Imagine starting the new year with the promise of at least a $147 million payout from the federal government.
But there are strings attached.
In late December, President Donald Trump’s administration announced how much all 50 states would get under its new Rural Health Transformation Program, assigning them to use the money to fix systemic problems that leave rural Americans without access to good health care. Now, the clock is ticking.
Within eight months, states must submit revised budgets, begin spending, and show the money is going to good use. Federal officials will begin reviewing state progress in late summer and announce 2027 funding levels by the end of October.
The money — divided into unique allocations for each state, ranging from $147 million for New Jersey to $281 million for Texas — represents the first $10 billion installment from the five-year, $50 billion program. Congress created the fund as a last-minute sweetener in Trump’s One Big Beautiful Bill Act last summer to offset the outsize fallout anticipated in rural communities from the statute’s nearly $1 trillion in Medicaid spending cuts over the next decade.
Federal officials crafted the fund to give states “space to be creative,” Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, said on a call with reporters after announcing the funding Dec. 29. “Some states will fail, and we will learn from that.”
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