Eastern Kentucky Faces Nation's Highest Number of At-Risk Hospitals if Medicaid Cuts are Approved (includes Advent Health - Manchester & St Joseph - Berea)

If Congress's plan to cut Medicaid becomes law, Kentucky could lose up to $28 billion in federal funding for the program over the next decade, leaving hundreds of thousands without health coverage. Several sources highlight a significant concentration of these at-risk hospitals in that region, especially within the 5th Congressional District.

The loss of that funding would severely impact hospitals and could cause many rural hospitals and other healthcare providers to shut down completely. One estimate by the Sheps Center for Health Service Research at the University of North Carolina indicates that proposed Medicaid cuts could result in 35 rural hospital closures in Kentucky alone, more than in any other state.

All hospitals operate on very narrow margins, averaging 5.2%, which makes it difficult for them to stay afloat. These margins are even lower for rural hospitals (3.1%), non-profit hospitals (4.4%), and facilities with a high percentage of Medicaid patients (2.3%), making them especially vulnerable. Rural hospitals with the highest Medicaid patient share, common in Kentucky, had the lowest operating margins at 1.7%.

To identify which hospitals are most at risk, researchers looked at those in the top 10% nationwide for Medicaid payments and those that had negative operating margins over the past three years. The report found 338 such hospitals, 35 of which are in Kentucky. In other words, if Congress reduces Medicaid funding, at least one in three of every 10 hospitals at risk of closure nationwide would be in Kentucky.

Hospital closures of this magnitude would significantly reduce Kentuckians' access to medical care. Kentucky already has the second-longest drive times to a local hospital in the country, and rural residents face drive times that are 63% longer than those in urban areas. Closing rural hospitals due to Medicaid cuts would make it even harder for rural Kentuckians to get care, regardless of insurance. 

These closures would also lead to crowded urban hospitals as more people travel from across the state to seek treatment. According to one study, when patients have to travel further for care, they face an average of up to $8,300 more in hospital charges and are more likely to need surgery, facility transfers, inpatient admissions, and longer stays. 

Additionally, employment at rural hospitals is vital to the communities they serve. Over 90,000 Kentuckians work in hospitals, earning an average annual wage of $70,100 in 2024, nearly $10,000 more than the overall Kentucky workforce average for that year. These wages and salaries help sustain local economies and support other community sectors. If 35 hospitals close, it could result in serious economic impacts for rural areas that are already facing difficulties. 

The following is a list of the Kentucky hospitals identified as most at risk of closure under the proposed cuts to Medicaid: