FACT FOCUS: Rural hospitals are expected to lose money from Trump's
bill, despite RFK Jr.'s promise
[August 28, 2025]
By AMANDA SEITZ
Rural hospitals are preparing to lose billions of dollars from President
Donald Trump’s signature tax and spending cut bill signed into law this
summer.
Dozens, already on the brink, have warned they face the prospect of
closure or reduced services because of the bill’s cuts to Medicaid,
which is funded by federal and state governments and provides health
care coverage for the poorest Americans.
At a cabinet meeting Tuesday celebrating working Americans, Health and
Human Services Secretary Robert F. Kennedy Jr. asserted that a historic
“ infusion of cash ” is on the way for rural hospitals throughout the
country.
“Right now we spend 7% of Medicaid dollars on rural hospitals,” he said.
“They're getting the short end of the stick.” To address that, he said a
new fund — established in the legislation — will give rural hospitals an
extra $10 billion every year.
Here's a look at the facts.
THE CLAIM: “Under the rural transformation program, we give them an
extra $10 billion a year. We’re raising an infusion of cash, rural
hospitals and rural communities, by 50%. It’s going to be the biggest
infusion in history and it’s going to restore and revitalize these
communities.”
THE FACTS: There's more to that nearly 900-page bill than Kennedy let on
at the White House.
It's true that Republicans established a new fund that will set aside
$10 billion every year for rural hospitals, providers and clinics. But
they did that to offset significant cuts that rural hospitals are
expected to endure as a result of the legislation, which also slashes
$1.2 trillion from the federal budget over the next decade, primarily
from Medicaid.
Roughly 10 million people are expected to lose health insurance from the
legislation. Most people will lose Medicaid.
That will leave many hospitals with patients who can't afford to pay for
emergency services. The changes are expected to hit rural areas, where
as many as 1 in 4 Americans rely on Medicaid to pay for health
insurance, particularly hard.
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Governor Greg Abbott signs Make Texas Healthy Again legislation
alongside U.S. Secretary of Health and Human Services Robert F.
Kennedy Jr. and Texas Republican lawmakers at the Capitol, which
requires the food industry to remove certain additives or add
warning labels for those products sold in Texas, in Austin, Texas,
Wednesday, Aug. 27, 2025. (Mikala Compton/Austin American-Statesman
via AP)
 Estimates have suggested that rural
hospitals, in particular, could lose between $58 billion and $137
billion over the next decade because of the bill's provisions. As
many as 300 rural hospitals were at risk for closure because of the
GOP's bill, according to an analysis by The Cecil G. Sheps Center
for Health Services Research at the University of North Carolina at
Chapel Hill.
The Rural Health Transformation Program established
in the law is supposed to prevent those closures. It sets aside $10
billion annually from 2026 to 2030.
Hospitals and health industry experts have warned that while the
fund throws a lifeline to rural hospitals, it won't save them all.
“This certainly wouldn’t offset that entirely,” Washington
University health policy analyst Timothy McBride said of the fund.
Then there's the matter of how hospitals will actually access the
funds. Half of the $50 billion will be divided equally among all
states. The other half will be divided based on a formula, developed
by the Centers for Medicare and Medicaid Services, that examines a
state's rural population and the number of low-income people it
serves.
Dividing some of the funds equally among states, however, will
ultimately give some states, even those that have few rural
hospitals, the same amount of money as those states that have a
significant number of rural hospitals.
“They all have needs, but at least half of the funds are going to be
distributed equally, which doesn’t make sense,” McBride said. “Some
states don’t have very many, and others have a lot.”
A spokesperson for Kennedy did not respond to a request for comment.
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