Rural hospitals in Colorado are used to operating under a cloud of financial uncertainty, but recent policy changes could push many over the brink.

The potential for higher drug costs as a result of new tariffs as well as sweeping cuts to Medicaid supplemental payments have intensified the financial strain on facilities that already operate on razor-thin margins — jeopardizing their ability to keep the lights on, let alone invest in staff, technology, or new services. For the millions of Americans who rely on these facilities, especially in underserved and rural communities in the Centennial State, the result could be longer travel times for emergency care, fewer specialty services, or even entire regions left without a single hospital.

In July, President Donald Trump announced plans to impose tariffs of up to 200% on certain imported pharmaceuticals. While reducing reliance on foreign supply chains is an important long-term goal worth working towards, such dramatic action in the short term threatens to spike prices for generic and brand-name medications. Already stretched thin rural hospitals could be forced to absorb these costs or pass them on to patients, increasing economic pressures.

At the same time, recently passed legislation has curtailed the very tools that states such as Colorado use to sustain Medicaid funding for vulnerable hospitals. In fact, one estimate found $137 billion of such spending in rural areas could be cut over the next 10 years. By limiting provider taxes and upper payment limit arrangements, federal policymakers have effectively slashed critical reimbursement streams — especially for hospitals serving a disproportionate share of patients on Medicaid or that are uninsured. Further scheduled cuts to Medicaid Disproportionate Share Hospital payments will only deepen the wound.

Given the fact that nearly 200 rural hospitals across the nation have closed since 2005 and today more than 1 in 4 rural hospitals in Colorado are at risk of closure, the importance of programs that can help serve as a bulwark against these cuts becomes outsized. Rural hospitals serve as a pillar of their communities providing emergency care and essential medical services where no one else will.

Nationally, rural hospitals provide over 33 million outpatient visits and 4 million emergency visits each year—and research shows that rural hospital closures increase mortality by nearly 6% due to longer travel times and reduced provider availability. When these hospitals close, it’s not just a loss of services — it’s a loss of security, access, and in many cases, lives.

As these essential facilities navigate this challenging environment, the 340B Drug Pricing Program stands out as an important lifeline. For more than 30 years, 340B has helped safety-net hospitals purchase outpatient medications at a discount, allowing them to stretch scarce resources further and reinvest savings into programs that benefit their communities—from free clinics and cancer screenings to mental health and substance abuse treatment. In many ways, 340B has become a quiet workhorse of rural health care — keeping providers solvent, programs funded, and communities healthy. Without it many rural facilities simply could not afford to offer these life-saving treatments.

Yet despite the impact of this program, some in Washington are now proposing sweeping changes to the 340B program that would curtail its impact. Weakening it now, in the midst of economic and policy headwinds, would be a grave mistake.

While we can support ways to make the program run more efficiently and effectively, the notion that 340B imposes a serious burden on drugmakers — one of the common refrains of the program’s opponents — is simply not supported by the data. In 2022, drugmakers provided 340B discounts equal to just 3.1% of their global revenues and in return 340B facilities have historically provided a community benefit equivalent to more than double the amount of their 340B purchases. Simply stated, it is a program that is a small piece of the pharmaceutical market but has an outsized benefit to vulnerable patients and the facilities that serve them.

Policymakers in both parties should recognize the vital role rural hospitals play—not only in delivering care but in anchoring communities. As Congress and the White House consider changes to 340B or contemplate broader reforms to Medicaid reimbursements or pharmaceutical tariff policies, the guiding principle should be simple: do no harm to the institutions that serve those with the fewest options. Programs like 340B don’t just save money — they save lives.

The road ahead for rural health care in Colorado is uncertain. Let’s not make it impassable.

Ken Summers is the former chair of the Health and Environment Committee in the Colorado House of Representatives.