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Federal Rural Health Grants Cut for Idaho
· Confirmed
In Short: Federal authorities announced on Monday that Idaho will receive approximately $182.7 million in the second year of the Rural Health Transformation grant, a decrease from the first year's allocation.
Federal authorities announced on Monday that Idaho will receive approximately $182.7 million in the second year of the Rural Health Transformation grant, a decrease from the first year's allocation.
The Rural Health Transformation grant, part of the 2025 One Big Beautiful Bill Act, was designed to improve rural healthcare across the nation with a total of $50 billion allocated over five years.
On Oct. 28, Idaho and federal authorities had announced the state had fully utilized its first-year funds on various projects, including infrastructure improvements at rural hospitals, emergency medical equipment, and healthcare workforce development.
The federal Centers for Medicare and Medicaid Services (CMS) lists as a condition of funding that states cannot exceed 15% of federal funding awarded for health provider payments, including payments to rural hospitals.
KFF estimates that HR1 will reduce federal Medicaid spending in rural areas by $137 billion over 10 years, impacting healthcare access.
The Rural Health Transformation Program was initially seen as a significant investment in rural healthcare, but its implementation has faced bureaucratic delays and complexities.
The delays and reductions in funding could have significant implications for rural healthcare systems, potentially affecting the quality and availability of care in these areas.
What this adds
The reduction in Idaho's funding highlights the complexities and bureaucratic hurdles faced by the Rural Health Transformation Program in its second year.
What's confirmed
- CMS lists as a condition of funding that states cannot exceed use of 15% of federal funding awarded to the state for health provider payments – including payments to rural hospitals.
- KFF estimates that HR1 will reduce federal Medicaid spending in rural areas across all states by $137 billion over 10 years.
- This assumption that the RHTF was primarily about helping rural hospitals was taken up by state legislative officials as well.
- For more information see our other CCF blogs on the RHTF including background, analysis of the state application process, the need to address maternal health shortages, and the importance of addressing the needs of children and families in rural areas.
What's still developing
- “We are giving rural America the resources and flexibility to build stronger health systems that deliver better care and better outcomes.” How are the rural health grant amounts decided?
- Editorial Note: Originally published on July 16, 2025, this brief has been updated over time to include new information and data about the Rural Health Transformation Program.
- To help mitigate the impact on rural areas, the law created the Rural Health Transformation Program (referred to here as the “rural health fund”), which will award $50 billion in state grants from 2026 to 2030 to support rural health care.
- Kentucky won nearly $213 million last year, and Fisher wrote that the rural money was meant to “lessen the impacts” of expected reductions in federal Medicaid funding.
- Members of Congress may have had different motivations for passing HR1, but the implementation of the law around the RHTF is different than the assurances around help for rural hospitals many policymakers gave the public. [Editor’s Note: The Georgetown University Center for Children and Families Rural Health Policy Project report published earlier this year found that non-elderly adults and children living in rural areas and small towns are more likely than those living in metro areas to rely on Medicaid for their health insurance.
- While there was nothing in the bill’s language in HR1 requiring that the funding in the RHTF be provided to rural hospitals to protect them from large Medicaid cuts, there was also no prohibition against states using RHTF funding for that purpose—and members of Congress who voted yes in the end repeatedly cited the fund’s ability to protect their rural hospitals.