WASHINGTON, D.C. — In one of the largest investments ever aimed at rural health care, the federal government is sending money to every state under a $50 billion program designed to modernize hospitals, expand access to care, and stabilize the rural health workforce.
The Centers for Medicare & Medicaid Services announced that all 50 states will receive awards under the Rural Health Transformation Program, created by President Trump’s Working Families Tax Cuts legislation. The program will deliver $10 billion annually from 2026 through 2030, with first-year awards averaging about $200 million per state and ranging from roughly $147 million to $281 million.
Federal officials said the initiative is meant to reverse decades of strain on rural health systems as hospitals close, clinicians leave, and patients travel long distances for basic care. More than 60 million Americans live in rural areas.
Health and Human Services Secretary Robert F. Kennedy Jr. said the funding shifts control back to local communities, allowing rural hospitals, clinics, and health workers to shape care that fits their needs rather than navigating federal bureaucracy. CMS Administrator Dr. Mehmet Oz called the awards a turning point, saying states submitted ambitious plans to expand access, modernize care delivery, and strengthen rural communities that form the backbone of the country.
Under the program, states will pursue wide-ranging strategies tailored to local needs. Many plan to expand preventive, primary, maternal, and behavioral health services, while adding new access points to keep care closer to home. Several states are adopting evidence-based approaches such as fitness and nutrition initiatives, food-as-medicine programs, and chronic disease prevention models, alongside upgrades to rural emergency medical services.
Workforce shortages are another major focus. States will use the funding to support clinical training, residencies, recruitment incentives, and career pipelines that encourage health professionals to stay and work in their home communities. Investments will also target retention and professional support for existing staff.
Technology and infrastructure upgrades are central to the plans. States are preparing to modernize facilities and equipment, improve cybersecurity, expand telehealth and remote patient monitoring, and adopt digital tools to reduce administrative burdens on clinicians. Some proposals include advanced technologies such as AI-assisted documentation and workflow improvements.
The program also encourages structural reforms, including regional partnerships, hub-and-spoke care models, shared data platforms, and clinically integrated rural networks designed to keep services local while improving coordination. States are expected to test new care delivery and payment models, including value-based approaches that reward better outcomes rather than volume.
Funding is split evenly and competitively. Half of the money is distributed equally to all approved states, while the remaining half is allocated based on factors such as rural population, health system capacity, state policy actions, and the projected impact of proposed initiatives.
CMS said each state will be assigned a dedicated project officer and will provide regular progress updates. States will also gather annually at a national rural health summit beginning in 2026 to share results and accelerate innovation.
Officials said applications were evaluated through a merit-based review process involving federal and non-federal experts, with safeguards in place to prevent conflicts of interest.
As the program moves from planning to implementation, federal leaders are casting the investment as a long-term effort to rebuild rural health systems and ensure that geography no longer determines the quality of care Americans receive.
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