Key Points:

• Trump administration announces $50 billion Rural Health Transformation Fund for all 50 states

• Funds aim to stabilize rural hospitals and bolster health care workforce in rural communities

• States will submit regular updates to track progress and demonstrate results

The Trump administration on Monday announced that all 50 states will receive a portion of a new $50 billion Rural Health Transformation Fund, a one-time grant program billed by federal officials as the largest investment in rural health care in decades.

The awards are intended to help states stabilize rural hospitals, bolster the health care workforce and test new ways of coordinating care across rural communities, according to a Centers for Medicare & Medicaid Services press release. The funding will begin flowing in fiscal year 2026.

“This historic investment puts local hospitals, clinics, and health workers in control of their communities’ healthcare,” Health and Human Services Secretary Robert F. Kennedy Jr. said in a statement. “Thanks to President Trump’s leadership, rural Americans will now have affordable healthcare close to home, free from bureaucratic obstacles.”

Mississippi Gov. Tate Reeves, a Republican, called his state’s $205.9 million award for fiscal year 2026 “a big win for Mississippi,” saying his administration was ready to deploy the funds on behalf of the state’s more than 3 million residents.

Mississippi’s proposal outlines six initiatives focused on assessing rural health needs, coordinating regional care systems, expanding the workforce, modernizing health technology, scaling telehealth and strengthening rural health care infrastructure.

Congress created the Rural Health Transformation Program in the One Big Beautiful Bill, which Trump signed into law in July amid bipartisan concern over a wave of rural hospital closures and mounting financial pressure on safety-net providers.

Read more: States look to overhaul how rural health care is paid for

Under the law, half of the fund was to be distributed evenly among approved states, raising early questions about whether some states could be excluded for technical reasons, even though all 50 states submitted applications before a November deadline.

Those concerns were put to rest Monday. First-year awards average about $200 million per state, ranging from roughly $147 million for New Jersey to $281 million for Texas.

However, the Centers for Medicare & Medicaid Services did not disclose how much each state could receive in future years or release state-by-state application scores. The program includes an additional $10 billion per year from fiscal years 2026 through 2030.

“The below line detail is what is particularly interesting,” said Kody Kinsley, the former North Carolina secretary of Health and Human Services, who said he was interested in whether any portions of state applications were rejected and how the awards corresponded to a Centers for Medicare & Medicaid Services scoring process laid out in guidance the Trump administration issued in September.

Asked for more information, a spokesperson for the Centers for Medicare & Medicaid Services pointed to the press release, which said that applications were evaluated through a “rigorous merit review process” and that the agency’s September guidance ensured “a fair and consistent process across all 50 states.”

That guidance specified that 25% of the funding would be awarded based on rural population and hospital data. Another 7.5% — $3.75 billion — would be allocated based on states’ commitments to legislative and regulatory priorities backed by the Trump administration. Critics have argued that those criteria have little connection to rural health outcomes and could favor conservative-led states.

Some health policy advocates have also said the temporary funding falls far short of offsetting the estimated $911 billion in Medicaid cuts projected over the next decade under the law.

“These short-term funds fail to make up for the massive cuts to Medicaid, Marketplace and SNAP enacted elsewhere in the One Big Beautiful Bill Act, which are changes that are intended to permanently shift costs away from the federal government and onto states, providers and patients,” Geraldine Doetzer, an attorney for the National Health Law Program, said Monday.

North Carolina Gov. Josh Stein, a Democrat, echoed those concerns in a statement Monday, even as he welcomed the new funding. North Carolina has the nation’s second-largest rural population, after Texas, and will receive $213 million in fiscal year 2026.

In its application, North Carolina outlined a six-part strategy for using its $213 million award that includes launching locally governed care networks, called “NC ROOTS” hubs, to knit together medical, behavioral health and social services; expanding prevention and chronic disease programs; increasing access to mental health and substance use services; investing in workforce development; supporting rural providers’ transition to value-based care; and upgrading broadband and digital health technology.

The state is “eager to maximize” the award, the press release said, but faces “significant funding losses,” including nearly $50 billion in projected federal Medicaid cuts over the next decade.

“North Carolina has long been a leader in advancing rural health care solutions,” Stein said. “This grant will connect more people to more high-quality health care.”

Indiana Gov. Mike Braun, a Republican, said the state’s initial $207 million award was $7 million more than requested. The state’s five-prong initiative focuses on preventive care and chronic disease prevention; helping rural providers coordinate their operations through regional primary, specialty and emergency care systems; workforce retention and recruitment; promoting innovative care and payment models; and expanding the use of technology to improve care delivery and data sharing.

“Indiana’s rural communities are the backbone of our state, and this investment will help ensure that every Hoosier, regardless of where they live, has access to high-quality, sustainable healthcare,” Braun said in a statement.

Kinsley, the former North Carolina official, said states still have a lot of work ahead of them.

“As tough as it was for states and CMS to pull this together so quickly, now the rubber meets the road — finalizing budgets, contracting, building teams to execute the work, and most of all, testing if the transformational strategies in the plans actually work and work at the pace required,” he said. “All this while people are losing their coverage and hospitals are losing other supplemental payments. Which will only further complicate the process. States need to continue to be transparent, and CMS needs to continue to shine a bright light on their goals and what they’re holding the states accountable for.”

Now that the awards have been announced, the Centers for Medicare & Medicaid Services will convene program kickoff meetings in every state and provide ongoing guidance and technical assistance. States will be required to submit regular updates so the agency can track their progress, identify successful programs and ensure strong program oversight, according to the agency.

States will also convene annually at the agency’s Rural Health Summit to share their experiences. States that don’t demonstrate progress toward goals outlined in their application risk having their awards clawed back.