“This will be the largest infusion of federal dollars into rural health care in American history.”
Robert F. Kennedy, Jr., September 4, 2025, at a Senate hearing.
At a Senate hearing in September, Secretary of Health and Human Services Robert F. Kennedy Jr. boasted of President Donald Trump's rural health initiative:One big beautiful bill law“
“This will be the largest infusion of federal dollars into rural health care in American history.” Kennedy said: responding to criticism from Sen. Bernie Sanders (I-Vt.). Sanders said the legislation would harm patients and rural hospitals.
Kennedy was referring to the law's five-year, $50 billion deadline. Rural Health Transformation ProgramHHS spokeswoman Emily Hilliard said. GOP lawmakers have made similar statements about the program.
The fund was added to the bill at the last minute to win support from Republican lawmakers representing rural states. Some were concerned about how Medicaid cuts would hurt rural America, where more than 150 hospitals have stopped offering inpatient services or have been closed entirely since 2010, according to the Cecil G. Scheps Center for Health Services Research at the University of North Carolina.
“The transformation fund was really talked about in the context of bailing out rural hospitals that would face these big Medicaid cuts,” said Carrie Cochran-McClain, chief policy officer for the National Rural Health Association. Medicaid is a joint state and federal health insurance program that primarily covers low-income people and people with disabilities.
So is Kennedy right in his description of the rural health fund as a historic infusion of money, or is he missing critical context?
Rural Health Transformation Program
Trump's tax and spending bill is expected to cut federal Medicaid spending in rural areas by at least $137 billion by 2034, according to KFF analysisa nonprofit health information organization that includes KFF Health News. The Congressional Budget Office predicts The law would increase the total number of uninsured patients by 10 million by 2034.
Rural health care providers disproportionately rely on Medicaid reimbursement to stay afloat. In 2023, 40.6% of children and 18.3% of adults under 65 years of age are from rural areas and small towns were enrolled in MedicaidThis was reported by the Center for Children and Families at Georgetown University. In agglomerations these figures were 38.2% and 16.3%, respectively.
The Trump administration argues that rural hospitals cannot rely on “legacy” funding sources such as Medicaid and Medicare because of the programs' reimbursement structure, which ties payments to the number of services provided, a model that is not financially sustainable for rural facilities with typically low patient volumes.
“Unlike other programs, the Rural Health Transformation Program is designed to provide a flexible source of investment” to promote innovation, efficiency and sustainability, the White House said. wrote in a note.
Here's how it works. States can propose projects led by government agencies, health care providers, consultants, and vendors aimed at various goals such as improving technology, access to health care, and workforce recruitment.
States can use only 15% of their transformation program funding to pay service providers and can direct the money to nonrural areas. according to KFF data.
Half of the $50 billion would be divided equally among states whose applications are approved, regardless of their rural population or total population.Notice of Funding Opportunity” for the program.
The other half will be awarded based on the “transformational capacity” of state grant proposals; how committed they are to aligning their health care policies with those of the Trump administration; as well as data on their rural population, rural health care facilities, uncompensated care, and other indicators.
The application deadline is November 5th.
The big picture
Michael Mate, director of the Center for Rural Health and Research at East Tennessee State University, said the rural health care community is excited about the innovation the new program could foster, but he “would like to see it happen in the absence of these cuts that would devastate our rural health care system.”
“It’s not going to fill the hole,” Mate said.
KFF estimates the rural health fund's five-year investment of $50 billion is slightly more one third of the expected loss federal funding for rural areas, which will be extended over 10 years. According to this analysis, Medicaid cuts over this period would amount to at least $137 billion in rural areas.
This number does not account for other cuts stemming from the same law, such as cuts to ACA marketplaces or the loss of health care system revenue expected from an increase in the number of people without insurance.
These factors are important to note because the rural health program is a temporary initiative and federal spending cuts are long-term.
Another issue is the difference in the spirit of the program. The Rural Health Fund is focused on transforming the rural health care system rather than providing ongoing funding to keep facilities running or replacing lost Medicaid funds. Even if this money leads to successful innovation, there are doubts that it will happen in time to prevent the closure of rural health facilities.
“There is a misconception that somehow these funds will save rural America or rural hospitals,” Cochran-McClain said.
Joseph Antos, a health policy expert and senior fellow at the conservative-leaning American Enterprise Institute, said Kennedy's comment is what “politicians say when they want to ignore the rest of politics.”
“They wanted to say they were creating a new program,” Antos said. “Well, it's a very inefficient way to distribute a relatively small amount of money to hospitals that will face much larger bad debts in the coming years due to Medicaid cuts.”
One word of caution
Experts said that when looked at outside of mandatory programs like Medicare and Medicaid, the $50 billion rural health fund does appear unbeatable, especially for a limited five-year program.
Some mentioned the Hill-Burton Act as another program that greatly improved rural health care. The law provided for loans and grants that 6,800 medical institutions were modernized or builtmany of which were in rural areas, from 1946 to 1997, according to the Health Resources and Services Administration.
Incomplete funding data makes it difficult to account for inflation, said Kelsey Moran, an assistant professor and health economist at the University of Miami.
But she appreciated that over the life of the program, $47 billion was spent in 2024 dollars using the Consumer Price Index, or $109 billion using the CPI health care index. The medical index has a higher inflation rate because healthcare prices have risen more than overall prices.
Our solution
Kennedy said the rural health fund “will be the largest infusion of federal dollars into rural health care in American history.”
There is some truth to this statement, as the new program may be the largest single investment in rural health care financing.
But he ignores important facts and context that give a different impression.
Federal contributions to rural areas through Medicaid and Medicare easily eclipse the program's $50 billion mark. The new fund offers states flexibility in allocating resources, meaning there is no guarantee that all of the new funding will go to healthcare for rural Americans. The program comes at a time when rural areas are expected to lose far more from Medicaid cuts and rising numbers of uninsured patients than rural health fund injections can make up for.
Experts say the rural health fund's cash infusion is being undermined by other parts of Trump's tax and spending law that call for cuts and policy changes.
We rate this statement as “mostly false.”
Our sources
“Watch: Sanders and RFK Jr. get into a debate over the COVID vaccine and the firing of the director of the Centers for Disease Control and Prevention (CDC)“, CBS News, September 4, 2025.
“$50B 'Rural Health Fund' Faces Questions, Skepticism» KFF Health News, July 21, 2025
“Closing of rural hospitals“, Cecil G. Scheps Center for Health Services Research at the University of North Carolina at Chapel Hill, accessed September 15, 2025.
“Senate GOP considering protecting rural hospitals from Medicaid cuts“, Roll Call, June 20, 2025.
“Key Takeaways from CMS Rural Health Funding Announcement“, KFF, September 23, 2025
“Estimated budgetary implications of Public Law 119-21 providing for reconciliation pursuant to title II of H. Con. Res. 14, relative to the January 2025 CBO baseline.“, Congressional Budget Office, July 21, 2025.
“The Role of Medicaid in Small Towns and Rural Areas“, Georgetown University Center for Children and Families, January 15, 2025.
“MEMORANDUM A: The One Big Beautiful Bill is a historic investment in rural health careWhite House, no date.
Notice of Funding Opportunity for the Rural Health Transformation Programgovernment document published 15 September 2025
“Federal Budget in Fiscal Year 2023: Infographics“, Congressional Budget Office, March 5, 2024.
“Federal Budget in Fiscal Year 2024: Infographics“, Congressional Budget Office, March 20, 2025.
“Hill-Burton Compliant“, HRSA, accessed September 16, 2025.
“Hospital Charity Care and the Hill-Burton Act“, working paper by Kelsey Moran, updated September 15, 2025.
Telephone interview with Matthew Fiedler, senior fellow for economic research at the Brookings Institution Health Policy Center, September 24, 2025.
Telephone interview with Gbenga Ajilor, chief economist, and Allison Orris, director of Medicaid policy, Center on Budget and Policy Priorities, September 24, 2025.
Telephone interview with Larry Levitt, executive vice president of health policy at KFF, September 24, 2025.
Telephone interview with Joseph Antos, health policy expert and senior fellow at the American Enterprise Institute, September 23, 2025.
Telephone interview with Carrie Cochran-McClain, Director of Policy, National Rural Health Association, September 17, 2025.
Telephone interview with Kelsey Moran, Associate Professor, Department of Health Management and Policy, University of Miami, September 15, 2025.
Telephone interview with Alana Knudson, director of the NORC Walsh Center for Rural Health Analysis at the University of Chicago, September 12, 2025.
Telephone interview with Michael Mate, Director, Center for Rural Health and Research, East Tennessee State University, September 11, 2025.
