Telehealth adoption is becoming common in the healthcare industry, aiming to improve the equitable allocation of healthcare resources across different counties and states. However, it could be a double-edged sword. On the one hand, the adoption of telehealth could benefit undeveloped areas where patients could access more resources from developed areas through telehealth. On the other hand, the adoption of telehealth could drain healthcare resources in developed areas, worsening the quality of life. Aiming to uncover the effect of telehealth adoption, we leverage a Quasi-natural experiment, states’ entry into the Interstate Medical Licensure Compact, with the difference-in-difference model by analyzing ten years of data across the counties in the United States. Our results reveal that joining interstate telehealth compacts does not necessarily improve the quality of life. In contrast, the adoption of telehealth increases patients’ physically unhealthy days. Also, we found that the rural rate moderates the main effect. Specifically, telehealth adoption benefits the rural area more than the urban area. Our findings have important managerial implications for policymakers.