$50B Rural Health ‘Slush Fund’ Faces Questions, Skepticism

A last minute race to add a $ 50 billion rural health program to the massive tax and expenditure law of President Donald Trump left the hospital and clinic leaders nationally but perplexed.

The rural health transformation program provides that federal regulators return states $ 10 billion per year for five years from the 2026.

But the “devils in details in terms of implementation,” said Sarah Hohman, director of government affairs at the National Association of Rural Health Clinics.

“An investment in this amount and this style in rural areas – hope it goes to rural regions – is the type of investment on which we and other defenders have worked for a long time,” said Hohman, whose organization represents 5,600 rural health clinics.

People who live in the rural areas of the country have more chronic diseases, die younger and earn less money. These composition factors have financially struck rural health infrastructure, triggering hospitals and an end of the stopping of critical health services such as obstetrics and mental health care.

Almost 1 in 4 people in rural America uses Medicaid, the national and federal program for low -income and disabled people. Thus, while the Senate Republicans have faithfully debated the discounts of Medicaid spending, the legislators added the $ 50 billion program to repress the opposition. But health defenders and researchers doubt that it will be enough to compensate for the expected reductions in federal funding.

The head of the majority of the Senate, John Thune, a Southern Dakota Republican, who has one of the largest percentages of rural residents in the country, led pressure to adopt the budget bill. Its website supports support for strengthening access to care in rural areas. But his office refused to answer the files on the rural health program included in the bill.

Senator Susan Collins, a Republican from Maine who presented an initial amendment to add the rural program, did not respond to a request for comments. On July 15, Senator Josh Hawley, a Missouri republican, presented a bill to reverse the Future Cups in Medicaid and add to the rural program.

Michael Cannon, director of studies on health policies at the Cato Institute, a libertarian reflection group whose head office is in Washington, DC, said that money had been put aside due to politics and not necessarily for rural patients.

“As long as it is a fundamental snow fund where politics decides where money is going, there will be a gap between where these funds go and what consumers need,” said Cannon.

The non -partisan congress budget office believes that Federal Medicaid expenses will be reduced by around 1 Billion of dollars over the next decade.

“These amounts in dollars are reflected in real people,” said Fredric Blavin, main member and researcher of the Urban Institute, a Washington DC reflection group which focuses on social and economic research.

Most states have expanded their Medicaid programs to cover more adults with low income under the affordable care law. This lowered the medical debt, better health and even a reduction in mortality rates, said Blavin.

By 2034, approximately 11.8 million people should lose their health insurance of this bill, said Alice Burns, associate director of the KFF program on Medicaid and the non-assured. And she said the Medicaid Rollback could have an oversized impact on rural areas.

In rural areas, Federal Medicaid expenses are expected to decrease $ 155 billion over 10 years, according to a KFF analysis, a non -profit organization of health information that includes Kff Health News.

If the objective of the rural program was to transform rural health care, as its name suggests, it will fail, said Burns. The rural program of $ 50 billion distributed over five years will not compensate for the losses expected over a decade of MEDICAIDE reduction, she said.

In Kansas, the director general of the Holton Community Hospital, Carrie Lutz, said that she “did not think heaven is falling right now”.

Lutz, whose 14 -bed hospital is in the northern state plains, said it was preparing for the potential loss of patients covered with Medicaid and limits taxes on providers, which almost all states use to obtain federal money from additional medicaid.

The reduction in service providers has been delayed until the year 2028 said Lutz, but she still wants the leaders of her state to apply for part of the rural program financing, which should be distributed earlier.

“Each small penny helps when you have very negative margins to start,” said Lutz.

The $ 50 billion in the program will be spread over five years and will not limit themselves to strengthening rural areas or their hospitals. Half of the money will be distributed “also” between the states that apply and earn the approval of the centers for Medicare & Medicaid Services. The current language of the law “raises the possibility” that a small state as the Vermont can receive the same amount as a large state like Texas, said Burns.

States are required to subject a “detailed plan to transform rural health” by the end of this year, according to law.

The law claims that the States should use funds to pursue objectives, in particular the improvement of access to hospitals and other suppliers, to improve health results, to improve economic opportunities for health workers and to the priority of the use of emerging technologies.

Mehmet Oz, one named by Trump, Director Medicare and Medicaid, will determine how to distribute the other half, or 25 billion dollars, using a formula based on rural population and the needs of states. The law indicates that money should be used for things such as the growing use of robotics, upgrading of cybersecurity and aid to rural communities “to the good size of their health care service systems”.

CMS spokesperson did not answer a list of questions.

Kyle Zebley, main vice-president of public policies of the American Telemedicine Association, said that there was “a fairly large degree of discretion” for the White House and the Director of Medicare and Medicaid in the approval of the plans of the State.

“We urge states to include options for TV and robust virtual care in their proposals going to the federal government,” said Zebley.

Alexa McKinley Abel, Director of Affairs and Politicians at the National Rural Health Association, said that if the law calls for states to create and submit plans, it is not clear which state agencies will carry out the task, said McKinley Abel.

“There are a lot of gaps around the application and implementation,” she said, noting that an earlier version of the bill has asked for state plans to develop in consultation with state offices funded by the federal government of rural health.

But these offices are offered to be eliminated in the Federal Budget of Trump, which will face the approval of the Congress in the fall. McKinley Abel said that his organization supports rural health offices helping to develop plans and work with states to pay money, “because they intimately know the rural health community.”

Hohman, with the Rural Health Clinic Association, said that she was not sure that money from the transformation program will even reach its members. About 27% of patients treated in rural health clinics are registered in Medicaid, she said.

“There is just a certain confusion on who obtains this money at the end of the day,” said Hohman. “Why is it really going to be used?”

Kff Health News’ main correspondent Phil Galewitz has contributed to this report.