Fact Check: RFK Jr. Overstates Impact of Rural Health Transformation Fund

At a recent Senate hearing, Health and Human Services Secretary Robert F. Kennedy Jr. made a bold claim about a rural health initiative within President Donald Trump’s “One Big Beautiful Bill Act,” describing it as “the biggest infusion of federal dollars into rural health care in American history.”

Kennedy was responding to criticism from Senator Bernie Sanders (I-Vt.), who argued the law would harm patients and rural hospitals. The secretary was referring specifically to the law’s five-year, $50 billion Rural Health Transformation Program, according to HHS spokesperson Emily Hilliard.

The program was added to the bill in its final stages to secure support from Republican lawmakers representing rural states. Many of these legislators had expressed concerns about how the bill’s Medicaid cuts would impact rural America, where healthcare infrastructure is already fragile. Since 2010, more than 150 rural hospitals have either stopped offering inpatient services or closed completely, according to data from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.

“The transformation fund was really talked about in the context of saving rural hospitals that would be facing these significant Medicaid cuts,” explained Carrie Cochran-McClain, chief policy officer at the National Rural Health Association.

However, the reality is more complicated than Kennedy’s statement suggests. According to an analysis by KFF, a health information nonprofit, Trump’s tax and spending law is expected to reduce federal Medicaid spending in rural areas by at least $137 billion by 2034. The Congressional Budget Office predicts the law will increase the overall number of uninsured patients by 10 million in the same timeframe.

Rural health facilities are particularly dependent on Medicaid reimbursement for financial viability. In 2023, 40.6% of children and 18.3% of adults under age 65 from rural areas and small towns were enrolled in Medicaid, according to the Center for Children and Families at Georgetown University—higher rates than those in metropolitan areas.

The Trump administration contends that rural hospitals cannot rely on “legacy” funding sources like Medicaid and Medicare due to their reimbursement structures, which tie payments to service volume—a model challenging for rural facilities with typically lower patient numbers.

Under the Rural Health Transformation Program, states can propose projects led by state agencies, healthcare providers, consultants, and vendors focused on improving technology, access to care, and workforce recruitment. However, states can use only 15% of their transformation program funding for direct provider payments and may direct money to non-rural areas, according to KFF.

Half of the $50 billion will be evenly divided among states with approved applications, regardless of their rural or overall populations. The other half will be awarded based on the “transformative possibilities” of states’ grant proposals, their alignment with the Trump administration’s health policies, and data on rural population, rural health facilities, uncompensated care, and other metrics.

“There’s a real misperception that somehow these funds are going to be able to save rural America or save rural hospitals,” Cochran-McClain noted.

Michael Meit, director of the Center for Rural Health and Research at East Tennessee State University, expressed mixed feelings: “The rural health community is excited about the innovations the new program might foster, but I’d love for it to happen in the absence of these cuts that are going to devastate our rural health system. It’s not going to fill the hole.”

KFF estimates that the rural health fund’s five-year, $50 billion investment represents just over a third of the expected loss of federal funding in rural areas over a decade. That calculation doesn’t account for other reductions stemming from the same law, such as cuts to ACA Marketplaces or revenue losses expected from an increase in uninsured patients.

Joseph Antos, a health policy expert and senior fellow emeritus at the American Enterprise Institute, characterized Kennedy’s comment as something “politicians say when they want to ignore the rest of the policies.”

When viewed outside of mandatory programs like Medicare and Medicaid, the $50 billion rural health fund does appear unprecedented, especially for a limited five-year program. Some experts compared it to the Hill-Burton Act, which provided loans and grants that modernized or built 6,800 health facilities, many in rural areas, from 1946 to 1997.

Ultimately, while Kennedy’s statement contains elements of truth because the program represents a significant one-time investment in rural health funding, it ignores critical context—notably that the program coincides with Medicaid cuts expected to far exceed the new funding and that the program offers no guarantee all funds will directly support rural healthcare.