US allots at least $147 million per state for rural health in 2026

By Andrea Shalal and Sriparna Roy

Dec 29 (Reuters) – The Trump administration will award each U.S. state between $147 million and $281 million in 2026 under a new rural health transformation program aimed at improving access to care and service quality, a senior White House aide said on Monday.

The initiative, authorized under the One Big Beautiful Bill Act, will provide $50 billion over five fiscal years. It will make $10 billion available each year from fiscal 2026 through fiscal 2030 for all 50 states.

Centers for Medicare & Medicaid Services Administrator Mehmet Oz said the fund is intended to improve rural health outcomes that have worsened over decades, while avoiding costly new construction.

“This is a massive effort to change the unfortunate reality that has overtaken rural healthcare in America, which is that your ZIP code has started to predict your life expectancy,” Oz told reporters. He said the money will also support other pilot projects across the country.

Officials said they will allocate half the funding equally among states, with the remaining $25 billion distributed based on factors tied to rural health systems, state policy actions, and initiatives states propose in their applications.

Administration officials also said they will recoup funds if states fail to meet certain criteria or do not carry out pledged actions.

“The purpose of this $50 billion investment in rural healthcare is not to pay off bills,” Oz said. “The purpose of this $50 billion investment is to allow us to right-size the system and to deal with the fundamental hindrances of improvement in rural healthcare.”

The rollout comes as President Donald Trump faces weak approval ratings, with inflation and cost-of-living concerns dominating voters’ minds ahead of next year’s congressional elections.

Trump performed strongly with rural voters, who made up about 36% of his voters in the 2024 presidential election, compared with 16% for his Democratic rival Kamala Harris, according to the Pew Research Center.

Moderate Republicans, who are pivotal to maintaining the party’s razor-thin majority in Congress, face added pressure as the House has not extended enhanced Affordable Care Act premium subsidies, leaving many marketplace enrollees projected to see higher premiums starting January 1.

(Reporting by Sriparna Roy in Bengaluru and Andrea Shalal in Florida; Editing by Tasim Zahid)