WASHINGTON — Pennsylvania's plan to stabilize its struggling rural health care systems will get a $193 million infusion as President Donald Trump's administration implements a new five-year program that some say will not offset future Medicaid cuts.

The federal funding — which the state plans to first spend on the most pressing rural care needs like preserving hospital and EMS capacity — is part of the initial tranche of a $50 billion Rural Health Transformation Program.

It was created with Trump's signature legislation this summer, known as the “One Big Beautiful Bill,” that extended sweeping tax cuts, allowed workers to deduct taxes on tips and overtime, increased the child tax credit and more. The law's roughly $1 trillion in Medicaid cuts over a decade, meanwhile, will increase the uninsured population and threaten the survival of rural hospitals in Pennsylvania and across the country, according to independent analyses and critics of the law.

The rural health program grants will be dispersed annually, with amounts based on states' implementation of plans approved by the administration, including “Make Rural America Healthy Again goals,” according to the Centers for Medicare & Medicaid Services.

Mehmet Oz, the CMS administrator and former Republican U.S. Senate nominee in Pennsylvania, called the initial funding “an extraordinary milestone for rural health in America.”

Democratic Gov. Josh Shapiro and his administration also celebrated the announcement, though a spokesperson later said it would not offset the “enormity” of a projected $20 billion loss in federal Medicaid funding starting in 2028.

Department of Human Services Secretary Val Arkoosh said in a statement that it will be “a catalyst” for driving local improvements to rural care across the state.

The need for that kind of shot-in-the-arm is intense, particularly as 2.4 million Pennsylvanians who live in rural areas and already experience poorer health conditions watch their community health facilities close or struggle to remain viable, according to the plan Shapiro's team submitted to the Trump administration.

Eight acute care hospitals closed between 2020 and 2023, and three rural hospitals closed labor and delivery units within the last year, according to the plan released in November.

While some hospitals reported strong finances in the fiscal year ending June 2024, three dozen rural hospitals operated at a loss, the Pennsylvania Health Care Cost Containment Council reported earlier this year.

Under the plan submitted for the federal funds, the state will create eight regional Rural Care Collaboratives based in existing geographically organized economic areas of the state.

Each collaborative will determine priorities specific to their region to improve access to care, expand telehealth and other technology, address workforce shortages and more.

The entire 67-page plan contains specific benchmarks and is the result of a statewide community engagement effort that predated the federal initiative. Key objectives include:

— 85% of rural residents able to get a routine primary care appointment within four weeks and an urgent appointment within one week.

— 85% of rural hospitals and clinics equipped with broadband and telehealth functionality.

— 10% reduction in vacancies for key direct care roles.

— 20% reduction of pregnant women living in rural areas with inadequate access to prenatal care.

As the collaboratives get underway, the state will funnel the initial money into “Rapid Response Access Stabilization grants” for “near-term” needs and to support work already ongoing in communities. DHS spokeswoman Ali Fogarty said applications for those grants would be opened quickly after final budget work is completed.

Under the law, half of all funding must be distributed equally to all approved states — at least $100 million each — regardless of the state's size or rural population needs.

Pennsylvania, whose health plan states that its rural population is the third-largest in the country, received the 34th largest award for 2026, according to the announcement from CMS this week. Every state received an award, ranging from $147 million to about $281 million.

Meanwhile, Medicaid changes that were part of the same law could decrease overall federal spending in Pennsylvania by $46 billion by 2034, according to KFF, a nonpartisan health care research organization. The reduction could leave two dozen rural hospitals in Pennsylvania at risk of closing and more than 300,000 people uninsured, according to Shapiro's administration.

Nicole Stallings, president and CEO of the Harrisburg-based Hospital Healthsystem Association of Pennsylvania, said Pennsylvania's allotment for the rural health program will help, but not to the extent of making up for the Medicaid cuts.

She said in a statement that rural hospitals have already been “chronically underfunded” and the changes now will mean a $4.5 billion direct payment cut in the next decade.

“While funding awarded to Pennsylvania will not offset significant payment cuts and increased uncompensated care resulting from federal cuts, investments in health care workforce development and infrastructure and technology upgrades will provide an infusion of resources to help rural hospitals more sustainably care for their communities,” Stallings said.

Fogarty said Pennsylvania could receive nearly $1 billion for the rural program, “an important tool for our Commonwealth.” But the other $20 billion reduction in federal assistance for Medicaid over 10 years beginning in 2028 will also “disproportionately impact rural hospitals.”

“It will not — and cannot — offset the loss Pennsylvania's health care system will experience due to actions taken by Congressional Republicans and President Trump,” she said.

U.S. Sen. Dave McCormick, a Republican who voted for the law, said the announcement this week was effectively “the largest federal investment in rural healthcare in American history.”

“Quality healthcare will now be more readily available close to home for rural Pennsylvania families,” he said in a statement.

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