Hospital Cuts Emerge as Midterm Flashpoint
U.S. hospitals are implementing budget cuts after the passage of a major healthcare funding package. The reductions are quickly becoming a key issue in the 2026 midterm elections, with Democrats launching attacks against Republicans over the potential impact on patient care and public health spending.
The healthcare funding package, officially known as the "One Big Beautiful Bill Act" (OBBBA), was signed into law on July 4, 2025. It represents the largest rollback of federal health care support in U.S. history, cutting over $1 trillion from health programs, primarily by slashing Medicaid spending by 12%. The law also permanently extends individual tax rates that were enacted in 2017. The Congressional Budget Office (CBO) estimates the legislation will lead to 10.9 million Americans losing their health insurance coverage by 2034. Key provisions include introducing work requirements for Medicaid recipients for the first time and reducing federal support for states to fund their Medicaid programs. These changes are projected to increase the number of uninsured people in the U.S. to over 40 million. Hospitals are expected to face a $661 billion cut over the next decade due to a combination of the Medicaid cuts, the expiration of Affordable Care Act (ACA) tax credits, and automatic Medicare spending cuts triggered by the bill's increase to the deficit. Rural hospitals are considered particularly vulnerable, with some analyses showing they will only be able to offset about one-third of their losses through a newly established $50 billion Rural Health Transformation Fund. In response to the cuts, healthcare providers have already begun to shut down clinics and hospital wards. For example, Seattle Children's Hospital announced plans to lay off over 150 staff members, and another Seattle-area hospital group is cutting almost 300 jobs. These actions are taking place as hospitals also face the end of Medicaid Disproportionate Share Hospital (DSH) payments, which help cover costs for uninsured patients. Democrats have made the hospital cuts a central theme of their 2026 midterm campaigns, arguing the law guts rural healthcare to fund tax giveaways. The Democratic National Committee has erected billboards near struggling hospitals in states like Missouri and Oklahoma with messages such as, "If this hospital closes, blame Trump." An increasing number of Democratic doctors are also running for Congress, centering their campaigns on the real-world impacts of the Medicaid cuts. Republicans defend the legislation as a necessary measure to curb government spending, reduce fraud, and rein in what they describe as waste in healthcare programs. They are countering Democratic attacks by focusing their own campaigns on the law's tax cuts and other issues like immigration. The Republican National Committee chairman stated they are working to "bring affordability to the people." Major unions and progressive groups are launching substantial advertising campaigns to oppose the cuts. The Service Employees International Union (SEIU) is running an eight-figure campaign in multiple states, featuring healthcare workers sharing stories of how the cuts threaten access to care for their communities. These ads are running on major platforms, including during NFL games in key districts. Public polling indicates significant voter concern about the healthcare law's impact. A KFF survey found that 72% of Americans believe the measure would cause people to lose health coverage and 71% think it would negatively affect healthcare providers. Health care affordability is expected to be a defining issue for voters in the 2026 elections.
