homeland Security. It does not report that the fee has taken effect or provide a final implementation decision.
How many rural hospitals are at risk of closing?
The Center for Healthcare Quality and Payment Reform estimates that more than 700 rural hospitals, about one-third of rural facilities nationwide, are at risk. That estimate does not mean all of those hospitals are certain to close.
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