Federal funds for rural health on the way to Ohio, but not enough to offset cuts, advocates say

By Susan Tebben / January 15/ 2026

An award of $202 million has been announced for Ohio to combat hospital closures and a lack of access to health care in rural areas. The funding was welcomed by state leaders and advocates alike, but the funds are seen as a temporary fix to a problem made worse by federal cuts.

The five-year Rural Health Transformation Program — authorized under Republican lawmakers’ mega tax and spending cut package Trump signed into law in 2025 — is designed to offset the budget impacts on rural areas due to sweeping Medicaid cuts.

In Ohio, the Medicaid cuts from the federal spending bill amount to a loss of $33 billion over the next decade, according to an analysis by the healthy policy organization KFF.

A total of $50 billion is being spread out nationally through the Rural Health Transformation Program.

Ohio Gov. Mike DeWine said the state was “grateful to be awarded this funding so that more Ohioans can receive expanded access and enhanced quality to necessary health care.”

Republican state Rep. Kellie Deeter, co-chair of the Ohio House Rural Hospital Caucus, said Ohio’s award is “consistent with the proposal submitted by the state, so this announcement largely reflects what was anticipated.”

“However, it is still not enough to offset broader federal cuts and therefore will not meaningfully help our rural hospitals,” Deeter said.

“The focus now should be on how these dollars are deployed to deliver real, sustainable improvements in rural health care — particularly for rural hospitals that lack access to certain publicly funded revenue streams.”

Democratic state Rep. Anita Somani had a similar critique, saying the funding was appreciated, but was “equivalent to treating a severed artery with a bandage.”

“These funds will not stop the bleeding caused by other federal cuts, and any attempt to imply otherwise is misleading,” Somani said.

The governor’s office said the state proposal focused on addressing barriers to health in those rural parts of the state, like access to specialty care, lowered health outcomes, and higher rates of chronic disease.

The money will be used to invest in school-based health centers in rural communities, expanding the state’s child vision care program called OhioSEE to rural communities, and further addressing Ohio’s infant mortality rate, according to DeWine’s office.

The state included costs in its proposal for the funding, estimating the program and initiative cost to be between $181.8 million and $252 million.

‘Pressing health care and socioeconomic needs’.

In a “project narrative” compiled by the Ohio Department of Health as part of the application for the funding, state data showed 4.4 million Ohioans live in 73 counties that have the designation of fully rural or have a “significant rural footprint.”

The narrative mentions Ohio’s 74,000 farms and the more than 200 commodities grown in the state, including corn, soybeans, dairy, hogs, and poultry.

Rural counties also support manufacturing and forestry, along with tourism and recreation.

The Appalachian counties received a particular mention for “resource extraction,” a blanket term used when referring to fossil fuel drilling, timber collection, and other similar sectors.

“For many rural Ohioans, the land isn’t just scenery, it is livelihood,” the document stated.

The application documents from the state also lay out the challenges rural communities face when it comes to health care access, infrastructure support, income, housing, education and access to healthy foods.

“The story is consistent, rural Ohioans have strong ties to land and community, but also pressing health care and socioeconomic needs,” according to the state’s application.

A “chronic disease atlas” released by the state last summer found significant differences in health status and outcomes based on the region of Ohio in which those suffering from chronic disease live.

The research found chronic disease was more common in the southern counties of the state, including and in addition to the 32 counties of the Appalachian region.

Chronic diseases noted in the area were arthritis, asthma, chronic kidney disease, coronary heart disease, and chronic obstructive pulmonary disease.

“High mortality rates for all chronic diseases combined, Alzheimer’s Disease, cancer, and chronic lower respiratory disease are also concentrated in southern counties,” the report stated.

Rural, non-Appalachian counties had high instances of diabetes, high cholesterol, obesity, heart disease, and Parkinson’s Disease as well.

Those prevalence rates combine with a lack of regular visits to physicians, physical activity, health insurance, and insecurity when it comes to food and transportation, according to the state.

Ohio’s rural counties have 57 hospitals, with 33 categorized as critical access hospitals.

The designation was created by Congress decades ago, as hundreds of rural hospitals faced closure in the 1980s and 1990s.

According to the Centers for Medicare and Medicaid Services, hospitals are eligible to become critical access if they are currently participating in Medicare, or are health clinics or centers that downsized from acting as hospitals.

Medicare-participating hospitals can become critical access hospitals if they are in a rural area, are more than 35 miles from the nearest hospital, have no more than 25 inpatient beds and have an average length of stay of less than 96 hours per patient.

Rural health was struggling before the newest federal budget bill was signed into law last July, but Medicaid cuts and new rules in that budget had hospitals bracing for even more challenges and the potential for closures.

Since 2010, three rural hospitals have closed and the state said 10 more were at risk of closure.

“As of 2023, one in four rural hospitals in Ohio operated at a financial loss, and 18% were considered vulnerable for closure,” the state’s Rural Health Transformation Fund project narrative stated.

Doctors and advocates seeing the looming threat to rural health facilities feared for emergency and daily care of course, but the impact on an already fading number of maternity wards could also mean hard times for rural communities.

But only a small part of the funding states receive from the rural health fund – no more than 15% — can be used for direct payments to facilities like hospitals and clinics, according to an analysis by the Robert Wood Johnson Foundation.

The rules for how the money can be used “could substantially limit how states are able to allocate awarded funding,” the foundation analysis stated.

Plus, the fund is meant to offset funding cuts to rural health, but it doesn’t match the rate at which the country’s rural hospitals and clinics are losing funding because of the federal budget bill.

“The fund doesn’t offset the cuts (to Medicaid funding and rural communities),” the foundation stated. “$50 billion (nationwide) for rural health is modest compared to the $137 billion in cuts to rural communities and nearly $1 trillion in Medicaid funding cuts.