Arielle Zionts
“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 listening to
At a September Senate listening to, Health and Human Services Secretary Robert F. Kennedy Jr. boasted a couple of rural well being initiative inside 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 stated the legislation would hurt sufferers and rural hospitals.
Kennedy was referring to the legislation’s five-year, $50 billion Rural Health Transformation Program, HHS spokesperson Emily Hilliard stated. GOP lawmakers have made related claims about this system.
The fund was added to the invoice on the final minute to safe help from Republican lawmakers who characterize rural states. Some had been involved about how the invoice’s Medicaid cuts would hurt rural America, the place more than 150 hospitals have stopped providing inpatient companies or been shuttered utterly since 2010, in line with the Cecil G. Sheps Center for Health Services Research on 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,” stated Carrie Cochran-McClain, chief coverage officer on the National Rural Health Association. Medicaid is the joint state-federal medical health insurance program that primarily covers low-income individuals and people with disabilities.
So is Kennedy proper in his description of the agricultural well being fund as a historic money infusion, or does it fail to acknowledge vital context?
The Rural Health Transformation Program
Trump’s tax and spending legislation is anticipated to cut back federal Medicaid spending in rural areas by at the least $137 billion by 2034, in line with an analysis by KFF, a well being data nonprofit that features KFF Health News. The Congressional Budget Office predicts the legislation will improve the general variety of uninsured sufferers by 10 million by 2034.
Rural well being amenities disproportionately depend on Medicaid reimbursement to remain afloat. In 2023, 40.6% of kids and 18.3% of adults below age 65 from rural areas and small cities were enrolled in Medicaid, in line with the Center for Children and Families at Georgetown University. In metro areas, the charges had been 38.2% and 16.3%, respectively.
The Trump administration argues that rural hospitals can not depend on “legacy” funding sources like Medicaid and Medicare as a result of packages’ reimbursement construction, which ties funds to the variety of companies supplied, a mannequin that’s not financially sustainable for rural amenities with sometimes low affected person volumes.
“Distinct from these other programs, the Rural Health Transformation Program is designed to provide a flexible source of investment” to advertise innovation, effectivity, and sustainability, the White House wrote in a memo.
Here’s the way it works. States can suggest initiatives spearheaded by state companies, well being care suppliers, consultants, and distributors geared toward varied functions, similar to bettering expertise, entry to care, and workforce recruitment.
States can use solely 15% of their transformation program funding for supplier funds and may direct cash to non-rural areas, according to KFF.
Half of the $50 billion can be evenly divided amongst states whose purposes are authorised — no matter their rural and total populations — in line with the “Notice of Funding Opportunity” for this system.
The different half can be awarded based mostly on “the transformative possibilities” of states’ grant proposals; how a lot they’ve dedicated to aligning their well being insurance policies with the Trump administration’s; and knowledge on their rural inhabitants, rural well being amenities, uncompensated care, and different measurements.
The software deadline is Nov. 5.
The Big Picture
Michael Meit, director of the Center for Rural Health and Research at East Tennessee State University, stated the agricultural well being group is worked up in regards to the improvements the brand new program would possibly foster, however he’d “love for it to happen in the absence of these cuts that are going to devastate our rural health system.”
“It’s not going to fill the hole,” Meit stated.
KFF estimates that the agricultural well being fund’s five-year, $50 billion funding is somewhat over a third of the expected loss of federal funding in rural areas that can be unfold over 10 years. According to that evaluation, Medicaid cuts over that interval would tally at the least $137 billion in rural areas.
That quantity doesn’t account for different reductions stemming from the identical legislation, similar to cuts to the ACA Marketplaces or the well being system income loss anticipated from a rise within the variety of individuals with out insurance coverage.
These components are essential to notice as a result of the agricultural well being program is a short lived initiative, whereas reductions in federal spending are long-term.
Another challenge is the distinction in this system’s spirit. The rural well being fund is targeted on remodeling the agricultural well being care system — not offering continued funding to maintain amenities open or making up for misplaced Medicaid funds. Even if the cash triggers profitable improvements, there are doubts that these will occur in time to forestall rural well being amenities from closing.
“There’s a real misperception that somehow these funds are going to be able to save rural America or save rural hospitals,” Cochran-McClain stated.
Joseph Antos, a well being coverage professional and senior fellow emeritus on the conservative-leaning American Enterprise Institute, stated Kennedy’s remark is one thing “politicians say when they want to ignore the rest of the policies.”
“What they wanted was to say that they were creating a new program,” Antos stated. “Well, this is a very inefficient way to distribute a relatively very small amount of money to hospitals that will incur much larger bad debt over the coming years, thanks to the cuts in Medicaid.”
One Caveat
Experts stated that when seen exterior of obligatory packages like Medicare and Medicaid, the $50 billion rural well being fund does look like unmatched, particularly for a restricted, five-year program.
Several talked about the Hill-Burton Act as one other program that considerably boosted rural well being care. The legislation supplied loans and grants that modernized or built 6,800 health facilities, a lot of which had been in rural areas, from 1946 to 1997, in line with the Health Resources and Services Administration.
Incomplete funding knowledge makes it troublesome to account for inflation, stated Kelsey Moran, an assistant professor and well being economist on the University of Miami.
But she estimated that, through the lifetime of this system, it spent $47 billion in 2024 {dollars} when utilizing the Consumer Price Index, or $109 billion when utilizing the CPI’s medical care index. The medical index has the next inflation fee as a result of well being costs have risen greater than total costs.
Our Ruling
Kennedy stated the agricultural well being fund is “going to be the biggest infusion of federal dollars into rural health care in American history.”
The assertion accommodates a component of reality as a result of the brand new program may very well be probably the most vital one-time funding in rural well being funding.
But it ignores vital information and context that create a distinct impression.
Federal contributions to rural areas from Medicaid and Medicare simply dwarf this program’s $50 billion mark. The new fund affords states flexibility in how they will allocate assets, that means there’s no assure that each one the brand new funding will go to rural Americans’ well being care. The program comes on the similar time rural areas are anticipated to lose much more from Medicaid cuts and a rise in uninsured sufferers than what the agricultural well being fund infusion can backfill.
Experts say the agricultural well being fund’s money infusion is canceled out by different components of Trump’s tax and spending legislation that decision for cuts and coverage modifications.
We fee this assertion Mostly False.
Our Sources
“Watch: Sanders, RFK Jr. Get Into Testy Exchange Over COVID Vaccine, CDC Director’s Firing,” CBS News, Sept. 4, 2025.
“$50B Rural Health ‘Slush Fund’ Faces Questions, Skepticism,” KFF Health News, July 21, 2025.
“Rural Hospital Closures,” Cecil G. Sheps Center for Health Services Research on the University of North Carolina-Chapel Hill, accessed Sept. 15, 2025.
“Senate GOP Mulls Shielding Rural Hospitals From Medicaid Cuts,” Roll Call, June 20, 2025.
“Key Takeaways From CMS’s Rural Health Funding Announcement,” KFF, Sept. 23, 2025.
“Estimated Budgetary Effects of Public Law 119-21, To Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, Relative to CBO’s January 2025 Baseline,” Congressional Budget Office, July 21, 2025.
“Medicaid’s Role in Small Towns and Rural Areas,” Georgetown University Center for Children and Families, Jan. 15, 2025.
“MEMORANDUM Re: The One Big Beautiful Bill is a Historic Investment in Rural Healthcare,” The White House, undated.
Notice of Funding Opportunity for the Rural Health Transformation Program, authorities doc printed on Sept. 15, 2025.
“The Federal Budget in Fiscal Year 2023: An Infographic,” Congressional Budget Office, March 5, 2024.
“The Federal Budget in Fiscal Year 2024: An Infographic,” Congressional Budget Office, March 20, 2025.
“Hill-Burton Facilities Compliance,” HRSA, accessed Sept. 16, 2025.
“Hospital Charity Care & The Hill-Burton Act,” working paper by Kelsey Moran up to date on Sept. 15, 2025.
Phone interview with Matthew Fiedler, a senior fellow in financial research on the Center on Health Policy at The Brookings Institution, Sept. 24, 2025.
Phone interview with Gbenga Ajilore, chief economist, and Allison Orris, director of Medicaid coverage on the Center on Budget and Policy Priorities, Sept. 24, 2025.
Phone interview with Larry Levitt, government vice chairman for well being coverage at KFF, Sept. 24, 2025.
Phone interview with Joseph Antos, a well being coverage professional and senior fellow emeritus on the American Enterprise Institute, Sept. 23, 2025.
Phone interview with Carrie Cochran-McClain, chief coverage officer on the National Rural Health Association, Sept. 17, 2025.
Phone interview with Kelsey Moran, assistant professor within the Department of Health Management and Policy on the University of Miami, Sept. 15, 2025.
Phone interview with Alana Knudson, director of the NORC Walsh Center for Rural Health Analysis on the University of Chicago, Sept. 12, 2025.
Phone interview with Michael Meit, director of the Center for Rural Health and Research at East Tennessee State University, Sept. 11, 2025.
