Texas will receive the largest portion of the federal government’s new Rural Health Transformation Program, with $281.3 million allocated for 2026.
The funding comes from a $50 billion initiative created under the Working Families Tax Cuts, also known as the One Big Beautiful Bill Act, to strengthen health care in rural communities across all 50 states, according to a Centers for Medicare & Medicaid Services press release. The first-year awards for 2026 range from $147 million to $281 million, with an average of $200 million per state.
“More than 60 million Americans living in rural areas have the right to equal access to quality care,” said U.S. Health and Human Services Secretary Robert F. Kennedy Jr. in a statement. “This historic investment puts local hospitals, clinics, and health workers in control of their communities’ healthcare.”
Texas’ Rural Health Transformation plan, titled Rural Texas Strong: Supporting Health and Wellness, outlines six initiatives aimed at improving access, strengthening the workforce, expanding telehealth, and modernizing rural health infrastructure. The plan aims to add more than a thousand rural health professionals, mitigate chronic disease, and reduce duplicative health costs, according to a HHS press release.
Senator John Cornyn (R-TX) released a statement on December 29, 2025, saying, “I was proud to vote to create the new Rural Health Transformation Program to improve health care for the millions of Texans living in rural areas across the Lone Star State. I’m grateful to the Centers for Medicare & Medicaid Services, Dr. Oz, and the Trump administration for allocating Texas this significant funding, which is yet another example of the Working Families Tax Cuts benefitting all Texans.”
While Texas will receive the largest total award, the allocation per rural resident is lower than in some other states due to its large rural population — roughly $60 per resident — according to the San Antonio Express-News. Alaska received the second-largest award of $272.7 million.
Rural hospitals in Texas have faced significant financial pressures, with 14 closures in the last decade and over half of the remaining facilities at risk of shutting down. Many have reduced labor and delivery services, leaving large areas without local obstetrics care, the San Antonio Express-News reported.
The new federal spending comes as broader federal Medicaid funding reductions are being implemented. Rep. Don Bacon (R-NE), who voted for legislation that slashed Medicaid spending, pointed to the fund when recently questioned about how the cuts could hurt rural health care centers. “That’s why we added a $50 billion rural hospital fund, to help any hospital that’s struggling,” Bacon said, per PBS. “This money is meant to keep hospitals afloat.”
Some healthcare officials believe this spending of taxpayer dollars will not be enough. “When you put that up against the $50 billion for the Rural Health Transformation Fund, you know — that math does not add up,” Carrie Cochran-McClain, chief policy officer with the National Rural Health Association, told PBS.
The HHS press release said the federal funds will be used to create wellness and nutrition programs, attract health professionals to rural areas, and modernize resources and technology at rural health centers. The funding is part of a broader effort that also ties a portion of the $50 billion to policy alignment with Trump administration priorities.
The program will distribute $10 billion per year from 2026 through 2030, with half of the funds shared equally among all states and the remaining half allocated based on rural population, health metrics, and the projected impact of each state’s proposed initiatives, according to CMS.