Medicaid Cuts ‘Blow Up’ Financing Options for Rural Hospitals

The Medicaid cuts passed in President Donald Trump’s “Big Beautiful Bill” could push rural hospital systems out of the municipal bond market, according to Columbia Threadneedle Investments.

“Rural hospitals were already uninvestible, in our mind,” Shannon Rinehart, the firm’s co-head of muni investments, said in an interview. “What this has done is blow up any chance they have.”

Not-for-profit hospitals around the country depend on bond-market financing to build new facilities, upgrade existing property or buy new equipment.

Investors have been getting nervous about the sector since Republicans in July passed their budget bill cutting about $1 trillion from ...