Alabama gets $199 million rural health award as concerns over cuts persist
Alabama Republicans praised the grants, while health nonprofits and state Democrats have raised concerns funding will not offset broader budget cuts enacted last year.
The Centers for Medicare and Medicaid Services announced Monday that nearly $2 million in grants will go to Alabama’s Rural Health Transformation Program for the 2027 fiscal year.
CMS, a federal agency within the U.S. Department of Health and Human Services, announced $10 billion in RHTP grant awards for all 50 states, including $199,278,801 for Alabama. Alabama received $203,404,326 in federal funding for its RHTP in the 2026 fiscal year.
The RHTP was established through last year’s One Big Beautiful Bill Act, or the Working Families Tax Cuts Act. The program will award grants to states through fiscal year 2030 to modernize and strengthen rural health care services across the U.S., totaling $50 billion.
“President Trump made a historic investment in rural America, and HHS is putting those resources to work in every state,” HHS Secretary Robert F. Kennedy Jr. said. “This next $10 billion will expand access to care, strengthen the rural health workforce, improve prevention, and help states build solutions that fit the needs of their own communities. We are giving rural America the resources and flexibility to build stronger health systems that deliver better care and better outcomes.”
CMS Administrator Dr. Mehmet Oz highlighted that rural Americans have a life expectancy three years shorter than their urban peers.
“President Trump’s Rural Health Transformation Program is funding the historic investments necessary to close that gap,” Oz said. “States have already put these resources to work bringing better care closer to home for their rural communities, and CMS looks forward to helping them build on that progress in the coming year.”
The announcement of next year’s grants was met with support from congressional Republicans.
“I was proud to see Alabama awarded nearly $200 million for fiscal year 2027 through the Rural Health Transformation Program, marking over $400 million for our state to date as a result of the Working Families Tax Cuts Act," Strong told APR in a Monday written statement. "Our rural hospitals play a critical role in caring for patients across North Alabama, and I am proud of this historic investment to ensure they have the support they need to deliver quality healthcare closer to home.”
U.S. Senator Katie Britt, R-Alabama, and U.S. Representative Dale Strong, R-Alabama, both celebrated the announcement, via social media, pledging to help improve health care access for Alabamians.
“With today’s announcement, Alabama has now received $402 million this Congress,” Britt wrote. “I’ll continue working tirelessly to strengthen rural healthcare and help families access quality medical services closer to home.”
"This historic investment is a tremendous win for rural Alabama and will help improve healthcare for families and communities across our state," U.S. Representative Gary Palmer, R-Alabama, wrote on X.
While the Rural Health Transformation Fund marks significant investment in rural health care systems, nonprofits Commonwealth Fund and the Kaiser Family Foundation have raised concerns that the cuts will offset only around a third of the impact of OBBBA health care and supplemental nutrition cuts.
The OBBBA also enacted more than $1.3 trillion in cuts to Medicaid, Affordable Care Act marketplaces and the Supplemental Nutrition Program.
“The $50 billion funding increase through the Rural Health Transformation Program will not offset the much larger losses in health insurance coverage, decreased access to care, and increased hunger caused by H.R. 1 cuts,” the Commonwealth Fund wrote in a June 2026 report.
The organization also projected that cuts will cause 1.65 million job losses by 2029, nearly half of which are in the health care sector. The Congressional Budget Office estimated in its projections that Americans receiving the bottom 10 percent of income in the income distribution will lose roughly $1,200 or 3 percent of their income annually because of the law’s cuts.
When asked for a response to the RHTP funding awards, U.S. Representative Terri Sewell, D-Alabama, while expressing support for the program, also raised concerns that the grants won’t be able to fully absorb the impacts of OBBBA cuts.
“I welcome any effort to support rural healthcare, but these grants will not come close to offsetting the nearly $1 trillion in cuts that President Trump and Republicans made to our healthcare system in the so-called Big Beautiful Bill,” Sewell said. “While these grants may fund worthwhile projects, they are like putting a band-aid on an open wound. They will not stop the bleeding caused by Trump’s healthcare cuts.”
“I am hearing significant concerns from our smaller hospital administrators that the program’s eligibility requirements are too burdensome and restrictive, limiting their ability to use these funds to cover the operational expenses that are essential to keeping their doors open,” the representative added.
Sewell went on to pledge to work with the upcoming Democrat-controlled Congress in seeking to reverse OBBBA cuts and strengthen the RHTP.
“As a member of the Ways and Means Committee, I look forward to working in the new Democratic majority to improve and strengthen this program, so it delivers the flexibility communities need to keep healthcare services available,” the representative said. “I will continue fighting in Congress to reverse these harmful cuts, support our rural hospitals and providers, and ensure that every Alabamian can access the quality, affordable healthcare they deserve."
Alabama’s Rural Health Transformation Program is administered by the Alabama Department of Economic and Community Affairs and is fully funded by CMS. ADECA administers the program under the direction of the governor.
