RFK Jr. misses Mark in touting the Rural Health Transformation Fund as a historic infusion of cash

“This will be the largest infusion of federal dollars into rural health care in American history.”

Robert F. Kennedy Jr. on September 4, 2025, at a Senate hearing

At a Senate hearing in September, Health and Human Services Secretary Robert F. Kennedy Jr. bragged about President Donald Trump’s rural health initiative.Big, beautiful bill“.

“This will be the largest infusion of federal dollars into rural health care in American history.” Kennedy said, Response to criticism from Sen. Bernie Sanders (I-Vt.). Sanders said the law would hurt rural patients and hospitals.

Kennedy was referring to the five-year, $50 billion law Rural health transformation programmeHHS spokeswoman Emily Hilliard said. GOP lawmakers have made similar claims about the program.

The fund was added to the bill at the last minute to secure support from Republican lawmakers representing rural states. Some were concerned about how the bill’s Medicaid cuts would hurt rural America More than 150 hospitals It has ceased 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.

“The transformation fund has already been talked about in the context of bailing out rural hospitals that will face these significant cuts to Medicaid,” said Carrie Cochran McLean, chief policy officer at the National Rural Health Association. Medicaid is a joint federal-state health insurance program that primarily covers low-income people and people with disabilities.

Is Kennedy right in describing the Rural Health Fund as a historic cash infusion, or is he failing to acknowledge the monetary context?

Rural health transformation programme

Trump’s tax and spending law is expected to cut federal Medicaid spending in rural areas by at least $137 billion by 2034, according to a recent report. Analysis by KFFa non-profit health information organization that includes KFF Health News. the The Congressional Budget Office expects The law will increase the total number of uninsured patients by 10 million by 2034.

Rural health facilities disproportionately rely on Medicaid reimbursement to survive. In 2023, 40.6% of children and 18.3% of adults under 65 are from rural areas and small towns They are enrolled in MedicaidAccording to the Center for Children and Families at Georgetown University. In urban areas, the rates were 38.2% and 16.3%, respectively.

The Trump administration argues that rural hospitals cannot rely on “legacy” funding sources like Medicaid and Medicare because of the programs’ reimbursement structure, which ties payments to the number of services provided, a financially unsustainable model for rural facilities with typically low patient volumes.

“The Rural Health Transformation Program is distinct from these other programs in that it is designed to provide a flexible source of investment” to promote innovation, efficiency and sustainability, the White House said. He wrote in a note.

Here’s how it works. States can propose projects led by state agencies, health care providers, consultants, and vendors that aim to achieve various purposes, such as improving technology, access to care, and workforce recruitment.

States can use only 15% of their transformation program funding for provider payments, and they can direct the money to non-rural areas. According to KFF.

Half of the $50 billion will be divided equally among the states whose applications are approved — regardless of their rural populations and the population overall — according to “Notice of financing opportunity“For the programme.

The other half will be awarded based on the “transformative potential” of countries’ grant proposals; The extent of their commitment to aligning their health policies with those of the Trump administration; and data on rural population, rural health facilities, uncompensated care, and other measures.

The application deadline is November 5.

The big picture

The rural health community is excited about the innovations the new program might foster, but “would love to see it happen in the absence of these cuts that will devastate our rural health system,” said Michael Mitt, director of the Center for Rural Health and Research at East Tennessee State University.

“This is not going to fill the hole,” Mitt said.

KFF estimates that the Rural Health Fund’s five-year investment of $50 billion has been slightly exceeded One-third of the expected loss of federal funding in rural areas which will be distributed over 10 years. According to this analysis, Medicaid cuts over that period would amount to at least $137 billion in rural areas.

This number does not take into account other reductions caused by the same law, such as reductions in the ACA’s marketplaces or the loss of health 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, while cuts in federal spending 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 — not providing ongoing funding to keep facilities open or replace lost Medicaid funds. Even if this money leads to successful innovations, there are doubts that it will happen in time to prevent the closure of rural health facilities.

“There’s a real misconception that this money is somehow going to be able to save rural America or save rural hospitals,” Cochran-McLean said.

Kennedy’s comment is something “politicians say when they want to ignore the rest of the politics,” said Joseph Antos, a health policy expert and senior fellow emeritus at the conservative-leaning American Enterprise Institute.

“What they wanted was to say they were creating a new program,” Antos said. “Well, this is a very inefficient way to distribute a relatively very small amount of money to hospitals that will incur much larger bad debts over the coming years, thanks to cuts in Medicaid.”

One caveat

When viewed outside mandatory programs like Medicare and Medicaid, the $50 billion rural health fund appears unrivaled, especially for a limited five-year program, experts said.

Many of them mentioned the Hale-Burton Act as another program that contributed significantly to enhancing health care in rural areas. The law stipulates loans and grants for this purpose Modernizing or building 6,800 health facilitiesMany were in rural areas, from 1946 to 1997, according to the Health Resources and Services Administration.

Incomplete financing data makes it difficult to calculate inflation, said Kelsey Moran, an assistant professor and health economist at the University of Miami.

but I appreciated That during the program period, $47 billion was spent in 2024 dollars when using the CPI, or $109 billion when using the CPI’s Medicare index. The medical index sees a higher inflation rate because health prices have risen more than overall prices.

Our rule

The Rural Health Fund “will be the largest infusion of federal dollars into rural health care in American history,” Kennedy said.

This statement contains an element of truth because the new program could be the most significant one-time investment in rural health financing.

But it ignores the facts and critical context that creates a different impression.

Federal contributions to rural areas from Medicaid and Medicare make the $50 billion set by that program very small. The new fund provides states flexibility in how they allocate resources, meaning there is no guarantee that all of the new funding will go to health care for rural Americans. The program comes at the same time when rural areas are expected to lose far more from Medicaid cuts and an increase in the number of uninsured patients than the Rural Health Fund can fill.

Experts say the cash infusion for the Rural Health Fund is negated by other parts of Trump’s tax and spending bill that call for cuts and policy changes.

We rate this statement Mostly False.

Our sources

“Watch: Sanders and RFK Jr. engage in controversial exchange over coronavirus vaccine, CDC director firing“, CBS News, September 4, 2025.

“The $50 billion rural health “Slush Fund” faces questions and doubts“,” KFF Health News, July 21, 2025.

“Rural hospitals closeCecil G. Ships Center for Health Services Research at the University of North Carolina-Chapel Hill, accessed September 15, 2025.

“Senate GOP is considering protecting rural hospitals from Medicaid cuts“, Roll Call, June 20, 2025.

“Key takeaways from CMS’s rural health funding announcement“,”KFF, September 23, 2025.

“The estimated budgetary impacts of Public Law 119-21, to provide reconciliation pursuant to title II of H. Con. Accuracy. 14, compared to the baseline issued by the Central Bank of Oman in January 2025Congressional 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.

“Response Note: The Big Beautiful Bill is a historic investment in rural health care“, The White House, n.d.

Notice of Funding Opportunity for the Rural Health Transformation Programa government document published on September 15, 2025.

“Federal Budget for Fiscal Year 2023: ChartCongressional Budget Office, March 5, 2024.

“Federal Budget in Fiscal Year 2024: ChartCongressional Budget Office, March 20, 2025.

“Hill-Burton Facilities Compliance“, HRSA, accessed 16 September 2025.

“Charitable hospital care and the Hale-Burton Act“, working paper by Kelsey Moran updated September 15, 2025.

Telephone interview with Matthew Fiedler, senior fellow in economic studies at the Center for Health Policy at the Brookings Institution, September 24, 2025.

Telephone interview with Gbenga Ajilor, chief economist, and Alison Uris, director of Medicaid policy at the Center on Budget and Policy Priorities, September 24, 2025.

Telephone interview with Larry Levitt, executive vice president for health policy at KFF, 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 McLean, chief policy officer at the National Rural Health Association, September 17, 2025.

Telephone interview with Kelsey Moran, assistant professor in the Department of Health Management and Policy at the University of Miami, September 15, 2025.

Telephone interview with Alana Knudson, director of the NORC Walsh Center for the Analysis of Rural Health at the University of Chicago, September 12, 2025.

Telephone interview with Michael Mitte, director of the Center for Rural Health and Research at East Tennessee State University, September 11, 2025.