TRUCKEE/TAHOE, Calif./Nev. – The Tahoe Forest Health System or TFHS, classified as a critical access hospital, could be facing major changes after the passage of H.R. 1 earlier this year, also called the “One Big Beautiful Bill” by its proponents. The bill significantly changes how Medicaid is financed and eligibility for the program, which could impact how hospitals in rural areas like Tahoe and Truckee operate.

TFHS is designated as a critical access hospital, which means it falls under the following criteria: it is in a rural area located 15 miles from the nearest hospital in mountainous terrain, has no more than 25 inpatient beds, an annual length of stay of no more than 96 hours for acute care and offers 24/7 emergency care.

In previous years, it was named in Becker’s Hospital Review’s list of “Critical Access Hospitals to Know.”

But through the passage of H.R. 1, critical access hospitals and hospitals that service Medi-Cal and Medicaid payers took a major blow.

According to preliminary analysis from the Congressional Budget Office, the bill will reduce federal healthcare spending by approximately $3.4 trillion in the next decade, but will also increase the number of uninsured individuals by 10 million by 2034.

Certain Medicaid enrollees will also be required to have community engagement in the form of employment, school or volunteer work to remain eligible. This will be implemented by December 31, 2026. This could impact disabled people unable to work or attend school regularly, as well as those who have inconsistent work hours, who are often low-income to begin with.

Senate provisions added the Rural Health Transformation Program, a $50 billion fund to offset losses that rural health providers will experience. The $50 billion is distributed to all states between 2026 to 2030, meaning states will split $10 billion each fiscal year. Half of those funds will be distributed equally among states, while the other 50% will be distributed via applications.

The states of California and Nevada would be responsible for applying for this funding, which puts TFHS in a unique position—they have hospitals in Truckee, Calif. and Incline Village, Nev. But the hospital itself is anticipating changes.

“It is very early to accurately assess the impact of Medicaid cuts. The earliest Medicaid changes do not take effect until October 1, 2026. Others follow in 2028 and 2034,” said Meg Rab, director of marketing and communications for TFHS. “The Tahoe Forest Health System will be paying close attention to these changes as they near implementation. In addition, we anticipate policy legislation to emerge that may further change this landscape.”

Rab told the Sun that Medi-Cal payers represent about 16% of the TFHS payer mix. It is still unclear how many Medi-Cal insured patients would lose coverage in the area.

But policy legislation, especially in California, who has been opposed to many of the changes suggested in H.R. 1, could still shift the effects of what is happening to its hospitals. Still, the loss of hospitals in rural areas, such as Glenn Medical Center in Willows, Calif. has people on edge.

“The Tahoe Forest Health System has no plans for workforce reductions, closures or program changes,” said Rab. “There are many variables in play between now and when the cuts are slated to take effect. Anticipated policy legislation may impact what we think we know today. We will be following this closely.”

Eli Ramos is a reporter for Tahoe Daily Tribune. They are part of the 2024–26 cohort of California Local News Fellows through UC Berkeley.