“This will be the largest commitment of federal funding to rural health care in U.S. history.”
Robert F. Kennedy Jr. at a Senate hearing on September 4, 2025.
At a Senate hearing in September, Health and Human Services Secretary Robert F. Kennedy Jr. boasted about President Donald Trump’s “rural health initiative.”one big beautiful bill bill.”
“This will be the largest commitment of federal funding to rural health care in U.S. history.” Kennedy said: Response to criticism from Sen. Bernie Sanders (I-Vt.). Sanders said the law would harm patients and rural hospitals.
President Kennedy cited the law’s five-year, $50 billion rural health innovation program, said HHS spokeswoman Emily Hilliard. Republican lawmakers have made similar claims about the program.
The funds were added to the bill at the last minute to secure support from Republican lawmakers representing rural states. Some raised concerns about how the bill’s Medicaid cuts would harm rural America. 150+ hospitals They have stopped providing inpatient services or closed entirely since 2010, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
“In the context of trying to save rural hospitals that are going to face these significant Medicaid cuts, I think the Innovation Fund is really going to work,” said Carrie Cochran-McClain, chief policy officer at the National Rural Health Association. “It has been discussed,” he said. Medicaid is a joint state-federal health insurance program that primarily serves low-income and disabled people.
So was Kennedy right to describe the Rural Health Fund as a historic cash injection, or did he fail to recognize important context?
Rural Health Innovation Program
Trump’s tax and spending law is expected to reduce federal Medicaid spending in rural areas by at least $137 billion by 2034. Analysis by KFFKFF is a health information nonprofit that includes Health News. that Congressional Budget Office forecast This law will increase the overall number of uninsured patients by 10 million by 2034.
Rural health care facilities disproportionately rely on Medicaid reimbursements for sustenance. By 2023, 40.6% of children and 18.3% of adults under the age of 65 will come from rural areas and small cities. Was enrolled in MedicaidAccording to Georgetown University’s Center on Children and Families. In the metropolitan area, they recorded 38.2% and 16.3%, respectively.
The Trump administration argues that the program’s reimbursement structure, which ties payments to the number of services provided, prevents rural hospitals from relying on “traditional” funding sources like Medicaid or Medicare. This model is generally not financially sustainable for rural facilities with low patient volumes.
“Unlike other programs, the Rural Health Innovation Program is designed to provide a flexible source of investment,” the White House said, designed to promote innovation, efficiency and sustainability. wrote in the note.
Here’s how it works: States can propose projects led by state agencies, health care providers, consultants, and vendors aimed at a variety of purposes, including improving technology, access to care, and workforce recruitment.
States can only use 15% of their innovation program funds to pay providers and send money to non-rural areas. According to KFF.
Half of the $50 billion would be distributed equally to states with approved applications, regardless of rurality and overall population.Funding Opportunity Notice” About the program.
The other half is awarded based on the “transformability” of the state grant proposal. how hard they worked to align their health policies with those of the Trump administration; Data on rural population, rural health facilities, uncompensated care, and other measures.
The application deadline is November 5.
big picture
Michael Meit, director of the Center for Rural Health and Research at East Tennessee State University, said the rural health community is excited about the innovations the new program could foster, but “I hope these innovations happen without these cuts that would devastate our rural health systems.”
“It won’t fill the hole.” Meit said.
KFF estimates that the Rural Health Fund will invest just over $50 billion over five years. One-third of expected losses Federal funding for rural areas is spread out over 10 years. The analysis found that Medicaid cuts over that period would amount to at least $137 billion in rural areas.
This figure does not take into account other reductions resulting from the same law, such as ACA market cuts or the loss of health system revenue expected from a rise in the number of uninsured people.
These factors are important to note because the rural health program is a temporary initiative, whereas the reduction in federal spending is long-term.
Another problem is the difference in program spirit. The Rural Health Fund is focused on transforming rural health care systems. It does not provide ongoing funding to keep facilities operating or replenish lost Medicaid funds. Even if the funding sparks successful innovation, there are doubts that it will happen in time to prevent rural health facilities from closing.
“There’s a misperception that somehow these funds will save rural America or save rural hospitals,” Cochran-McClain said.
Joseph Antos, a health policy expert and fellow emeritus at the conservative American Enterprise Institute, said Kennedy’s comments “are what politicians say when they want to ignore the rest of their policies.”
“What they wanted to do was say they were creating a new program,” Antos said. “Well, this is a very inefficient way to distribute relatively very small amounts of money to hospitals that will have much larger bad debts in the coming years due to Medicaid cuts.”
One caveat
Excluding essential programs like Medicare and Medicaid, the $50 billion rural health fund appears unmatched, especially for limited five-year programs, experts said.
Several people have mentioned the Hill-Burton Act as another program that significantly improved rural health care. The law provided for the following loans and grants: 6,800 health facilities were modernized or built.From 1946 to 1997, many of them were in rural areas, according to the Health Resources and Services Administration.
Kelsey Moran, an assistant professor and health economist at the University of Miami, said incomplete funding data makes it difficult to explain inflation.
but she estimated Over the life of the program, spending was $47 billion in 2024 dollars using the Consumer Price Index and $109 billion using the CPI health care index. The inflation rate of the medical index is higher because medical prices have risen more than the overall inflation rate.
our verdict
Kennedy said the Rural Health Fund “will be the largest commitment of federal funding to rural health care in American history.”
This statement contains an element of truth because the new program could be the most significant one-time investment in rural health funding.
However, it ignores important facts and context that give a different impression.
Federal contributions to rural areas through Medicaid and Medicare easily dwarf the $50 billion in these programs. The new funds provide flexibility in how states allocate resources. That means there’s no guarantee that all the new funding will go to health care in rural America. At the same time, the program is expected to lose significantly more than it can cover with infusions of rural health funds due to Medicaid cuts and an increase in uninsured patients in rural areas.
Experts say cuts and other parts of Trump’s tax and spending law that require policy changes have canceled out the rural health fund’s cash infusion.
We rate this statement as Mostly False.
our source
“WATCH: Sanders fires RFK Jr., CDC director, enters heated exchange over COVID vaccine,” CBS News, September 4, 2025.
“$50 billion rural health ‘slush fund’ faces questions and skepticism,” KFF Health News, July 21, 2025.
“rural hospitals closed,” Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill, accessed September 15, 2025.
“Senate GOP seeks to protect rural hospitals from Medicaid cuts,” Roll Call, June 20, 2025.
“Highlights from CMS’ Rural Health Funding Announcement“KFF, September 23, 2025.
“Estimated Budgetary Effects of Public Law 119-21 to Provide for Settlement Under Title II of H. Con. resolution. 14, compared 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, January 15, 2025.
“Memorandum Re: One Big, Beautiful Bill Is a Historic Investment in Rural Health Care.,” White House, date unknown.
Notice of Funding Opportunities for Rural Health Innovation ProgramGovernment document published on September 15, 2025.
“Fiscal Year 2023 Federal Budget: Infographic,” Congressional Budget Office, March 5, 2024.
“Fiscal Year 2024 Federal Budget: Infographic,” Congressional Budget Office, March 20, 2025.
“Hill-Burton Facility Compliance,” HRSA, accessed September 16, 2025.
“Hospital Charity Care and the Hill-Burton Act,” Kelsey Moran’s working paper updated September 15, 2025.
Telephone interview with Matthew Fiedler, senior fellow in economic studies at the Brookings Institution’s Center for Health Policy, September 24, 2025.
September 24, 2025, telephone interview with Gbenga Ajilore, Chief Economist, and Allison Orris, Director of Medicaid Policy, Center on Budget and Policy Priorities.
Telephone interview with Larry Levitt, KFF Vice President of Health Policy, September 24, 2025.
Telephone interview with Joseph Antos, health policy expert and senior fellow emeritus at the American Enterprise Institute, September 23, 2025.
Telephone interview with Carrie Cochran-McClain, Chief Policy Officer, National Rural Health Association, September 17, 2025.
Telephone interview with Kelsey Moran, Assistant Professor, Department of Health Management and Policy, University of Miami, September 15, 2025.
Telephone interview with Alana Knudson, Director, NORC Walsh Center for Rural Health Analysis, University of Chicago, September 12, 2025.
Telephone interview with Michael Meit, Director of the Center for Rural Health and Research, East Tennessee State University, September 11, 2025.
