Trump administration rolls out rural health funding, but with strings attached

The funding formula ties $12 billion to whether states are implementing policies prioritized by the administration’s “Make America Healthy Again” initiative.

States will share $10 billion for rural health care next year in a program that aims to offset the Trump administration’s massive budget cuts to rural hospitals, federal officials announced Monday.

But while every state applied for money from the Rural Health Transformation Program, it won’t be distributed equally. And critics worry that the funding might be pulled back if a state’s policies don’t match up with the administration’s.

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.

“This 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,” Oz said in a call with reporters Monday.

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’s medical facilities and health outcomes for a state’s population.