Payam Javan: The Trump administration plans to distribute between $147 million and $281 million to each U.S. state beginning in 2026 as part of a sweeping rural health initiative aimed at improving access to medical care in underserved areas. The program is embedded within the One Big Beautiful Bill Act and allocates $50 billion over five fiscal years, providing $10 billion annually from 2026 through 2030 to all 50 states.

The initiative was unveiled by Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services, who said the goal is to reverse long-term declines in rural health outcomes without building costly new infrastructure. Oz emphasized that geography has increasingly become a predictor of life expectancy and said the funding would also support pilot health projects nationwide.

According to administration officials, half of the funding will be distributed evenly among states, while the remaining $25 billion will be allocated based on rural healthcare infrastructure, state-led reforms, and competitive applications. States that fail to meet performance benchmarks or follow through on reforms could see funds reclaimed. Oz stressed that the investment is intended to restructure and modernize rural healthcare systems rather than simply cover existing expenses.

The announcement comes amid broader Medicaid overhaul discussions and aligns with President Trump’s fiscal 2026 “skinny budget” for the Department of Health and Human Services, which proposes a 33 percent cut in discretionary spending and the consolidation of agencies into a new Administration for a Healthy America. The administration has also pointed to $14 billion in identified Medicaid fraud through the Department of Government Efficiency, along with agreements to reduce drug costs and expand coverage models, as complementary steps to support rural patients.