Recognizing that the Medicaid and other health care cuts in the recently enacted FY 2026 budget reconciliation bill – the so-called One Big Beautiful Bill – will exact a heavy toll on rural hospitals, Congress included in that bill a short-term Rural Health Fund designed to help ameliorate the impact of some of the cuts it was adopting.

KFF Health has taken a closer look at the Rural Health Fund, how it is structured, and how it is expected to work and has identified some of the bill’s major components.  They include:

  • The rural health fund includes $50 billion, which is about one third of the estimated loss of federal Medicaid funding in rural areas
  • The Rural Health Fund Includes $50 Billion, With Half to Be Distributed Equally Among States With Approved Applications and Half to Be Distributed Based on an Approach Determined by CMS Within Broad Requirements
  • The rural health fund will be temporary, while many of the cuts in health spending are not time limited
  • CMS will have broad leeway in how it distributes funds across states
  • States will have discretion in how they distribute funds among hospitals, and other providers, and may be able to steer some dollars to nonrural areas, subject to CMS approval
  • The law does not direct CMS or states to be transparent about the allocation and use of funds

Learn more from the KFF article “A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law.”