Trump Administration's Rural Healthcare Investments

The Trump administration has rolled out a new $50 billion fund to subsidize rural healthcare in America. $10 billion will be divided among the states per year, for five years. This is partially to help offset the administration’s budget cuts to rural hospitals after the Republican–led Congress slashed Medicaid funding. The plan has faced criticism as some of the funding is tied to the state’s willingness to adopt Trump’s health policies, with further threats to clawback funding if states do not implement the administration’s policies in the future. Despite this fund, experts say it will not replace the toll taken by Medicaid’s funding being decreased, and could put rural healthcare into a deeper financial hole.

Rural healthcare access in America has suffered for years. Hospitals are few and far between, forcing many to drive hours just to see a doctor. Federal and state underfunding has exacerbated the problem, leading to closures: and the issue is compounded by brain drain, as doctors flee rural areas in favor of higher-paying jobs in urban areas. The issue is only compounded by new laws that restrict physicians’ ability to perform abortions—pushing many out of rural conservative areas as they fear legal retribution for providing care.

Trump’s second term has seen healthcare funding become a critical battleground for both Democrats and Republicans. Trump’s budget bill, referred to colloquially as the “One Big Beautiful Bill,” cut over $1 trillion in American healthcare programs. It has had a disproportionate effect on healthcare in rural areas due to a generally lower local and state tax revenue. The investment is, in part, an attempt to mitigate the side effects of these cuts, but experts say that even with the administration’s $100 billion healthcare investment rural hospitals are projected to lose around $137 billion within the next decade, leaving as many as 300 hospitals at risk of closure.

Half of the funding will be equally distributed between the states over a period of five years, while the remaining half will be distributed based on a formula developed by CMS (Centers for Medicare and Medicaid Services), taking into account three factors: rural population size, the financial health of a state’s medical facilities and health outcomes for a state’s population. Another $12 billion is set to be given to states that comply with the administration’s health policies, which include requiring nutrition education for health care providers, having schools participate in the Presidential Fitness Test or banning the use of SNAP benefits for so-called junk foods. This funding would also likely be contingent on these hospitals discontinuing coverage of gender affirming care for minors.

Dr. Mehmet Oz, Administrator of CMS, said that the funding would be recalculated annually, allowing the federal government to “claw back” funds if policies states promised to pass do not come to fruition. The administration maintains that the threat of clawbacks is not a punishment, but rather leverage for governors to use to persuade state congresses to pass laws that are aligned with the administration’s policies.

Multiple Democratic states have refused to implement the administration’s policies despite the possibility that it may lead to them losing out on more money from the fund. In this way, the fund has politicized access to essential healthcare for countless rural Americans, giving greater aid to states that toe the line of the administration’s politics while putting dissenting state leadership in a position that forces them to either jeopardize their state power or the lives and health of their constituents.

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• Margery A. Beck and Susan Haigh, AP

• Zachary Levinson and Tricia Neuman, KFF