President Donald Trump seems to be giving rural healthcare some serious support. The Trump administration on Monday doled out billions to states from a fund Congress created to “transform” rural healthcare.
“The purpose of this $50 billion investment in rural health care is not to pay off the bills,” Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services, told reporters Monday. “The purpose of this $50 billion investment is to allow us to rightsize the system and to deal with the fundamental hindrances of improvement in rural health care.”
The funds, however, will be lavished more generously on small states and states that adopt administration friendly policies.
The funding comes from the Rural Health Transformation Program, authorized as part of a major Republican legislative package enacted earlier this year. The law allocates $50 billion over five years, with roughly $10 billion designated for fiscal year 2026. Administration officials say the money is intended to stabilize rural hospitals, expand access to care, and modernize health infrastructure in underserved areas.
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All 50 states are receiving funding, with initial allocations averaging about $200 million, though amounts vary based on population and health system needs. CMS divided the funds so that half are distributed equally among states, while the remaining half is allocated based on rural population size, existing infrastructure, and state transformation plans. States were required to submit proposals outlining how they would use the money, though it is not yet clear how outcomes will be measured or enforced over time.
The rollout has sparked debate among lawmakers and health policy experts. Critics argue the funding may not fully offset Medicaid reductions and other health care cuts included elsewhere in the same legislation, particularly for states with large rural populations. Others warn that future funding adjustments could be influenced by whether states adopt policies favored by the administration, a claim administration officials deny.
While the funding provides an immediate infusion of federal dollars into rural health systems, its long-term effectiveness in reversing hospital closures and improving health outcomes remains to be seen, especially as rural providers continue to face workforce shortages and rising operating costs.
“It was a fast timeline for states to apply. It’s a fast timeline for CMS to get the money out the door. And it’s a fast timeline to spend the money,” Carrie Cochran-McClain, the chief policy officer for the National Rural Health Association, said at a December POLITICO event.
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Robyn Preacher, the head of state government relations for the American Nurses Association, praised the Trump administration for pushing states to expand what services their members can provide, but cautioned that few may be able to do so within the program’s strict timeline.
“Texas has been trying for years and years to get full practice authority, and they’re also a state that’s only in session every other year, so they can’t even bring it up next year. And North Carolina has had pending legislation for over a decade,” she said. “This is one of those situations where asking for changes so quickly kind of put some states at a disadvantage.”
The program’s success will depend not just on the size of the investment, but on states’ capacity to implement reforms, collaborate with providers, and sustain improvements once the federal dollars are spent. How well those pieces come together may determine whether the initiative delivers lasting improvements to rural health care beyond the initial infusion of funds.