Iowa Medical Facilities Shutter Following Medicaid Reductions
Recent Medicaid funding cuts, which were initially dismissed as unlikely to impact hospital operations by Iowa Representative Zach Nunn, have led to significant disruptions in healthcare services across the state. Over the past year, seven medical facilities in Iowa have either closed, laid off staff, or scaled back services.
The changes are attributed to the enactment of the One Big Beautiful Bill Act (OBBB), a measure that Rep. Nunn supported and which aims to reduce Medicaid funding by $1 trillion by 2034. As a consequence, an estimated 15 million Americans risk losing health insurance coverage.
Healthcare analysts had cautioned that these financial reductions could severely affect hospitals and clinics that heavily depend on Medicaid reimbursements. Facilities situated in rural and economically disadvantaged areas are particularly vulnerable, given the high reliance of their populations on Medicaid.
“I think the myth here is that rural hospitals are going to close down,” Nunn remarked in an interview with WHO13 News in July 2025, shortly after the OBBB became law. “That’s not the case.”
Despite his assurances, MercyOne, a Catholic nonprofit operating several clinics across Iowa, has already closed facilities in Ottumwa and Traer. The organization has also reduced staff numbers in both Des Moines and Mason City. Patients in Ottumwa, which falls within Nunn’s district, must now travel up to an hour for medical services.
In a statement, MercyOne indicated that the Medicaid cuts were directly responsible for the layoffs in Des Moines, stating, “It is not possible to simply absorb such a significant financial impact without making thoughtful, forward-thinking changes.”
In a similar vein, January saw the Pella Regional Medical Clinic in Ottumwa scale back its family and general medical services, while the Southeast Iowa Regional Medical Center in West Burlington ceased birthing services.
Despite these developments, Nunn remains unrepentant for his support of the OBBB and has even launched a series of ads promoting the advantages of the legislation. As Nunn pursues a third term, he is regarded as one of the more at-risk Republican representatives in the upcoming elections.
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