As the year draws to a close, a wave of anticipation is sweeping across rural America, with billions of federal dollars poised to reshape the landscape of health care in underserved communities. The $50 billion Rural Health Transformation Program, authorized earlier this year as part of the Working Families Tax Cut Act, stands as the largest one-time federal investment ever targeted at rural health care, according to reporting from the North Dakota Monitor, Valley News Live, and other regional outlets. The program’s impact is already being felt in states like North Dakota and Ohio, where lawmakers, health officials, and community leaders are scrambling to prepare for a windfall that could alter the trajectory of rural health for years to come.
In North Dakota, Governor Kelly Armstrong set January 21, 2026 as the tentative date for a special legislative session dedicated to appropriating the state’s share of federal rural health funding. Armstrong’s December 5 letter to legislative leaders made clear that the session’s start hinges on the Centers for Medicare & Medicaid Services (CMS) awarding the state its funding, a decision expected by December 31, 2025. Armstrong wrote, “We have an incredible opportunity to strengthen and reshape rural health care in North Dakota through the Rural Health Transformation Program. I appreciate the collaboration with legislative leadership and look forward to a special session laser-focused on the task at hand – appropriating these federal dollars in the most efficient and effective way possible to improve the well-being of our citizens.” (North Dakota Monitor)
The stakes are high. North Dakota’s application, submitted November 3, outlines a five-year plan to invest more than $500 million, focusing on four strategic pillars: strengthening and stabilizing the rural health workforce, expanding preventive care and healthy eating programs, bringing high-quality care closer to home, and connecting technology, data, and providers across the state. As Valley News Live reports, these priorities reflect input from over 1,200 residents and more than 300 participants in public listening sessions—demonstrating a rare level of grassroots involvement in state health planning.
Yet, while the session’s purpose is clear, the process could be anything but. Mike Nowatzki, spokesperson for Armstrong, explained that “he’s not able to limit them,” referring to lawmakers’ ability to introduce other topics once the session is underway. Senate Majority Leader David Hogue emphasized that the intent is to keep the focus squarely on rural health funding, but acknowledged that anything outside the core agenda would need a two-thirds majority in each chamber—a high hurdle in North Dakota’s 80-day-per-biennium legislature.
The Rural Health Transformation Program itself is structured to ensure both fairness and impact. As Dr. Mehmet Oz, head of CMS, explained during a December 5 visit to Scranton, Pennsylvania, “The $25 [billion] of the $50 billion will be doled out equally to every single state, independent of everything else. The second part of that is designed to specifically, and be tailored to issues of how rural you are, where your population lives, and a bunch of other variables.” (Valley News Live) The remaining $25 billion will be distributed based on state applications and metrics showing where funding can make the biggest difference.
Ohio, too, is vying for a substantial slice of the federal pie. With over 70 of its 88 counties classified as rural or partially rural, the state faces daunting challenges: staffing shortages, rising costs, and the closure of vital services like labor and delivery units. A 2022 March of Dimes report highlighted that four rural Northeast Ohio counties have limited access to such care, and Ashland County has none at all. According to Vantage Healthcare of Ohio president Carly Salamone, “More school-based health centers to mobile optometry, dental and vision services for kids in rural communities — that’s huge because there just aren’t many dentists who take Medicaid in these areas. Being able to bring those resources directly to families who haven’t had that access before is going to make a significant difference.”
Ohio’s application targets three key areas: keeping rural hospitals open by modernizing equipment and expanding specialty services; building the rural medical workforce pipeline; and improving access through telehealth, EMS upgrades, mobile clinics, and school-based health centers. Mike Appleman, who leads the rural education program at Northeast Ohio Medical University, believes the plan’s focus on expanding rural medical training could help attract and retain doctors in these underserved areas. “So much of medical training occurs in urban places, so leveraging our great rural partners is an excellent way to increase student interest and comfortability of working in rural places,” Appleman said.
Despite the optimism, there’s no shortage of skepticism and concern. Most of the federal funds must go to new initiatives and innovation, with only 10% allowed for uncompensated care—an issue for Ohio, which is projected to lose more than $33 billion in federal Medicaid funding over the next decade. Even if Ohio receives up to $1 billion over five years, as some experts predict, it may not be enough to stabilize struggling rural hospitals or keep essential services open. Salamone also points out that “a lot of people in our rural communities, they [don't] want telehealth. They want to see their doctor in their office. So there's a lot of hesitancy and trust and relationships that still need to be built.”
In Pennsylvania, the broader implications of the Rural Health Transformation Program—and related federal reforms—are also coming into focus. Dr. Oz’s visit to Scranton underscored local anxieties about Medicaid changes set to take effect in just over a year, as well as the looming expiration of Affordable Care Act subsidies. Commissioner Ronald R. Schmalzle of Pike County lamented, “Unfortunately, we are the picture of rural healthcare that is underserved. It's our role to work with everybody to change that picture and to be a better picture in the future.”
Accountability is a central theme of the new funding regime. Dr. Oz stressed, “We didn’t want to just give the money out and hope it works. We purposely put strings attached so if you promise to do certain things and don't do them, you should be penalized; however, if you do those things and other states don't do what they promised to do, you're going to get their money.” This approach is designed to ensure that the federal investment yields measurable improvements, rather than disappearing into bureaucratic black holes.
As legislative leaders in North Dakota prepare to meet—and as states like Ohio await word from CMS—the uncertainty is palpable. Will this unprecedented infusion of federal cash truly transform rural health care, or will it prove a fleeting lifeline for systems already battered by years of underinvestment and policy churn? The answer, as always, will depend on how well state leaders, local communities, and federal agencies can work together to turn opportunity into lasting change.
For now, rural America stands at a crossroads, hopeful that the coming months will mark not just a new year, but a new era for health care in the heartland.
