WASHINGTON — President Donald Trump’s administration unveiled Monday hundreds of millions of dollars each state will receive this fiscal year as part of a massive $50 billion rural health fund baked into Republicans’ “big, beautiful” law.
The five-year Rural Health Transformation Program — authorized under GOP lawmakers’ mega tax and spending cut package Trump signed into law in July — is designed to offset the budget impacts on rural areas due to sweeping Medicaid cuts.
Half of the $50 billion will be distributed equally among each state between fiscal years 2026 and 2030, according to the Centers for Medicare and Medicaid Services.
The agency under the U.S. Department of Health and Human Services said the remaining $25 billion, doled out over the same time period, is being allocated to states based on several factors, such as steps states are taking to improve access to care in rural communities, as well as their existing laws and policies.
For example, South Carolina received credit for the 2023 law repealing the Certificate of Need regulatory permission process for hospitals. And the state was expected to score major points for aligning with the Trump administration’s “make America healthy again” initiative by banning the purchase of candy, sodas and other sugary drinks with federal food assistance, Eunice Medina, director of the state Department of Health and Human Services, told the SC Daily Gazette after the agency submitted its application.
Texas will get the highest first-year award at $281.3 million, followed by Alaska at $272.2 million, California at $233.6 million, Montana at $233.5 million and Oklahoma, at $223.5 million.
New Jersey is receiving the lowest first-year award, at $147.2 million.
South Carolina’s award tops $200 million in the first year. That puts the state on track for receiving the $1 billion over five years that the state health agency requested in its application.
“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 Administrator Dr. Mehmet Oz said in a statement alongside the announcement.
Oz added that “CMS is proud to partner with every state to turn their ideas into lasting improvements for rural families.”
Meanwhile, the nonpartisan health research organization KFF found that the program would offset a little more than one-third of the package’s estimated $137 billion reduction in federal Medicaid spending in rural areas over the next decade.
However, according to KFF’s analysis, the 10-year decrease for rural South Carolina is expected to tally $870 million. The rural health fund could more than offset that over the next five years.
The law’s impact is less in South Carolina than other states largely because the state is among 10 that never expanded Medicaid coverage to all adults up to 138% of the federal poverty level, as intended under the 2010 law commonly known as Obamacare. For that reason, most of the biggest Medicaid changes in Republicans’ tax policy package don’t apply to the Palmetto State.
One provision will affect hospitals, which stand to lose roughly $150 million annually for 15 years, starting in 2028, according to the South Carolina Hospital Association.
That’s due to the law’s phaseout of the so-called state directed payment program, which South Carolina has used since 2023 to hike Medicaid payments to hospitals by 70% on average.
Ashley Murray in Washington and Seanna Adcox in South Carolina contributed to this report.
Shauneen Miranda is a reporter for States Newsroom’s Washington bureau. An alumna of the University of Maryland, she previously covered breaking news for Axios.
SC Daily Gazette is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
