States Vie for $50 Billion to Revamp Rural Healthcare and Combat Chronic Illness

In November 2025, all 50 states have submitted applications to the new $50 billion Rural Health Transformation Program, a federal initiative created in response to concerns about the impact of Medicaid cuts on rural healthcare.

The program's goals include expanding mobile health access, strengthening emergency medical services, and recruiting more doctors and nurses to underserved rural communities. States have proposed a range of initiatives, such as using telehealth to monitor chronic conditions, establishing regional "hubs" to coordinate care, and offering incentives to retain rural practitioners.

However, healthcare leaders across the country express concerns that the new funding will not be enough to offset the $137 billion in Medicaid cuts expected to hit rural areas over the next decade. Hospitals, already struggling with financial pressures, fear they may have to cut critical services like maternal care.

While the Rural Health Transformation Program is a welcome infusion of resources, experts say it is ultimately a "Band-Aid" solution that fails to address the underlying structural issues in the healthcare payment system that have long disadvantaged rural communities. As states await the federal government's decisions on their applications by the end of 2025, the future of rural healthcare remains uncertain.