By Liz Carey for The Daily Yonder.
Broadcast version by Mark Richardson for Minnesota News Connection for the Public News Service/Daily Yonder Collaboration

When rural patients incur medical bills they can’t pay, the impact of the debt reaches far beyond their own personal pocketbooks, a new study has found.

Medical debt also impacts the hospitals that can’t collect on the debt and the communities they serve, according to a research brief from the Rural Health Research Center at the University of Minnesota. Although medical debt is something all communities have, it hits rural communities harder, Carrie Henning-Smith, co-director for the center, said.

Researchers interviewed rural hospital administrators in seven states – Arkansas, California, Illinois, Texas, Vermont, Washington and West Virginia – to look at the implications of medical debt on rural communities at large.

“We know how widespread medical debt is,” Henning-Smith said in an interview with the Daily Yonder. “We weren’t particularly surprised by anything we heard, but I think one thing that stands out to me is that this is not just an issue of healthcare facilities passing on big bills to patients and then patients shouldering that burden.” 

“This is really an issue that impacts individual patients, whole communities, and healthcare facilities, and I think smaller rural facilities that have a more tenuous bottom line are some of the most impacted,” she said.

Research indicates that about 44% of all U.S. adults are affected by medical debt, and that $88 billion in outstanding medical bills is currently in collections across the country. Researchers found the debts impact a rural hospital’s ability to continue paying their employees. With fragile bottom lines, rural hospitals are less likely to absorb the debt, respondents said.

A respondent from a Midwestern state said to the researchers, “One of the statistics that I think is really relevant is that we are about a $150 million organization… and 65% of those dollars go back in the form of compensation and benefits to our employees. So when we have medical debt that becomes excessive and we’re struggling to collect on the work that we do, it impacts our ability to employ [providers] and to serve our patients.”

With less revenue coming in, most respondents said, they are less likely to invest in equipment upgrades and their facilities, as well as less likely to hire more staff. Additionally, respondents said it’s harder to collect on that debt. 

“It’s a non-recourse issue. We can’t go back and take back what we’ve done,” a Southern state administrator told researchers. “You can’t repossess anything medical like you can with a car or a home or anything like that when there’s financial troubles. We end up really just getting unpaid, mostly.”

Researchers found that much of the blame for the debt issue is not solely because of patients who are underinsured. In many cases, insurance companies and other payers – including Medicare, Medicaid and Medicare Advantage – are not covering the cost of care that the hospitals provide.

“They need to have their cost recouped for the care that they provide,” Henning-Smith said, “and when they have patients who are uninsured or underinsured or when they are dealing with insurance companies and payers that are not providing a sufficient amount to pay for the cost of the care, then the facility suffers and the patients and community suffer too.” 

“It’s clear that our payer system is broken and that we have people whose care is not compensated at all or not at the rate that it needs to be to keep these facilities financially thriving,” she said.

Even if a patient is insured, some hospital administrators surveyed pointed out that underinsurance can create problems for patients and hospitals as well. High deductibles and plans with limited coverage options shift the responsibility for payment from the insurance company to the patient.

An administrator from the Midwest told the researchers, “Even the people who have the ability to pay, when you have more things like a high deductible health plan, no matter what your income is, it’s not easy for very many people if you have a $5,000 deductible. When that bill comes, that’s a difficult thing.”

Alan Morgan, CEO of the National Rural Health Association, said when rural hospitals don’t get paid, the impact is far reaching. Hospitals are typically among the largest employers in rural communities, and if a hospital fails because it can’t pay its bills, the whole community suffers.

“We’re in the midst of a hospital closure crisis and declining points of access to care in rural communities and it is because of bad debt, period,” Morgan said in an interview with the Daily Yonder. “When a hospital has to find ways to write off bad debt… for a lot of these rural hospitals, they’re operating on the margin and carrying large amounts of debt and uncompensated care that sometimes drives them to closure.”

When hospitals close due to financial problems, the economic hit on the community is multi-faceted, he said. The lost jobs not only reduce tax revenue coming into the community, but also impact the amount of consumer dollars being spent in the community. It means less income for businesses indirectly linked to the hospital, like flower shops, he said. And once the hospital closes, getting new families and businesses to move there becomes more difficult.

Fixing the issue will mean reforming how rural hospitals are reimbursed, Henning-Smith said.

“The message needs to continue to be about payment reform and understanding that medical debt is a widespread issue that’s not going away, but it’s not an individual issue and it’s not a matter of personal and individual responsibility,” she said. “It’s a community and a collective and a societal issue that if we don’t address, it’s not going to only impact the health and access to care of individuals, but it’s also going to impact availability of care in rural communities and places that need that care the most.”


Liz Carey wrote this article for The Daily Yonder.


get more stories like this via email

By Ilana Newman for The Daily Yonder.
Broadcast version by Eric Galatas for Colorado News Connection for the Public News Service/Daily Yonder Collaboration

In southwest Colorado, a rural electric cooperative is taking a big step towards energy independence and locally driven power decisions.

La Plata Electric Association (LPEA), a rural electric co-op for parts of Southwest Colorado, is in the middle of a two-year contract termination process to leave Tri-State, the generation and transmission organization that currently provides LPEA with electricity.

Rural electric cooperatives are member-owned, not-for-profit organizations that provide electricity to more than half of the country, including most of rural America. Established in the 1930s, electric co-ops were the government-backed response to a lack of investor-owned electric utilities in rural areas.

Venturing Out on Their Own

The cooperative model means that all customers of the electric co-op are also its owners. Each co-op has a member-elected board of directors that makes strategic decisions, most of which can be made without member approval, based on the bylaws of the individual co-op.

In March 2024, LPEA provided unconditional notice to leave Tri-State, starting a two-year stopwatch for the withdrawal from its contract and membership with the not-for-profit generation and transmission organization.

Leaving Tri-State "will allow us to invest locally and it will allow us to invest in a way that helps bolster economic growth in our service territory," said Chris Hansen, CEO of LPEA in a Daily Yonder interview.

Despite the member-elected board having control over decisions like leaving Tri-State, some members feel misrepresented by their board and do not support the move away from the Tri-State contract.

Dale Ruggles, a member of LPEA, expressed concerns that the LPEA board of directors is making decisions that do not reflect the feelings of their constituents. When asked what he would have wanted to see done differently, Ruggles said he wanted "a vote of the members, if the members vote to leave Tri-State, so be it".

Local control, cheaper prices, and flexibility with sourcing are what co-ops like LPEA hope to gain by leaving contracts with their current power suppliers.

But members who are against leaving Tri-State, like Ruggles, say that they are worried about the cost that will be put onto members and the potential volatility of being on the open market instead of in a consistent contract like with Tri-State.

The withdrawal from Tri-State comes with what some of these members see as more than a $200 million price tag."It's just too much debt, and they're not being transparent," said Ruggles to the Daily Yonder.

Hansen said that the money is a contract termination payment and not anything more than they were already contractually obligated to pay during their contract with Tri-State.

"It's not a punitive fine. It is the amount of debt we would have already had to pay if we stayed there," said LPEA board member Nicole Pitcher.

The payments are calculated by the Federal Energy Regulatory Commission (FERC) and are determined through a specific calculation that helps to maintain rate stability for the rest of Tri-State's members.

Moving Towards Renewables

Lee Boughey, VP of strategic communications for Tri-State, said that reliability and affordability are Tri-State's number one priorities. Boughey emphasized that Tri-State is owned and governed by its members - the distribution co-ops like LPEA all have representatives on the Tri-State board- and decisions like contracts are also dictated by the members. But part of that is allowing members to leave if Tri-State is not serving their own needs.

Rural electric co-ops are leading the way in energy innovation because of this member-driven governance. "It's part of the co-op model to respond to local demand and to do innovation," said Gilbert Michaud, a professor of environmental policy at Loyola University Chicago.

Tri-State is going through its own transition, led by the members. In 2020, Tri-State announced their Responsible Energy Plan, which laid out their plan to move away from coal and towards renewables like solar, wind, and hydroelectric power.

Boughey said that as renewable energy has become more affordable, generation and transmission co-ops like Tri-State have been able to invest in them more. "For cooperatives, reliability and affordability are critical, so it's only natural that you would see cooperatives add more renewables as those prices came down," he said.

Until recently, cooperatives haven't been on the same playing field as investor-owned utilities when it comes to developing their own utilities. As a non-profit organization, Tri-State does not have access to renewable energy tax credits that are available to for-profit companies. Rural electric co-ops are now able to take advantage of direct pay tax credits, the result of legislation passed in 2022.

"We're among the first cooperative utilities in the country to own large [scale] solar, so that's exciting," said Boughey.

However, for LPEA, leaving Tri-State is still the right option, according to Hansen. He also said that leaving will lower the co-ops cost of electricity immediately, putting less pressure on rates.

"We've got lower wholesale contracts on the day we leave. On April 1, 2026, our wholesale power costs will come down," said Hansen. Some of that power will be coming from power purchase agreements with Tri-State, different from the contract, which would have locked them into Tri-State's rates until 2050.

The total bill for members won't necessarily go down, because of other increasing costs like infrastructure, but Hansen added that "it takes the pressure off of our rate structure if your wholesale costs are flat or declining."

Boughey also said that Tri-State's wholesale contracts keep costs down for its members. He said their contracts allow for more consistency, whereas being on the open market could have more volatility. Tri-State's rates have grown 2.46% between 2017 and 2025.

A Trend Across the Country and the Region

Attempting to get out of traditional electricity contracts is not unique to Colorado.

In South Dakota, in 2023, the Eighth Circuit Court of Appeals upheld a decision by a federal judge that Dakota Energy Cooperative could not leave its contract with its wholesale power supplier, East River Electric Power Cooperative.

Dakota Energy Cooperative wanted to buy energy from Guzman Energy, a for-profit company out of Denver, Colorado, which has been a partner to many rural electric co-ops looking to leave their long-term contracts. But in South Dakota, this became a question of local vs out-of-state, with East River Electric taking the stance that local is better, even if it was coal-powered energy compared to the renewables that Guzman offered.

On June 1, 2025, Indiana electric co-op Tipmont left its contract with its power supplier, Wabash Valley Power Alliance, after multiple years of negotiations.

In the Southwest, four other electric co-ops have left contracts with Tri-State over the last decade. Kit Carson Electric Coop, in Taos County, New Mexico, was the first in 2016.

As of 2022, Kit Carson has reached 100% daytime solar energy-all generated locally-something they never could have done under the Tri-State contract.

Kit Carson CEO Luis Reyes, who has worked at the co-op for over 40 years, said starting in the early 2000s, the Kit Carson member owners were concerned about committing to long-term contracts with Tri-State, which at the time was primarily buying and producing coal-powered electricity.

"The co-op program has been great. I think it's the best model to deliver electricity to everybody with the members being the focal point," said Reyes."My opinion is we lost who the focal point was. We catered more to what Tri-State wanted than what our members wanted."

Reyes says since Kit Carson left in 2016, Tri-State has "really turned the ship," but in 2002 when Kit Carson first wanted to invest in renewables, "solar was bad," Reyes said, according to the board members of Tri-State at the time. But for Reyes, "it was good business, and it's what the members want." For Reyes and Kit Carson, leaving Tri-State was the way to accomplish their solar and renewable goals that the members wanted.

Kit Carson completed their $37 million contract termination payment in 2022 six years after formally withdrawing from Tri-State. That year, Kit Carson said their power rates were lower than any Tri-State member.

The pressures from members leaving, decreasing prices of renewables, and new voices at the table have brought Tri-State a long way from "solar was bad". Current contracts, which Boughey said have been signed by most members, increase the amount of local power that members can generate from 5% to 20%, giving members a lot more flexibility to develop their own utilities.

A lot has changed at Tri-State since Kit Carson left Tri-State in 2016, and Boughey said that any member has the ability to pursue leaving at any time, if the current policies aren't working for them. They continue to have good relationships with co-ops that have left, including LPEA which is in the process of leaving now.

"It's not a negative issue," said Boughey. "It's flexibility that our members want to have, that some members take advantage of, and we work very closely to execute those withdrawals in the spirit of the cooperative business model.


Ilana Newman wrote this article for The Daily Yonder.


get more stories like this via email

Despite debate in Washington over ending incentives to help Alaska's smallest places move away from traditional oil and gas-based power generation in the most remote parts of Alaska, one village above the Arctic Circle has found success and plans to invest.

Kotlik, a Yupik native village nestled on the banks of the Yukon River is using alternative energy as an economic driver.

Richard Bender, president and CEO of Kotlik Village Corporation, said the village has developed a three-phase plan to move away from oil and gas-based power to generate electricity for its 600 residents.

"Phase 1 is to purchase a battery storage system and switch gear," Bender outlined. "Phase 2 of Kotlik's energy plan is to produce energy using solar panels. Phase 3 is production of electricity using wind turbines."

Despite the success of places like Kotlik, and its aggressive plans for future alternative energy development, Washington lawmakers are debating a budget bill which would eliminate tax incentives for investing in clean power in rural Alaska, which could reduce funding for the projects the village depends on.

Kotlik collaborated with the Alaska Public Interest Research Group to produce a video about the project, which Bender noted goes beyond providing sources of alternative energy to the village.

"In addition to energy sovereignty, and sustainability, this project will have a positive impacts on health education and workforce development," Bender explained.

Bender added creating stability in those areas will spill over into different parts of the community and help the village keep people working at home, rather than moving to other places.


get more stories like this via email

The mayor of a rural Utah town said the clean energy investments and tax credits created by the Inflation Reduction Act are helping drive economic growth and diversify her town's energy portfolio.

Lenise Peterman, mayor of Helper, stressed tax credits have been vital for communities like hers as they help modernize their systems. But the budget reconciliation package now in Congress would eliminate major parts of Inflation Reduction Act funding, including clean energy investments.

Peterman said it could be detrimental to local people who have been able to harness the power of tax credits to grow their businesses.

"The jobs are there," Peterman emphasized. "We just need to ensure that we have the educational resources available - especially to people who may be transitioning out of a traditional coal plant or coal mining, to be able to step into those roles. But the roles are there."

She added while federal dollars in rural communities affect fewer people, their effect is triple that of urban communities. Peterman said the Inflation Reduction Act incentives will foster energy independence as power use and costs are projected to increase. Sen. John Curtis, R-Utah, has been an outspoken critic of sunsetting the credits.

Peterman pointed out Helper is in a unique position, since the town of about 2,200 residents owns and operates its own electric grid. It purchases power from transmission stations but Peterman said they face challenges due to the town's aging and limited infrastructure. She sees the tax credits as part of the solution.

"For me, it's about hardening the grid so that we can then incorporate other energy types, which I hope will drive costs down for the consumers," Peterman underscored. "Because now we'll have options and not be beholden to a single energy source."

Republican leadership in Congress is hoping to pass the big budget bill and have it signed by President Donald Trump before July 4. Peterman hopes politicians are able to reach consensus and do what is best for all, rural and urban alike.

"I'm hopeful that we can move past the partisan positions that people seem to be stuck in and do what's best for all of the people," Peterman added. "I really hope that comes to fruition."


get more stories like this via email