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Photo by Spencer Platt\/Getty Images
\nGabriel Drapper, who didn\u2019t have health insurance, has his pulse and blood pressure checked at a Remote Area Medical (RAM) mobile dental and medical clinic at Terre Haute South High School on August 02, 2025 in Terre Haute, Indiana.<\/p>\n
Over the next five years, nearly $1 billion could be heading to Pennsylvania\u2019s coffers earmarked for rural health investments. The federal dollars are designed to create an opportunity to invest in innovative ideas that typically don\u2019t get dedicated funding. <\/p>\n
The money is meant to ease the impact of deep cuts to Medicaid funding in the coming years under President Donald Trump\u2019s signature legislation, the \u201cOne Big Beautiful Bill.\u201d<\/p>\n
But, some say it comes at a steep cost to the state.<\/p>\n
Pennsylvania Department of Human Services Secretary Val Arkoosh put the commonwealth\u2019s loss under Medicaid at $20 billion between 2028 and 2038, which dwarfs the funding the state hopes to get under the Rural Health Transformation Plan. <\/p>\n
\u201cThis RHTP grant, at most, is going to bring in a billion \u2014 maybe a tiny bit more than a billion \u2014 over the next five years,\u201d said Arkoosh. \u201cWe\u2019re thrilled about it, and we\u2019re going to be able to do some really exciting, transformative things with that money.<\/p>\n
\u201cBut there is absolutely no way that $1 billion can replace $20 billion,\u201d she added. <\/p>\n
Arkoosh\u2019s number is lower than an estimate from experts at the health policy organization, KFF, which projects that the state will lose between $34 billion and $57 billion. KFF also concluded that while the average rural American will see $157 in benefits from this proposal, rural Pennsylvanians will get $78 each. <\/p>\n
One area of reduced spending restricts state-directed payments to hospitals and nursing facilities, a method of payment designed to leverage higher provider payment rates. The center-left group Third Way estimates cuts to hospitals will be $1 billion in the commonwealth, which comes at a time when some rural hospitals are closing their doors.<\/p>\n
\u201cAnd the really heartbreaking piece of this is that those Medicaid cuts are going to fall disproportionately on our rural hospitals, many of (which), very few of (which) are actually profitable today,\u201d said Arkoosh. \u201cAnd it is only going to further the economic pressure that these hospitals are facing, and we are certain that a number are likely to close because of these cuts.\u201d <\/p>\n
More than hospital funding<\/p>\n
Federal rural health funds explicitly can\u2019t be used to stabilize rural hospitals, forcing states to shift their approaches. Notably, Medicaid is the primary payer for most rural hospitals. <\/p>\n
\u201cThe pressure is going to be on states to be able to perform. We\u2019re not going to be just throwing money at rural areas of the country and hoping things improve,\u201d said Joe Glinka, with Pittsburgh-based managed care organization Highmark Wholecare. \u201cThere\u2019s going to have to be a concerted effort with creating a more recognizable and accessible ecosystem beyond hospitals.\u201d<\/p>\n
Glinka is the board president of PAMCO, or Pennsylvania Medicaid Managed Care Organizations, whose members contract with the state to administer Medicaid for the state\u2019s three million enrollees. But he said that the federal government has \u201cmade it clear\u201d that grant dollars \u201ccannot just be a Medicaid plan.\u201d<\/p>\n
On the state level, Arkoosh said it was \u201cfortunate\u201d that the Shapiro administration was already focused on a rural health plan prior to the federal grant. She noted that listening sessions across the state informed different priorities included in the commonwealth\u2019s plan.<\/p>\n
But Glinka criticized the state approach for focusing too much on hospitals, and not on surrounding supports like clinical and community-based wraparound services. Socioeconomic impacts to health, including poverty, food insecurity and job availability, all tie into a person\u2019s overall health, he noted.<\/p>\n
\u201cWith the pressure on hospitals as it is, you\u2019re not going to see a proliferation of hospital building in the rural health setting,\u201d said Glinka. \u201cWe\u2019re going to have to do things differently than what we\u2019ve done before.\u201d <\/p>\n
More on the rural <\/p>\n
health funding<\/p>\n
In the rural health program\u2019s first year, federal officials will be sending $193 million to the commonwealth, slightly less than the $200 million it requested in its initial application. That difference means Pennsylvania, and nearly every other state, will need to resubmit their budget plans for federal approval. <\/p>\n
Arkoosh said Pennsyvlania was making \u201cvery minor tweaks\u201d to accommodate for the $7 million difference, noting that none of the proposed programs would be eliminated. <\/p>\n
Once submitted, the federal government will take another 45 days to approve, meaning funds aren\u2019t expected to come to the state for roughly another month when the parties sign the final contract.<\/p>\n
\u201cI know everyone is so eager to get started, but we\u2019ve got a little bit of waiting to do yet,\u201d said Arkoosh about the deployment of funds.<\/p>\n
With money in hand, the state will turn to its existing Partnerships for Regional Economic Performance. Those groups will create the Rural Care Collaboratives (RCCs) that prioritize and spearhead rural health initiatives on the ground. <\/p>\n
RCCs in the eight regions (everywhere but Philadelphia and its collar counties) will hire a staffer to complete administrative tasks related to the funding, such as data collection and filing regular progress reports. <\/p>\n
\u201cOnce the RCCs have a staff person, then they can start their local convenings and start to identify who should be at those tables \u2014 not only the health and health care leaders, but the business leaders and philanthropic leaders, local education leaders,\u201d said Arkoosh. \u201cAll those pieces that we think are integral to success and sustainability of these projects, once that five years is up and the funding is spent.\u201d <\/p>\n
States are under pressure to deliver results early, as federal reviews begin in late summer and the next round of funding is set to be announced by the end of October. <\/p>\n
But Arkoosh urged RCCs to think of the funding as seed money, identifying outside revenue to keep services sustainable beyond the program\u2019s expiration date.<\/p>\n
\u201cIf we\u2019re able to create these projects in a way that the local folks have a plan to pick them up or make themselves sustainable \u2026 that is a real victory for rural health in Pennsylvania,\u201d said Arkoosh.<\/p>\n
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Pennsylvania Capital-Star is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com. Follow Pennsylvania Capital-Star on Facebook and Twitter.<\/p>\n