This article originally appeared in The Spokesman-Review.
If the hospital in the historic southeast Washington town of Dayton has to close, Acadia Murphey thinks the town will “probably die along with it.”
Murphey’s health hasn’t been the same since surviving thyroid cancer in 2007, and she visits Dayton General Hospital for physical therapy twice a week from her home 20 miles away.
Diseases like fibromyalgia, endometriosis and Crohn’s disease flare up with regularity – causing extreme fatigue, gastrointestinal difficulties and pain. Her symptoms often lead her to the emergency room in Dayton or in Walla Walla, more than an hour’s drive away.
Rural hospitals in Washington have spent the years since the COVID-19 pandemic on the brink as they care for patients who increasingly trend older, poorer and, like Murphey, beset with multiple medical conditions and therapy needs that make care more expensive. To stay solvent, the hospitals are largely bankrolled by the federal government’s Medicare and Medicaid insurance programs. But following passage of the One Big Beautiful Bill Act earlier this year, many rural hospital leaders say changes to Medicaid eligibility and payments in the coming years will equate to cuts and do irreparable damage to rural health care.
Relying on the 25-bed hospital to treat her chronic pain, Murphey worries the closest hospital to her in rural Eastern Washington will close. Columbia County Health System CEO Shane McGuire fears the same – calling the impact of cuts to Medicaid the “impending failure of rural health care.”
“People may be forced to move from their community, or we may no longer be able to provide that long-term care service,” McGuire said.
Under new federal law, Medicaid will be cut by $1 trillion over the next 10 years, and 10 million Americans will lose access to the program, according to the nonpartisan Congressional Budget Office.
The hospital in Dayton is often the only lifeline for the elderly and poor in Columbia County, which borders Oregon. It has the only emergency room within 30 miles, along with a wound care unit that provides treatment not available at urgent care clinics. A day care for children younger than 5 is attached to the medical campus – essential for a community where some child care centers never reopened after the pandemic.
McGuire says his hospital, Dayton General, is among several in Washington that could close.
“There’s six of us that are really on the edge of immediate risk of closure, and then numerous others that are at risk because they’ve got less than 60 days cash on hand,” he said.
Most of last year, Dayton General Hospital had less than 10 days cash on hand, he said.
“That is an impossible situation. You put that in the context of these cuts, and it’s just going to make a desperate situation worse,” McGuire said. “We have assisted living – 60% of those residents are Medicaid beneficiaries. And so while they’re not specifically targeted by the bill, if the state’s Medicaid system gets strained from lack of funding, they’re going to have to look at cuts everywhere.”
Central to the hospital is its small emergency room. While many other types of health care might wait until someone can drive to Spokane or Walla Walla, an emergency cannot wait.
“We don’t have an urgent care clinic around here,” said emergency room nurse Grace Coulston. “We have our clinics, but they can’t get people in for same-day care. We are the first line of defense here in this town for anything and everything.”
With Dayton’s elderly population, the ER often sees heart attacks, strokes and falls. It also acts as an emergency pharmacy because the only other pharmacy in town is open only during regular business hours.
With its limited space and resources, the goal for many patients in crisis is to stabilize and send them to a larger hospital – either by ambulance or life flight. But without that initial care, patients could travel up to an hour to receive emergency medicine, depending upon where they are located in the county, Coulston said.
Washington State Hospital Association Rural Health Vice President Jaqueline Barton True said the Association doesn’t anticipate hospital closures in the next year, but they are possible down the road.
“As I look out to 2028 – definitely have concerns,” she said.
Rural communities and their outsized number of Medicaid patients often rely on urban hospitals for higher-level specialty care. Urban hospitals are “going to have to make hard choices,” she said, on what services they will be able to offer.
According to the most recent census, about 17% of Washington’s population lives in rural areas. Across the state, there are 44 rural hospitals. Through 2035, Medicaid payments to these Washington hospitals will be cut by $6.2 billion, exacerbating uncompensated care, she said. The state projects 250,000 people will lose Medicaid coverage, and Barton True added that 150,000 more may lose insurance.
Mai Hoang
Beth Zborowski, chief financial officer for the hospital association, said Washington has multiple hospitals that have been financially fragile since the pandemic. Almost six years later, hospitals are just recovering.
Like many hospitals across the state, Dayton General has lost money each year since the pandemic. In 2023, the hospital lost $3.6 million. That trend reversed in 2024 when the hospital system ended with a surplus of nearly $580,000. But those gains do not make up for the losses of the previous half-decade.
Dayton serves an elderly patient base; 50% of its patients rely on Medicare. But the next largest payer is Medicaid, which covers 20% of patients.
Becky Gibson and her daughter live around the corner from Dayton’s hospital. Throughout her life, Kaylee Gibson had relied on the hospital’s physical therapy to improve her mobility in the face of a lifelong disability.
Kaylee’s CHARGE syndrome has caused many physical and developmental disabilities that require intensive treatment. Caused by a gene mutation during fetal development, CHARGE syndrome causes physical disabilities like hearing and sight loss, heart defects, and malformed ears and genitals. It also has developmental effects that slow growth and can lead to learning disabilities.
While she must go elsewhere for complex care, she has received physical therapy, speech therapy and other treatment from Dayton Hospital. She is often taken directly from school to the hospital on the bus.
She also is on Medicaid.
Columbia County Health System Chief Financial Officer Matt Minor is concerned a significant portion of its patient base could be disenrolled from Medicaid and that other patients’ care could be affected by both the federal and state Medicaid cuts. But the single greatest worry of the potential Medicaid cuts is the “uncertainty,” he said.
How does the One Big Beautiful Bill Act change Medicaid?
Signed into law by President Donald Trump in July, the One Big Beautiful Bill Act brings changes to the tax system and spending across the federal government. But the new law significantly reforms Medicaid, the government’s health insurance program for the poor.
The main requirement to receive Medicaid coverage had been a person’s income level. Beginning in 2027, Medicaid recipients will need to prove they work at least 80 hours a month or fit an exemption to qualify.
Those with qualifying exemptions include children, parents of children younger than 13, disabled people, certain veterans and Native Americans eligible for the Indian Health Service. The act also exempts those who are “medically frail or otherwise has special medical needs,” but leaves this exemption to be later defined by the Department of Health and Human Services.
Those beginning Medicaid coverage will need to prove they meet the work requirements at least a month before they apply and then again every six months. Individual states will be required to track the eligibility of recipients and remove coverage when residents are not compliant.
Other changes to the program include requiring copays up to $35 for each individual service Medicaid recipients receive, such as a clinic visit or picking up a prescription. States are currently allowed to tax hospitals, nursing homes and other providers up to 6.5% on patient services to pay for the state’s portion of Medicaid. The new law would lower that limit to 3.5% by 2031 – but only for states that have expanded Medicaid under the Affordable Care Act.
The bill also bans Medicaid coverage for undocumented immigrants. Immigrants with legal status will be allowed to apply for Medicaid only after being a lawful resident for five years. States are allowed to waive this waiting period for children and pregnant women.
These changes will lead to nearly $1 trillion in cuts to Medicaid in the next 10 years. The Congressional Budget Office has estimated the finalized law will lead to 10 million more Americans being uninsured by 2034, most of those losses coming from those who will not meet the job requirements or are unable to prove their work status each six months.
Clarity regarding the work requirements will come in June 2026 when HHS Secretary Robert F. Kennedy Jr. will release rules for implementation. States will then have six months to implement the work requirements. The law allocates $200 million for states to develop and implement compliance systems related to the work requirements.
The period left until work requirements need to be in place is not enough time, said Washington State Health Care Authority Medicaid director Charissa Fotinos. The state will request an extension of up to two years to implement the rules, she said.
During the first Trump administration, 13 states were allowed waivers to implement work requirements for Medicaid eligibility. Many of these states were not allowed to implement these requirements because of court challenges and the eventual rescission of their waiver during the Biden administration.
Georgia is the only state with Medicaid work requirements enacted. But only 8,078 Georgians were enrolled in Medicaid as of June 2025 – two years after the state’s work requirements were introduced. The state estimates that about 250,000 residents meet both the income and work requirements to qualify. The state has delayed enforcement of the work requirements until 2027 to allow more of those who are eligible to enroll.
While federal Medicaid cuts have received the most attention in recent months, Washington state lawmakers also cut funding for the program in the budget passed in June. Following a request by state Rep. Travis Couture, R-Allyn, the Office of Program Research, which provides nonpartisan analysis to members of the House of Representatives, estimated that the budget adopted by the Legislature had $782 million in cuts to Medicaid, including $446 million in federal funds and $336.5 million in state matching funds.
According to Couture’s office, about 95% of the reductions are to general medical care, services for people with disabilities and seniors, and long-term care assistance.
In a statement, Couture said the rush to adopt a budget in the session’s waning days with minimal input from Republicans made it difficult to know how much would be cut from the program.
“We did know Medicaid was being cut, but until we received these numbers from OPR … we had no idea to what extent. We had made some general assumptions and believed it might be somewhere around $200 million over four years,” Couture said. “We were shocked when we saw the actual amount of the cuts.”
Hayden Mackley, a spokesperson for the Office of Financial Management, pushed back on how the state Medicaid cuts would impact patient care.
“These reductions have a match component, so they did reduce federal Medicaid funding, but did not reduce eligibility, and are not expected to result in anyone losing coverage,” Mackley said in a statement. “This is in clear contrast to the impacts of H.R.1, which is expected to result in thousands of Washingtonians losing Medicaid coverage and benefits.”
Spokane Republican U.S. Rep. Michael Baumgartner, who voted for the One Big Beautiful Bill Act, said his team would offer “communication, listening and collaboration” as the changes to Medicaid are implemented by the state government, which administers the Apple Health program for children.
“Health care is 25% of the American economy, and there’s a lot of good things in American health care, but there’s also a lot of challenges. All of them are going to be part of the conversation both within and outside of this one bill,” Baumgartner said.
Asked about the bill’s impact to rural health care, Baumgartner pointed to a $50 billion fund included in the bill aiming to offset the costs to rural hospitals affected by the Medicaid cuts.
“The bottom line is we care about our rural health care clinics, we care about our rural population, and Congress is going to take steps to support them,” he said.
Baumgartner said he doesn’t know exactly how the fund will be disbursed, but he said his team will work with rural hospitals and the state to support that effort. He said he already has started speaking with state legislators about it.
“The reforms to Medicaid don’t take place until 2027, but in the lead-up to that, we certainly want to be prepared and to have them supported,” Baumgartner said.
The $50 billion fund was added in the days before the legislation’s passage to assuage the concern of some congressional Republicans from rural districts.
Based on Congressional Budget Office analysis, rural Medicaid spending would be cut by $137 billion over the next 10 years, meaning the $50 billion fund would cover 37% of the anticipated losses.
Centers for Medicare and Medicaid Services administrator Dr. Mehmet Oz said applications for the funds will be sent to states this month. The first funds will be awarded by the end of the year, long before cuts from the bill are implemented. But while the $50 billion will be expended in the next five years, the Medicaid cuts to rural communities don’t have a sunset date.
Asked about the fund’s impact on the Dayton Hospital, McGuire said he worries any funds that might reach him would be insufficient.
“I do believe there’s time because it’s a phased-in bill. But we’re nervous, right? We’re sort of sitting on the edge of our seat, because if it implements as designed, it is absolutely going to impact rural services, and I would say rural access,” McGuire said.
McGuire said he looks forward to working with Baumgartner and nearby Rep. Dan Newhouse, R-Sunnyside, on implementation .
What do other rural hospitals say?
Leadership of other rural hospitals in Eastern Washington said their hospitals were not at risk of closing even as they said the cuts would impede their ability to care for patients.
CEO Andy Bertapelle said Mid-Valley Hospital in Omak has served the community for nearly 60 years. While there will be changes to the 25-bed hospital, with 30% of its patients served by Medicaid, from the legislation, it is not at risk of closing, he said.
“This legislation is not good legislation as it relates to health care and health care reimbursement specifically. So whether you’re a rural hospital or an urban hospital, when these decreased reimbursements are implemented, and they start to take place, there will obviously be decreased reimbursements to our hospital, no different than any other hospital,” Bertapelle said. “… Also again, it’s not good legislation. There will be an impact, but I’m really firm in communicating to our community that Mid-Valley hospital and clinic is not at risk of closing.”
East Adams Rural Health CEO Corey Fedie said that while effects from the cuts are far from clear, any reductions in Medicaid funding would “have an impact on all departments and cause concern for loss of patient care for our community.”
“We believe members of our community will lose their coverage or be forced to move into less generous or higher-deductible plans because of this law,” Fedie said. “This will impact their health and raise charity care costs at our hospital. Rural communities on average have a larger proportion of Medicaid enrollees, so we are likely to feel this more acutely,” he said.
The hospital does not have any immediate plans to change the services offered.
“Once we understand the full impact of both the state and federal budget cuts and new taxes on hospitals, we will work with the hospital board to determine the best path forward for our community,” he said.
Ferry County Health CEO Brian Lady said payments from the $50 billion fund could more than offset losses in the small hospital in Republic.
Though about 18% of patients there use Medicaid, Lady does not believe those who lose coverage would affect the hospital’s viability.
“A lot of people kind of like the doom and gloom, but with a little bit of elbow grease and some creativity and a big dose of common sense, I think we’re going to be absolutely fine. We’re gonna not just survive, but thrive,” he said.
‘It is such a benefit to our lives’
When she moved from the Portland area to a small farmhouse in Eastern Washington, Murphey did not realize how difficult it would be to treat her chronic pain.
She moved during the pandemic to care for an elderly family member. She had previously lived in urban areas where hospitals and clinics were readily accessible.
Traveling twice a week to Walla Walla for physical therapy would not be possible. Without access to her therapy in Dayton, Murphey believes she would have to use a wheelchair.
Kaylee Gibson is deaf and blind, able to see only through pinhole vision and hear through a cochlear implant. Her many heart defects have required 32 surgeries. At 19, she has the mental capacity of a much younger child.
Her mother also grew up in Dayton. And in addition to caring for her daughter, she cares for her elderly father.
Becky Gibson drives her daughter to Spokane at least once a month for the complex care she needs. But without Dayton’s physical therapy, the family would not be able to stay in their hometown.
“They taught her as a baby to have enough strength to crawl. She couldn’t walk for years. But they worked with her and worked with her until she could,” Becky Gibson said.
Last month, the two went to a CHARGE Syndrome conference, where the 19-year-old played basketball with others who have the same diagnosis.
“Her dribbling the basketball blew me away. And hitting a volleyball over the net. And she could only do that because of the work she’s done for years at physical therapy. I was so proud of her and so grateful for them. Because I got to see her do that,” she said.
For several years after her daughter was born, Becky Gibson tried to use her insurance from her job at the state prison in Walla Walla to pay for medical expenses. But it was too much. For more than a decade, Kaylee Gibson has had a Medicaid waiver, which allows individuals to receive Medicaid benefits even if they do not fit the income requirements.
“My insurance would not cover the prescription stuff she needed. But once she got the Medicaid waiver thing, they picked it all up. It is such a benefit to our lives.”
Becky Gibson is not yet concerned about how the One Big Beautiful Bill Act will affect Medicaid. If anyone were eligible for a work requirement exception, she said, it would be her daughter.
She is much more concerned by the Medicaid cuts approved by Democrats in the state Legislature.
“I worry about a lot of things. With Medicaid, I worry because our state can’t manage money,” she said.
She does not expect her care at Dayton General or elsewhere to be affected, and as a lifelong conservative and supporter of Trump, she hopes the new law will be effective in preventing waste, fraud and abuse within Medicaid.
Becky Gibson is not alone in her beliefs in rural Washington. In last year’s Presidential election, Trump won 70.2% of the vote in Columbia County.
But other parents of disabled children with Medicaid waivers are concerned how the new law might affect them, even if they are exempted from work requirements.
Spokane mother Darcy Ludwig cares for her 22-year-old daughter, who is disabled and uses a Medicaid waiver. For her, Medicaid touches “every part” of her daughter’s life.
“Zoe needs 24/7 care. She needs someone with her at all times. She has breathing issues. She has seizures. We rely on Medicaid so that someone can be there for her,” she said.
While Ludwig does not worry her daughter would become ineligible, she worries that the state may cut access to home care aides because there is less money in Washington’s Apple Health overall after federal cuts.
“People tell me my daughter won’t be affected. But in the long term, any cuts to Medicaid will impact her. Every aspect of her care is wrapped up in Medicaid, so any cuts the state makes because they get less money will impact her,” Ludwig said.
Shawn Murinko, a Washington civil rights attorney and disability advocate with cerebral palsy who previously served on the Washington Human Rights Commission, said Washington state will have no choice but to make cuts that affect disabled people who rely on Medicaid.
“There is going to be millions of dollars less coming in. So either states will absorb those cuts or make cuts themselves. In Washington, there’s already a long wait list to receive a waiver. I think the biggest impact will be on the folks who need services, and they’ll just be left in this limbo,” Murinko said.
Ludwig is concerned that yearly assessments for her daughter to qualify for benefits might happen every six months – putting much greater strain on her to complete paperwork while caring for her. Becky Gibson echoed this concern.
“I love her. I’m going to take care of her forever. But please don’t make me do paperwork. Already now that takes so much of my time away from her,” Becky Gibson said.
Medicaid changes will also affect Spokane’s health system
Providence Health Care cited upcoming cuts to Medicaid as a contributing factor in recently closing three orthopedic physical therapy clinics in Spokane and Stevens County.
“These headwinds will only intensify when the cuts to vital safety-net programs that were included in the recently passed HR1, also known as the One Beautiful Bill Act, go into effect,” read a Providence news release announcing the closures.
Providence Inland Northwest CEO Susan Stacey is concerned those being removed from the Medicaid rolls may strain Sacred Heart Medical Center’s emergency room.
The hospital system has been losing tens of millions of dollars each year in the region since the pandemic. In 2023, Providence Inland Northwest collectively lost $114 million and $89 million last year. Stacey has promised Providence will “break even” by 2028.
Those plans could be slowed by Medicaid cuts.
“In 2026, we know we are going to be faced with additional state taxes and Medicaid cuts. The federal impact is something we know we need to make cuts now to really control what we can control with the unknown of the Big Beautiful Bill,” she said.
Asked how the cuts could impact MultiCare Deaconess hospital and Rockwood clinics in Spokane, spokesperson Kevin Maloney said MultiCare was still “evaluating the impacts” cuts could have.
“Despite the financial challenges ahead, MultiCare remains committed to serving our community’s health care needs,” he said.
The greatest hit to Spokane health care might be how Medicaid cuts affect CHAS Health, where 55% of its patient base are Medicaid recipients.
Of the 128,000 patients CHAS saw last year, 70,000 used Medicaid insurance. CHAS “paused” on new capital projects while they assess how these Medicaid cuts could affect their organization, according to Chief Administrative Officer Kelley Charvet.
She sees the law as a “reversion” of Medicaid to before the Affordable Care Act was passed in 2009.
“The health care delivery system will be gutted if all of these changes go through,” Charvet said.
CHAS itself is doing “a lot of scenario planning” to know how to move forward.
Reporters Mitchell Roland, Monica Carrillo-Casas and Orion Donovan Smith contributed to this article.
Orion Donovan Smith's work is funded in part by members of the Spokane community via the Community Journalism and Civic Engagement Fund. The Spokesman-Review originally published this story on Sept. 7, 2025.
