7 Minnesota Hospitals Face Closure Risk After Sweeping Federal Medicaid Cuts

New report flags hospitals statewide, as Hennepin Healthcare warns it could close without state action.

Apr. 15, 2026 at 2:43pm

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A ghostly, translucent X-ray image revealing the internal metal frame and medical equipment of a hospital bed, conceptually illustrating the vulnerability of critical healthcare providers facing funding challenges.As federal Medicaid cuts threaten the future of safety-net hospitals across Minnesota, an X-ray view exposes the fragile infrastructure supporting community healthcare.Minneapolis Today

A new report from Public Citizen has identified seven hospitals in Minnesota that are among 446 across 44 states and Washington, D.C. facing a heightened risk of closing, cutting services or laying off workers due to federal Medicaid funding changes included in a sweeping federal budget package signed by Donald Trump in 2025. The report says the law will significantly reduce federal spending on Medicaid and related programs over the next decade.

Why it matters

The hospitals identified as at risk serve communities with higher shares of low-income residents, as well as larger Black and Hispanic populations. The potential closures or service reductions could have a significant impact on access to healthcare in these underserved areas. One of the hospitals on the list, Hennepin Healthcare, is already facing a severe financial crisis and is at risk of closing without additional funding.

The details

The report identified hospitals as at risk if they had a Medicaid and low-income payer mix of at least 20% on average from 2022 through 2024 and negative profit margins over that same period. In Minnesota, the hospitals identified as facing a higher risk are Hennepin Healthcare in Minneapolis, Range Regional Health Services in Hibbing, Lakewood Health System in Staples, Mayo Clinic Health System (Albert Lea/Austin) in Austin, St. Gabriel's Hospital in Little Falls, Lakewood Health Center in Baudette, and Mahnomen Health Center in Mahnomen.

  • The federal budget package with the Medicaid funding changes was signed by Donald Trump on July 4, 2025.
  • The report analyzed data from 2022 through 2024 to identify hospitals at risk.

The players

Public Citizen

A nonprofit consumer advocacy organization that conducted the report identifying hospitals at risk of closure or service reductions due to federal Medicaid funding changes.

Hennepin Healthcare

A large safety-net hospital in Minneapolis that is already facing a severe financial crisis and is at risk of closing without additional funding.

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What’s next

Lawmakers in Minnesota are expected to take up a proposal this session to redirect or expand an existing local ballpark stadium sales tax to support Hennepin Healthcare long-term. Officials have warned that without action, the hospital's future could be in jeopardy.

The takeaway

The potential closure or service reductions at these hospitals, which serve vulnerable populations, highlights the significant impact that federal Medicaid funding changes can have on access to healthcare, especially in underserved communities. State and local leaders will need to take action to prevent these critical providers from shutting down.