Michigan has been awarded over $173 million from the federal government for an initiative to “strengthen rural health,” according to the state Department of Health and Human Services (MDHHS).
The state’s funding is part of a $50 billion “Rural Health Transformation Program,” which was created as part of President Donald Trump’s One Big Beautiful Bill (OBBB), a sweeping tax break and spending cuts package signed into law on July 4.
The health program is being billed as a way to strengthen and modernize care in rural communities across the country.
It has received mixed national reaction since it was established this summer, with some lawmakers and rural health advocates concerned that a portion of funds are based on passage of policies favored by the Trump administration. Others don’t believe the funds will offset Medicaid cuts also included in the OBBB.
And Michigan’s Health and Hospital Association (MHA) doesn’t feel the state’s proposal, which earned it $173 million of an original $200 million request, goes far enough.
In a press release, Gov. Gretchen Whitmer said the federal investment “will support access to health care for rural communities across Michigan as we deal with funding shortfalls caused by federal Medicaid cuts.”
“This $173 million grant will help us connect more Michiganders to the care they need and provide essential wraparound supports,” she said. “In Michigan, we have successfully worked together to protect quality, affordable health care, and we will continue finding ways to secure more federal funds, expand coverage and lower costs.”
MHA said the proposal does not include explicit support for the state’s rural hospitals, however, and “fails to maintain access to care in the most meaningful way.”
On Monday evening, the Trump administration announced Michigan got $173,128,201 for the 2026 Fiscal Year, awarded by the Centers for Medicare and Medicaid Services (CMS) through the Rural Health Transformation Program.
All 50 states got funds, averaging $200 million and ranging from $147 million for New Jersey to $281 million for Texas.
The Rural Health Transformation Program will allow states to expand preventative, primary, maternal and behavioral health services, the federal government said, including through physical fitness and nutrition programs, expanded workforce training, new equipment for rural facilities and an expansion of telehealth services.
Health and Human Services Secretary Robert F. Kennedy Jr. described it as an “historic investment” putting local hospitals, clinics and health workers in control of their communities’ healthcare.
The program’s $50 billion will be allocated to approved states over five years, with $10 billion available each year from 2026 through 2030.
Half of the funding is distributed equally among all approved states, while half is allocated based on individual state metrics, like its number of rural residents, and its proposed policies.
Michigan has 75 of its 83 counties classified in whole or in part as rural, according to the state’s proposal for funds, and has the seventh-highest rural population in the nation.
The state also highlighted the need of rural residents – who face high rates of diabetes, heart disease and obesity – as healthcare systems in the state continue to erode.
Around 1.7 million rural Michiganders live in a county with a shortage of primary care doctors, MDHHS wrote, and 91% of rural Michigan counties have a primary care shortage.
Four rural hospitals have closed since 2005.
Of the just over 70 rural hospitals that remain open, 13 serve as the sole hospitals in their county, according to MDHHS.
And just over a quarter of those still open are operating at negative margins.
Michigan’s funding proposal to secure rural health program dollars was originally for around $200 million per year.
A project abstract put the state’s total ask at $1 billion, which would cover four initiatives. Those are:
to support development and strengthening of regional partnerships among rural hospitals, clinics and community organizations to improve care coordination and promote financially sustainable care models (state requested $26 million) to recruit and retain rural health professionals, behavioral health providers and community health workers (state requested $44.7 million)to implement technology tools and develop statewide standards for improved data sharing, along with increasing adoption of telehealth (state requested $53 million) to establish digital referral networks that connect residents to local care, prevention and wellness resources needed to live healthy lives (state requested $73 million)
Before submitting its application, MDHHS hosted an online survey and two listening sessions to gather input on how the funding could help rural providers.
MDHHS Director Elizabeth Hertel said the approved proposal focuses on enhancing the long-term sustainability of rural providers while supporting their growth and continued service to their communities.
Now, the funds will be administered through the state’s own grant program to recipients like local health departments, rural health clinics, hospitals, community-based organizations, universities and Tribal governments.
But in a Nov. 14 news release, Michigan Health and Hospital Association CEO Brian Peters said Michigan’s application ignored a potential $6 billion impact on the state’s hospitals due to federal Medicaid cuts, “and the intent of Congress to assist rural hospitals most impacted by these federal changes through this program.”
Peters said the proposal doesn’t include explicit support for Michigan’s rural hospitals, and none of the initiatives include recommendations from the state’s rural hospital leaders, “who know rural healthcare needs best.”
“While the four initiatives are well intended, the application as submitted fails to maintain access to care in the most meaningful way,” Peters said.
According to the MDHHS proposal, MHA and other partners like the Michigan Primary Care Association and Michigan Center for Rural Health were “instrumental in refining program proposals.”
The department had not responded to a request for additional comment on the MHA statement as of the time of publishing.