Rural Health Fund Awards Cannot Compensate for Enormous Medicaid Cuts that Threaten Home Care

Late last month, the Centers for Medicare & Medicaid Services (CMS) announced awards from a new “Rural Health Transformation Program” to all 50 states. This fund was tacked on to the Republican-passed 2025 budget reconciliation bill—HR 1—amid backlash over how the bill’s massive Medicaid cuts could harm rural hospitals.

Fund Cannot Compensate for Massive Medicaid Cuts

While the GOP lawmakers latched onto the idea of the fund as an offset to the bill’s devastating cuts, it falls dramatically short. The Rural Health Transformation Program is funded at $50 billion, but HR 1 cuts nearly $1 trillion from Medicaid and around $186 billion from the Supplemental Nutrition Assistance Program (SNAP). Together, these cuts are expected to have a disproportionate effect on rural health and communities.

Unfortunately, the fund’s ability to counter the bill’s damage to rural health systems is even less than the bare numbers reflect. Despite its name, much of the money is not targeted at rural communities, leaving access to care at ever greater risk for rural dwellers.

Extreme Risk for People Who Need Home Care

Most of HR 1’s Medicaid cuts have not yet gone into effect, but they will eventually hit state budgets hard. States already struggle to find enough workers to provide Medicaid home care, despite efforts to increase pay and other benefits. As state budgets contract, optional Medicaid services or eligibility will undoubtedly be attractive places for cuts, and Home- and Community-Based Services (HCBS) that allow older adults and people with disabilities to stay safely in their homes are expected to be a prime target. Researchers have shown that these benefits have been slashed in the past when state budget pressures arose.

It Is Still Not Too Late to Change Course

The Rural Health Transformation Program is not enough to offset major cuts to vital programs. Instead, policymakers must shore up Medicaid and SNAP programs nationwide, protect rural health access, reverse HR 1, and drive true innovation that supports all communities.