The Trump administration on Monday formally began distributing a $50 billion Rural Health Fund established by the One Big Beautiful Bill Act, opening a program officials say is intended to strengthen healthcare access in nonurban communities.
What States Will Receive
Beginning next year, states will start receiving payments from the Rural Health Transformation Program. Allocations are expected to average roughly $200 million per state, with individual awards estimated to range from about $145 million to $281 million.
How The Money Is Divided
Officials said half of the $50 billion will be distributed equally to all states. The remaining half will be allocated according to three factors: 50% based on a state's degree of rurality, 20% on state policy commitments, and 30% on the quality and feasibility of each state's improvement plan.
"Over the last roughly six weeks, there’s been an intense review of these applications, and it was based on three major criteria," said Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, at a Monday briefing.
Oz added the administration retains the authority to reclaim funds if a state fails to implement the policy actions tied to its funding commitments: "If the state says they’re going to do these things as part of their policy, and they don’t do that, then we do have the ability to claw back the financial commitment that would have accompanied those state policy actions."
Responses And Concerns
Critics of the broader tax-cut and spending package that created the fund have warned the legislation could reduce Medicaid funding for rural areas. Health policy nonprofit KFF estimated that Medicaid spending in rural communities could decline by about $137 billion over time as a result of changes in the bill.
Advocates for rural providers and policymakers emphasized the high dependence on Medicaid in rural America. The National Rural Health Association estimates that roughly 20% of adults and 40% of children in rural areas rely on Medicaid or the Children’s Health Insurance Program (CHIP).
"This historic investment puts local hospitals, clinics, and health workers in control of their communities’ healthcare. Thanks to President Trump’s leadership, rural Americans will now have affordable healthcare close to home, free from bureaucratic obstacles," said Health and Human Services Secretary Robert F. Kennedy Jr. in a statement.
The new fund is intended to support local hospitals, clinics, workforce development and other initiatives designed to improve rural access to care. State-by-state awards and plans for monitoring compliance with policy commitments are expected to be released as payments begin next year.
