“It’s going to be the biggest infusion of federal dollars into rural health care in American history.”
Robert F. Kennedy Jr. on Sept. 4, 2025, in a Senate hearing
At a September Senate hearing, Health and Human Services Secretary Robert F. Kennedy Jr. boasted about a rural health initiative within President Donald Trump’s “One Big Beautiful Bill Act.”
“It’s going to be the biggest infusion of federal dollars into rural health care in American history,” Kennedy said, responding to criticism from Sen. Bernie Sanders (I-Vt.). Sanders said the law would harm patients and rural hospitals.
Kennedy was referring to the law’s five-year, $50 billion Rural Health Transformation Program, HHS spokesperson Emily Hilliard said. GOP lawmakers have made similar claims about the program.
The fund was added to the bill at the last minute to secure support from Republican lawmakers who represent rural states. Some were concerned about how the bill’s Medicaid cuts would harm rural America, where more than 150 hospitals have stopped offering inpatient services or been shuttered completely since 2010, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
“The transformation fund was really talked about in the context of saving rural hospitals that would be facing these significant Medicaid cuts,” said Carrie Cochran-McClain, chief policy officer at the National Rural Health Association. Medicaid is the joint state-federal health insurance program that primarily covers low-income people and those with disabilities.
So is Kennedy right in his description of the rural health fund as a historic cash infusion, or does it fail to acknowledge critical context?
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The Rural Health Transformation Program
Trump’s tax and spending law is expected to reduce federal Medicaid spending in rural areas by at least $137 billion by 2034, according to an analysis by KFF, a health information nonprofit that includes KFF Health News. The Congressional Budget Office predicts the law will increase the overall number of uninsured patients by 10 million by 2034.
Rural health facilities disproportionately rely on Medicaid reimbursement to stay afloat. In 2023, 40.6% of children and 18.3% of adults under age 65 from rural areas and small towns were enrolled in Medicaid, according to the Center for Children and Families at Georgetown University. In metro areas, the rates were 38.2% and 16.3%, respectively.
The Trump administration argues that rural hospitals cannot rely on “legacy” funding sources like Medicaid and Medicare due to the programs’ reimbursement structure, which ties payments to the number of services provided, a model that’s not financially sustainable for rural facilities with typically low patient volumes.
“Distinct from these other programs, the Rural Health Transformation Program is designed to provide a flexible source of investment” to promote innovation, efficiency, and sustainability, the White House wrote in a memo.
Here’s how it works. States can propose projects spearheaded by state agencies, health care providers, cons …