Trump Admin Launches $50 Billion Rural Health Transformation Program

Authorized under the One Big Beautiful Bill Act, the initiative aims to undo decades of declining rural health outcomes without rolling out new infrastructure.

Medicare and Medicaid Administrator Dr. Mehmet Oz speaks in the Oval Office during an event about weight-loss drugs on Nov. 6, 2025. Andrew Caballero-Reynolds/AFP via Getty Images

The Trump administration plans to distribute between $147 million and $281 million to each U.S. state in 2026 through a widespread rural health program designed to provide better access to medical care in rural areas.

The effort, which is one aspect of the One Big Beautiful Bill Act, earmarks $50 billion across five fiscal years, making available $10 billion annually from 2026 to 2030 to all 50 states. Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz revealed the plan on Dec. 29 and emphasized its goal to reverse the trend of long-term declines in rural health metrics while avoiding building out costly new infrastructure.

“This is a massive effort to change the unfortunate reality that has overtaken rural health care in America, which is that your ZIP code has started to predict your life expectancy,” Oz told reporters.

He said the money will also go toward other pilot projects across the country.

Administration officials said that half the funds will be divided evenly among the states and that the other $25 billion will be apportioned according to rural health care infrastructure, state-led reforms, and application-based proposals. Funds could be reclaimed if states fail to meet benchmarks or neglect their committed reforms.

“The purpose of this $50 billion investment in rural health care is not to pay off bills,” Oz said. “The purpose of this $50 billion investment is to allow us to right-size the system and to deal with the fundamental hindrances of improvement in rural health care.”

The announcement comes as rural hospitals have been at the center of Medicaid overhaul discussions.

“We have an unstable market that is causing lots of potential peril to Americans who need our help the most,” Oz told reporters in June.

This rural push aligns with Trump’s fiscal 2026 “skinny budget“ for the Department of Health and Human Services, cutting discretionary spending by 33 percent to $80.4 billion and axing 20,000 jobs.

Those reforms combine multiple agencies into a new Administration for a Healthy America, which integrates rural programs and redirects any savings from the streamlining to HHS Secretary Robert F. Kennedy Jr.’s priorities, including environmental health, mental health services, and chronic disease prevention.

The administration has also highlighted $14 billion in identified Medicaid fraud, waste, and abuse through the Department of Government Efficiency, as highlighted by Oz earlier this year.

“There’s about $14 billion we’ve identified with DOGE, of folks who are duly enrolled wrongly in multiple states for Medicaid,” Oz told Fox News’s “Sunday Morning Futures” in May.

Complementary measures include agreements with nine pharmaceutical firms to cut drug costs and expanded coverage models for select weight-loss medications.

Reuters contributed to this report.