Within the last days of 2025, governors across the nation trumpeted the lots of of thousands and thousands of federal {dollars} they gained from a brand new, $50 billion rural well being fund.
However plans to spend these nine-digit awards aren’t all warmly obtained.
At the least one group of Republican state lawmakers seems to have scuttled an initiative preapproved by federal officers. And no less than one hospital affiliation persuaded its state well being leaders to change who greenlights spending. Different critics are taking a extra cautious strategy.
That is as a result of the Facilities for Medicare & Medicaid Companies, which manages the five-year Rural Well being Transformation Program, says states might lose cash in the event that they make main adjustments to the plans accepted of their functions. Modifications might additionally delay states’ skill to get tasks rolling in time to indicate the company that they are assembly progress deadlines.
“Throughout the software interval, states had been suggested to solely suggest initiatives and state coverage actions that the state deemed possible,” stated CMS spokesperson Catherine Howden, who famous that the company will work with states case by case.
The current pushback displays “pressure” over state plans — which had been accepted by the federal authorities — from state lawmakers and well being leaders who need extra enter amid tight deadlines, stated Carrie Cochran-McClain, chief coverage officer of the Nationwide Rural Well being Affiliation, the biggest group representing rural hospitals and clinics.
Cochran-McClain stated many states should move a invoice to permit federal {dollars} to be spent and added that as a result of this system rolled out so rapidly “there’s essential work that also must be achieved in some states between the legislatures and the governors.”
State lawmakers need to have a say, she stated, in “how the funding is being allotted — how the implementation will go.”
Congressional Republicans created this system as a last-minute sweetener to incorporate of their One Large Lovely Invoice Act, signed into legislation final summer time. The funding was supposed to offset issues in regards to the outsize fallout anticipated in rural communities from the legislation, which is predicted to slash Medicaid spending by almost $1 trillion over a decade.
CMS officers introduced first-year funding — starting from $147 million for New Jersey to $281 million for Texas — on Dec. 29, after scoring functions. Federal officers will start evaluating progress in late summer time and announce 2027 allocations on the finish of October.
A refrain of critics say this system will not make up for hurt attributable to Medicaid cuts.
This system is “an entire sham,” Sen. Ron Wyden (D-Ore.) stated at a rural coverage convention in February.
Medicaid, a joint federal-state program for low-income and disabled Individuals, serves almost 1 in 4 rural residents, and plenty of rural hospitals rely on it to remain afloat.
However the rural well being program tilts towards seeding modern tasks and applied sciences, not shoring up rural hospital funds. States can use solely as much as 15% of their funding to pay suppliers for affected person care.
That hasn’t stopped some federal officers and lawmakers from framing this system as a rural hospital rescue.
For instance, the White Home web site says, “President Trump secured $50 billion in funding for rural hospitals.”
Now that functions have been accepted, some state Republican lawmakers — who’re extra prone to signify rural voters than Democrats are — and hospital associations are upset that the political rhetoric does not match what they see.
They’re additionally lobbing criticisms at particular facets of their states’ plans, together with the proposed tasks, what’s not included, and the spending approval course of.
In Wyoming, lawmakers did not simply criticize an initiative from their state’s software. They moved to kill it.
State Rep. John Bear, a Republican, stated he and different lawmakers declined to fund “BearCare,” a proposed state-sponsored medical insurance plan that sufferers might use solely after medical emergencies. However they did approve different facets of the agricultural well being program.
The Wyoming Division of Well being will not “proceed with BearCare with out specific legislative authority to take action,” stated spokesperson Lindsay Mills.
Whereas Wyoming lawmakers eliminated an initiative from their state’s rural well being plan, a bunch in Ohio needs so as to add one thing.
Ohio Rep. Kellie Deeter and different Republican lawmakers requested their governor to make use of the utmost allowed funding for supplier funds — 15% — to assist 13 unbiased, rural hospitals.
“We perceive that the agricultural transformation fund is just not designed to be given on to prop up hospitals,” Deeter stated. “We simply need to capitalize on the mechanism of the fund that may be utilized for that objective.”
These hospitals “function with very, very slender margins, and it is simply tough and, frankly, unsustainable,” she added.
Ken Gordon, a press secretary responding for the governor’s workplace and the state well being division, stated, “It is nonetheless very early on this course of, and plenty of particulars are being labored out.”
State lawmakers across the nation are additionally making an attempt to make sure the federal program’s {dollars} profit rural areas.
In North Dakota, Rep. Invoice Tveit, a Republican who lives in a city with about 2,000 residents, launched a invoice that will have required the state to order its funding for packages situated greater than 35 miles from city areas and small cities.
Throughout a listening to, lawmakers appeared sympathetic to Tveit’s issues however rapidly shot down his thought.
State Sen. Brad Bekkedahl stated the North Dakota well being division already dedicated to prioritizing funding for essentially the most urgent rural well being wants. He additionally stated he is involved any important adjustments might trigger the state to lose funding as a result of CMS already reviewed and accepted the plan.
In the meantime, Republican lawmakers in Michigan and North Carolina have criticized their state’s definitions of “partially rural” or “rural,” saying that counties that embrace city inhabitants facilities might take cash from lower-density counties, in keeping with Michigan Advance and North Carolina Well being Information.
Lawmakers aren’t the one ones talking out.
The Colorado Hospital Affiliation wrote a letter to state lawmakers denouncing how the state created its plan and two of its proposed initiatives.
“Not solely had been Colorado’s rural hospitals’ suggestions disregarded,” president and CEO Jeff Tieman wrote, however the plan consists of concepts “they actively oppose and imagine will hurt the communities they serve.”
The division responded to one of many affiliation’s issues by including rural well being leaders to the funding approval committee.
In the meantime, in Michigan and Nebraska, some well being teams are upset that their states’ plans lack particular funding streams for rural hospitals.
Lauren LaPine-Ray, who oversees rural well being coverage on the Michigan Well being & Hospital Affiliation, predicted the state’s rural hospitals will compete with different organizations, akin to educational facilities and well being clinics, for funding. She stated about 65% of the group’s rural members have by no means utilized for a state grant earlier than.
“The agricultural hospitals, those that actually want the funding essentially the most, is not going to be nicely outfitted to use for and pull down these {dollars},” LaPine-Ray stated.
Jed Hansen, govt director of the Nebraska Rural Well being Affiliation, stated the federal funding will not go to “rural hospitals, rural clinics, and rural suppliers in a significant manner.”
“Rural Well being Transformation is not going to save a single hospital in our state,” he stated. “I do not assume it’s going to save a hospital nationally.”
KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is without doubt one of the core working packages at KFF — the unbiased supply for well being coverage analysis, polling, and journalism.
