Ohio is receiving more than $200 million from the Centers for Medicare and Medicaid as part of a newly created federal program to strengthen health care in rural communities.
The Rural Health Transformation Program was formed in last summer’s budget reconciliation law, often called the One Big Beautiful Bill. That bill also contained hundreds of billions of dollars in cuts to federal Medicaid spending.
In total, it’s a $50 billion fund, meant to be distributed to states in $10 billion increments each year until 2030.
Ohio’s Republican leaders have praised the program, lauding it as a way to expand access to health care in rural parts of the state and strengthen the rural health workforce.
But critics have said it pales in comparison to the ongoing revenue from Medicaid.
"Calling it a Band-Aid on a bullet wound is an insult to Band-Aids," Alex Jacquez with Groundwork Collaborative, a progressive economic policy group in Washington, D.C., told an Ohio Newsroom reporter in July.
Taylor Wizner, a health reporter with Ohio Newsroom member station Ideastream Public Media, joined the Ohio Newsroom to explain the context.
How does Ohio’s award compare to other states?
“In total dollars, Ohio's award looks pretty average. The state is getting just over $202 million this first year, which ranks 25th nationally, basically right in the middle. That's because half the money is required by law to be split evenly, so every state gets $100 million right off the top.
“But when you look at it per rural resident, Ohio fares much worse. Ohio received about $70 per rural resident, with only four states receiving less per person. So while the headline number sounds really big, it stretches across a very large rural population, as more than 73 of Ohio's 88 counties are rural or partially rural.”
How is Ohio planning to spend the money?
“The state submitted a proposal to the Centers for Medicare and Medicaid Services, CMS, last fall, and it outlines a pretty broad slate of projects. The biggest investments would go to what Ohio calls the Rural Health Innovation Hubs. That's partnerships between hospitals, community health centers and behavioral health providers with a price tag that could top $100 million.
“There's also funding planned for school-based health centers in rural districts, expanded vision, hearing and dental care for students, workforce pipeline programs to train and keep doctors and nurses in rural communities, and upgrades to emergency care and health technology. State leaders say the goal is to modernize rural health systems and bring care closer to home, not just to keep hospitals afloat.”
How do federal Medicaid cuts impact rural communities?
“Medicaid is especially important in rural Ohio. Rural hospitals tend to serve older, sicker and lower-income patients, so they rely heavily on Medicaid reimbursements to stay open. Federal estimates show the law will cut Medicaid spending by more than $900 billion over 10 years, with about $137 billion of that affecting rural areas nationwide.
“In Ohio alone, policy experts estimate more than $5 billion dollars in federal Medicaid funding could be lost over the next decade. That puts pressure on already fragile hospitals, maternity wards and EMS services, especially in places that are pretty far from specialty care.”
Is this program enough to offset Medicaid cuts?
“The short answer is no. Even supporters of the program say this funding can help, but it won't fully replace what's being lost. The entire $50 billion rural health fund only offsets about a third of projected Medicaid cuts in rural areas. And the money is temporary: It runs out after 2030.
“There are also limits on how the money can be spent. Only a small share can go directly to paying for patient care, which is where many rural hospitals are hurting the most. So Ohioans may see new clinics, mobile health units or workforce programs, but experts warn that once the federal money dries up, the underlying financial problems could still be there.”
