States will share $10 billion for rural health care next year in a program that aims to offset the Trump administration\u2019s massive budget cuts to rural hospitals, federal officials announced Monday.<\/p>\n\n\n\n
But while every state applied for money from the Rural Health Transformation Program, it won\u2019t be distributed equally. And critics worry that the funding might be pulled back if a state\u2019s policies don\u2019t match up with the administration\u2019s.<\/p>\n\n\n\n
Officials said the average award for 2026 is $200 million, and the fund puts a total of $50 billion into rural health programs over five years. States propose how to spend their awards, and the Centers for Medicare and Medicaid Services assigns project officers to support each state, said agency administrator Dr. Mehmet Oz.<\/p>\n\n\n\n
\u201cThis fund was crafted as part of the One Big Beautiful Bill, signed only six months ago now into law, in order to push states to be creative,\u201d Oz said in a call with reporters Monday.<\/p>\n\n\n\n
Under the program, half of the money is equally distributed to each state. The other half is allocated based on a formula developed by CMS that considered rural population size, the financial health of a state\u2019s medical facilities and health outcomes for a state\u2019s population.<\/p>\n\n\n\n
The formula also ties $12 billion of the five-year funding to whether states are implementing health policies prioritized by the Trump administration\u2019s \u201cMake America Healthy Again\u201d initiative. Examples include requiring nutrition education for health care providers, having schools participate in the Presidential Fitness Test or banning the use of SNAP benefits for so-called junk foods, Oz said.<\/p>\n\n\n\n
Several Republican-led states \u2014 including Arkansas, Iowa, Louisiana, Nebraska, Oklahoma and Texas \u2014 have already adopted rules banning the purchase of foods like candy and soda with SNAP benefits.<\/p>\n\n\n\n
The money that the states get will be recalculated annually, Oz said, allowing the administration to \u201cclaw back\u201d funds if, for example, state leaders don\u2019t pass promised policies. Oz said the clawbacks are not punishments, but leverage governors can use to push policies by pointing to the potential loss of millions.<\/p>\n\n\n\n
\u201cI\u2019ve already heard governors express that sentiment that this is not a threat, that this is actually an empowering element of the One Big Beautiful Bill,\u201d he said.<\/p>\n\n\n\n
Carrie Cochran-McClain, chief policy officer with the National Rural Health Association, said she\u2019s heard from a number of Democratic-led states that refused to include such restrictions on SNAP benefits even though it could hurt their chance to get more money from the fund.<\/p>\n\n\n\n
\u201cIt\u2019s not where their state leadership is,\u201d she said.<\/p>\n\n\n\n
Oz and other federal officials have touted the program as a 50% increase in Medicaid investments in rural health care. Rep. Don Bacon, a Republican from Nebraska who has been critical of many of the administration\u2019s policies but voted for the budget bill that slashed Medicaid, pointed to the fund when recently questioned about how the cuts would hurt rural hospitals.<\/p>\n\n\n\n
\u201cThat\u2019s why we added a $50 billion rural hospital fund, to help any hospital that\u2019s struggling,\u201d Bacon said. \u201cThis money is meant to keep hospitals afloat.\u201d<\/p>\n\n\n\n
But experts say it won\u2019t nearly offset the losses that struggling rural hospitals will face from the federal spending law\u2019s $1.2 trillion cut from the federal budget over the next decade, primarily from Medicaid. Millions of people are also expected to lose Medicaid benefits.<\/p>\n\n\n\n
Estimates suggest rural hospitals could lose around $137 billion over the next decade because of the budget measure. As many as 300 rural hospitals were at risk for closure because of the GOP\u2019s spending package, according to an analysis by The Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill.<\/p>\n\n\n\n
\u201cWhen you put that up against the $50 billion for the Rural Health Transformation Fund, you know \u2014 that math does not add up,\u201d Cochran-McClain said.<\/p>\n\n\n\n
She also said there\u2019s no guarantee that the funding will go to rural hospitals in need. For example, she noted, one state\u2019s application included a proposal for healthier, locally sourced school lunch options in rural areas.<\/p>\n\n\n\n
And even though innovation is a goal of the program, Cochran-McClain said it\u2019s tough for rural hospitals to innovate when they were struggling to break even before Congress\u2019 Medicaid cuts.<\/p>\n\n\n\n
\u201cWe talk to rural providers every day that say, \u2018I would really love to do x, y, z, but I\u2019m concerned about, you know, meeting payroll at the end of the month,\u2019\u201d she said. \u201cSo when you\u2019re in that kind of crisis mode, it is, I would argue, almost impossible to do true innovation.\u201d<\/p>\n\n\n\n