Rural Health Fund Falls Short of Estimated Medicaid Cuts

In the battle over how the One Big Beautiful Bill Act affects rural hospitals, Health and Human Services Secretary Robert F. Kennedy Jr. has touted a five-year $50 billion fund as “an infusion of cash” that will “restore and revitalize” rural communities. But his statements ignore the higher estimated Medicaid spending cuts to rural areas under the law.

Other administration officials have made similar claims, such as Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services. He and Kennedy have misleadingly claimed the fund would be a 50% increase over Medicaid spending now going to rural hospitals.

The independent health policy research organization KFF estimated that the OBBBA’s Medicaid provisions could lower federal Medicaid spending in rural areas by $137 billion over 10 years. An analysis by Manatt, a legal consulting firm, for the National Rural Health Association estimated a smaller impact on rural hospitals alone (not more broadly to rural areas) — a reduction of $58 billion in federal Medicaid funds over a decade.