Medicaid cuts included in a recently signed tax and spending bill threaten to worsen mental health care access in rural America, where the public insurance program is already the single largest payer for behavioral health services. Experts warn that cuts over the next 10 years could force low-income rural families to pay for mental health care out of pocket while also driving farther to receive it, likely causing many to forgo treatment for depression, bipolar disorder, and other conditions requiring consistent care.
Existing Disparities to Worsen
Rural communities already face severe mental health care shortages. According to Ron Manderscheid, former executive director of the National Association of County Behavioral Health and Developmental Disability Directors, “The context to begin with is, even with no Medicaid cuts, the access to mental health services in rural communities is spotty at best, just very spotpy at best — and in many communities, there’s literally no care.” Rural suicide rates have nearly doubled over the past two decades, and rural areas already struggle with a shortage of mental health professionals compared with urban areas. One analysis found that cuts next year would leave 380 rural hospitals at risk of shutting down.
Medicaid Expansion Changes
States that expanded Medicaid eligibility under the 2010 Affordable Care Act will face significant federal matching reductions. The law cuts the federal government’s 90% matching rate for expansion enrollees to anywhere from 50% to 74%. Additionally, states must redetermine Medicaid eligibility twice a year for millions of expansion enrollees, and some recipients must prove work history. The law creates work requirement exceptions for those with severe medical conditions including mental disorders and substance use, but according to a KFF report, the exact qualifications and diagnoses for these exceptions have not been spelled out.
Real-World Impact
Healthcare providers across rural America express concern about the changes. Dr. Heidi Alvey, an emergency and critical care medicine physician in Indiana, noted that “You can’t work when your mental illness is not treated.” Dr. Ian Bennett at a California community health clinic anticipates significant strain on his facility’s finances when patients lose Medicaid coverage. Joseph “Chip” Johnston, executive director of Michigan’s Centra Wellness Network, described a landscape where psychiatric beds for children are now at least two hours away, with inpatient psychiatric facility stays costing $1,000 to $1,500 per night.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://idahocapitalsun.com/2025/07/24/medicaid-cuts-are-likely-to-worsen-mental-health-care-in-rural-america/