US Hospitals Cut Spending After New Law
Hospitals across the U.S. are making spending cuts in response to the Trump administration's "big beautiful bill." The healthcare legislation has shifted reimbursement models and squeezed provider margins, with Democrats now using the impact on patient care and rural hospitals as a key line of attack for the midterm elections.
The "One Big Beautiful Bill Act," signed into law on July 4, 2025, introduced the most substantial cuts to federal healthcare spending in U.S. history. The legislation is projected to slash nearly $1 trillion from Medicaid over the next decade, in part by imposing new work requirements and stricter eligibility checks for recipients. The Congressional Budget Office estimates these changes will cause 10 million Americans to lose their health insurance coverage. In response to the anticipated revenue shortfalls, hospitals are implementing significant cost-saving measures, including workforce reductions, consolidation of services, and in some cases, complete withdrawal from certain markets. More than 25 hospitals have closed in 2025 alone, with thousands of healthcare workers being laid off. For example, Seattle Children's hospital announced it would lay off over 150 staffers, while Providence Swedish in the same area plans to cut nearly 300 jobs. Rural hospitals are facing a particularly dire situation, with more than 400 at risk of closure even before the new law's full impact is felt. These facilities are often the largest employers in their communities and the primary source of care, and their closure creates healthcare "deserts." To survive, many rural providers have been forced to eliminate critical services; between 2014 and 2023, 424 rural hospitals ceased offering chemotherapy services, and 293 have cut obstetrics services since 2011. Democrats have seized on the healthcare cuts as a central theme for the 2026 midterm elections, funneling millions into advertising that highlights the impact on voters. Campaign ads are being filmed outside of struggling hospitals, and feature personal stories of individuals facing rising insurance premiums. Strategists believe focusing on healthcare affordability will be a "banger of an issue" that resonates more with voters than other political headlines.
