For months, health care officials and voters urged U.S. Reps. Dan Newhouse, R-WA-04, and Michael Baumgartner, R-WA-05, to vote against House Resolution 1, also known as the One Big Beautiful Bill Act — and avoid hundreds of billions of dollars in cuts to Medicaid, the federally funded health insurance program.
Both voted with their party instead, but since the bill’s passage, they have stressed its inclusion of $50 billion earmarked for rural hospitals and health care facilities.
The two Republican representatives have argued that the funding shows a commitment to rural health care in their districts despite the bill’s $990 billion in cuts to Medicaid. A high percentage of residents in both Newhouse’s and Baumgartner’s districts are covered under Apple Health, the state’s Medicaid program. Both maintain the cuts were necessary to ensure that Medicaid funds would go to residents who truly need coverage.
Many health care officials see the funding as a mitigating factor in a bill expected to gut medical care for vulnerable patients, Republicans and the Trump administration are promoting the funding as a transformational opportunity for rural hospital and health care facilities. But health care officials in the state note that the funding makes up only a fraction of the Medicaid cuts that will go into effect over the next decade. And many questions remain about how the funding will be allocated.
Washington state is getting ready to apply for its portion of federal funds.
Half of the $50 billion will be divided across 50 states over five years, which amounts to about $100 million annually for each state.
According to the Centers for Medicare & Medicaid Services, the Rural Health Transformation Program is intended to “[s]trengthen rural communities across America by improving health care access, quality, and outcomes by transforming the healthcare delivery ecosystem.”
In reality, it may be more of a stopgap effort. “We hope it can be a bridge or help [hospitals] prepare or shore up before [cuts] come,” Jacqueline Barton True, vice president of advocacy and rural health at the Washington State Hospital Association. “But they’re not going to make hospitals whole for the cuts they’re receiving Medicaid payments or potentially large loss of coverage we’re going to see in this state.”
How the program will work
Applications are due from each state in November, with funding to be announced in December.
To receive the funding, states must demonstrate in their applications that the funds would be used in at least three areas outlined by the federal agency to improve rural healthcare. They include interventions and efforts to manage chronic disease management, technology to improve care in rural hospitals and workforce development.
The Washington State Health Care Authority, which will submit the state’s application, has received 140 submissions – from rural hospitals, industry associations, health care companies, providers and other stakeholders – on how Washington should appropriate the funds. The agency will accept feedback on how best to use federal funds until Sept. 26.
So far, stakeholders have suggested that funding support hospital infrastructure and operations; AI and cybersecurity; and specialty care, including geriatrics and behavioral health.
The Washington State Hospital Association has submitted a 10-page letter outlining their priorities for the funding, including a rural nursing program pairing community colleges and rural hospitals; cybersecurity and electronic records; and capital improvements to improve and upgrade hospitals.
The money should be used to increase and improve existing health services in rural areas, True said. “This is not that much money, quite frankly, in the scheme of things, and [the time to use funds] is very narrow. We would not want to see it diverted to launch an idea which cannot get out from its own weight.”
Meanwhile, the Washington State Medical Association, which represents medical providers across the state, has proposed loan forgiveness for medical providers who agree to work in rural areas for a certain period.
Offering loan forgiveness could be a way to address the shortage of physicians in rural areas, said John Bramhall, the Association’s president and professor emeritus at the University of Washington. He also worked as an anesthesiologist at Harborview Medical Center for 30 years.
Bramhall said the Association also pushed for funds to increase obstetrics and gynecological care, which have been cut back in rural areas, constraining access to prenatal care. Addressing this disparity is crucial in preventing maternal mortality or other negative pregnancy outcomes.
What’s next
The other half of the $50 billion will be distributed at the discretion of the Centers for Medicare & Medicaid Services using a “variety of factors,” including rural population, proportion of rural facilities in the state and the specific situation of certain hospitals in each state.
True of the Washington State Hospital Association said the organization has been in talks with Washington’s Congressional delegation and noted that Newhouse specifically has pushed for Washington to receive some discretionary funding. “We’re hopeful we can be considered for the discretionary money, but by no means is it guaranteed,” she said.
