Texas and Alaska will receive the largest amount of funding from the $50 billion Rural Health Transformation Program in fiscal year 2026, while New Jersey and Connecticut will see the least, the Centers for Medicare & Medicaid Services (CMS) announced Monday.
All 50 states had submitted applications to the federal government in November outlining plans to improve rural healthcare with their share of funds from the five-year program, which was authorized this summer under the One Big Beautiful Bill Act (OBBBA).
Under the statute, half of the $10 billion-per-year distribution is split between the states evenly. The remaining half is determined by the CMS based on how well the states’ pitches met goals of strengthening rural health prevention, standing up sustainable access, developing a rural workforce and introducing innovative care delivery and technology.
While this process translates to an average receipt of $200 million per fiscal year, the decision from the CMS on exactly how much each state will receive has been hotly anticipated as healthcare providers across the country prepare to navigate upcoming Medicaid funding cuts included in the OBBBA.
“Today marks an extraordinary milestone for rural health in America,” CMS Administrator Mehmet Oz, M.D., said in the agency’s announcement. “Thanks to Congress establishing this investment and President Trump for his leadership, states are stepping forward with bold, creative plans to expand rural access, strengthen their workforces, modernize care and support the communities that keep our nation running. CMS is proud to partner with every state to turn their ideas into lasting improvements for rural families.”
Monday’s announcement was also paired with a document (PDF) from the CMS that includes one-page abstracts of each application, as submitted by the states. Only a subset of states have so far opted to make their full applications available to the public.
In fiscal year 2026 (which begins Oct. 1, 2026), Texas will receive $281,319,361 to execute its “Rural Texas Strong” strategy—a six-part strategy with initiatives including “Lone Star Advanced AI and Telehealth,” “Infrastructure and Capital Investments for Rural Texas” and the wellness- and nutrition-focused “Make Rural Texans Healthy Again,” according to the abstract of its application.
Alaska is also set to receive $272,174,856 in the coming fiscal year for its “flexible, phased and voluntary” initiatives, which, according to its abstract, include incentives to “shift from traditional volume-based reimbursement models,” maternal and child health programs and rural healthcare workforce development. Of note, reluctance from Alaskan Republican Sen. Lisa Murkowski to sign off on the OBBBA’s nearly $1 trillion in Medicaid funding cuts during the summer’s negotiations was reportedly a key factor in the rural health fund’s creation.
Other top recipients of the funds detailed Monday were California ($233,639,308), Montana ($233,509,359), Oklahoma ($223,476,949) and Kansas ($221,898,008).
On the other end of the spectrum were New Jersey ($147,250,806), Connecticut ($154,249,106), Rhode Island ($156,169,931), Delaware ($157,394,964) Massachusetts ($162,005,238), Arizona ($166,988,956) and Maryland ($168,180,838). See the full list of announced awards here.
Congress set down a tight timeline for the Rural Health Transformation Program. After its creation with the OBBBA’s signing in July, states received the full criteria for their applications Sept. 15 with a mid-November deadline for submission. The CMS was then required to announce the award decisions by Dec. 31, with the funds beginning to flow Oct. 1, 2026, for the next five years.
Trump administration officials have described the program as an unprecedented influx in funding to support rural health providers. With Medicaid providing about $19 billion in federal funds to rural America, adding $10 billion per year represents a limited-time increase of nearly 50%, Oz said of the program during a November speech.
“More than 60 million Americans living in rural areas have the right to equal access to quality care,” Department of Health and Human Services Secretary Robert F. Kennedy Jr. said in the announcement “This historic investment puts local hospitals, clinics and health workers in control of their communities’ healthcare. Thanks to President Trump’s leadership, rural Americans will now have affordable healthcare close to home, free from bureaucratic obstacles.”
Provider organizations have been similarly optimistic about the additional funds—with the caveat that the five-year, $50 billion program and its various spending limitations are no replacement for the nearly $1 trillion of nationwide Medicaid cuts expected over the coming decade.
Among those restrictions specified in the CMS’ Notice of Funding Opportunity were a block on most new care facility construction or the replacement of clinical service payments reimbursable by insurance or other health coverage. The notice also outlined a 10% cap on funding for direct and indirect administrative purposes, as well as percentage-based limitations around certain electronic health system replacements.
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