Rural hospital leaders and advocates in Pennsylvania are planning for the future after the passing of President Trump’s spending bill, which cuts more than a trillion dollars from Medicaid over the next decade.
The Senate added a $50 billion rural health transformation fund to the bill to address concerns about rural hospitals that rely on Medicaid and Medicare reimbursements, but some experts worry about how the grant funding will be used.
“We are the third largest rural state in the nation," said Lisa Davis, the director of the Pennsylvania Office of Rural Health, which is based at Penn State University Park.
Davis said the application for those rural health grants doesn’t exist yet, and she’s eager to see how it defines “rural.” She worries the money won’t go to the smaller community hospitals that need it the most.
“I think some of the concern, and I was just on a call, we were talking about that, is that the funds may go to the larger entities that have rural hospitals or rural facilities," Davis said.
States have to submit grant applications by the end of the year.
Another concern for Davis is the proposed budget for the U.S. Department of Health and Human Services. HHS funds several rural health programs throughout the country, but their funding is either reduced or completely eliminated in the proposed budget for fiscal year 2026.
Davis said the $50 billion grant program in the overall federal budget law is appreciated, but “I'm hopeful that it will be in addition to continuing to support the other rural programs," Davis said.
Those other programs include Medicare, workforce programs that support rural hospitals, and the State Offices of Rural Health program, which includes the Pennsylvania Office of Rural Health.
The 2026 HHS budget is just a proposal at this point, and still needs to be approved by Congress.
