The Trump administration will distribute more than $203 million to Alabama to strengthen its rural healthcare system next year.
The Centers for Medicare and Medicaid Services announced awards on Monday for all 50 states as part of the Rural Health Transformation Program, which was created under President Donald Trump’s One Big Beautiful Bill Act. The $50 billion fund, which will last five years, is intended to offset the deep Medicaid cuts in the legislation.
Out of the 50 states, Alabama’s 2026 allocated amount ranks 24th at $203.4 million. Exactly how the funds will be spent is still to be determined.
Gov. Kay Ivey said she was “very pleased” to see Alabama awarded hundreds of millions for the first year of the program.
“After President Trump signed the One Big Beautiful Bill Act into law in July, Alabama got to work preparing for this program so we could hit the ground running once our state’s new comprehensive rural health strategy was approved,” Ivey said in a statement.
“Now that it has been approved, we will take the next steps to ensure our citizens and communities benefit for generations. Making America Healthy Again begins in rural America, and I look forward to being able to improve health care across Alabama.”
Across the country, the awards range from $147 million to $281 million. Texas, Alaska and California will receive the largest allocations next year. New Jersey, Connecticut and Rhode Island were awarded the least amount.
Over the five years, half of the $50 billion will be doled out evenly among the 50 states. The other half of the fund will be distributed based on a state’s needs, such as the rural population, a state’s health care policies and an application’s proposed initiatives, according to the CMS Notice of Funding Opportunity.
“This will be the one and only time perhaps you’ll ever hear me celebrate that some of our health outcomes are as poor as they are,” Alabama Hospital Association President and CEO Danne Howard told Alabama Daily News. “Because we have so many issues, our score was higher, which allowed us more opportunity from the CMS allocation.”
More than 1.6 million Alabamians, or 32%, live in rural counties.
In its application, Alabama requested about $900 million over five years to integrate its rural health care system across the state, expand access to maternal care and bolster its rural workforce.
It included 11 initiatives that involve improving electronic health records and IT capabilities, boosting telehealth services, and supporting EMS services.
Many of the initiatives include establishing “regional hubs” to provide IT and cybersecurity support, telehealth services, maternal and fetal health care and cancer detection screenings, among other services.
The Alabama Legislature is expected to pass legislation during its upcoming 2026 session to support the implementation of the program, according to the project narrative. The state’s plan allows for entities to “apply” for funding to help meet the outlined initiatives to transform rural health care, with funding to those entities set to be distributed toward the end of fiscal year 2026.
Howard said hospitals are eager to be involved in the state’s process of divvying up the money.
“There are a lot of different things in the Black Belt that might not be needed or might be different in north Alabama, so input from those providers on what things would be most helpful to them will be critically important for making sure that we get the biggest bang for our buck,” Howard told ADN.
U.S. Sen. Katie Britt, R-Ala., praised the initiative in a social media post.
“This historic funding will help strengthen maternal and obstetric care, address the root causes of chronic disease, improve health care outcomes, and expand telehealth services for families across our state,” Britt said.
The federal dollars will come at a critical time for the state’s rural hospitals, with 48% of them at immediate risk of closing as of December, according to the Center for Health Care Quality and Payment Reform.
Earlier this month, Ivey signed an executive order establishing the Alabama Rural Health Transformation Advisory Group to track the progress and implementation of the state’s program.
Speaker Nathaniel Ledbetter, Senate Pro Tem Garlan Gudger, Sens. Greg Albritton, Clyde Chambliss, Donnie Chesteen, Bobby Singleton, and Reps. Anthony Daniels, Jamie Kiel, Rex Reynolds and Pebblin Warren will be members.
The director of the Alabama Department of Economic and Community Affairs and the division chief of ADECA’s Federal Initiatives and Recreation Division will also be a part of it.
“Now the real work begins into making those decisions on how we can best make some not just transformative, but some sustainable changes in our health care delivery system,” Howard told ADN.