(Bloomberg) — The Trump administration is announcing awards to states from a rural health care fund, with the threat that some of that money can be clawed back if jurisdictions fail to embrace policy initiatives backed by the president.
The discretionary grants for 2026 range from $145 million to $281 million for states, according to Mehmet Oz, the head of the Centers for Medicare and Medicaid Services. Oz said Monday the award decisions were made by “subject-matter experts” from both within and outside the federal government following a review of applications from states.
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Oz said that while half of the $50 billion fund was “equally distributed” to all states, the decisions announced Monday pertain to the $25 billion discretionary half of the fund. The law authorizes grants through a five-year period from fiscal years 2026 through 2030.
The discretionary amount is being handed out to states based on a calculation of their rural population and existing health-care infrastructure to serve that population, accounting for 50% of that tally; policy actions taken by the states, accounting for 20%; and initiatives those jurisdictions proposed to bolster rural health services, which impacted 30% of the award calculation.
If states fail to embrace some health care policies promoted by the administration, however, the amount set for their 2026 grants could be clawed back and they could see future allocations reduced. Senior administration officials briefed reporters on the awards on condition of anonymity, however, it was not clear what exact policies would be considered in that determination.
The administration has taken steps to promote its health-care agenda, including an order by President Donald Trump to reinstate a presidential fitness test and moves to allow states to prevent food benefits from being used for unhealthy foods and drinks — efforts which Oz alluded to on Monday, in addition to measures on medical licensing and insurance regulation.
States will be forced to undergo a re-scoring process every year with the Office of Rural Health Transformation, according to an administration official.
“The rural parts of this country have fallen tragically behind in many areas, and part of the reason for that, we believe, were that systems that had been designed 50, 60, 70 years ago to support health care in rural parts of the country are no longer functioning at the pace and at the efficiency that one would have expected,” Oz said.
Monday’s announcement comes as the administration moves to address one of Trump’s looming political vulnerabilities — the growing concerns among voters over health care access and costs. Trump has sought to assure the public in recent weeks that he is tackling the cost of living more broadly, with polls showing mounting anxiety over his economic agenda and its impact on Americans’ pocketbooks.