Rural communities are getting a huge boost in federal funding to support healthcare infrastructure. The Rural Health Transformation (RHT) Program, authorized in the Working Families Tax Cuts (also known as the One Big Beautiful Bill Act), is awarding states with funds to support innovation, access, and workforce development to improve health care in rural areas. In 2026, $50 billion will be allocated to the states, and $10 billion will be available each fiscal year afterwards until 2030. The amount each state will receive was announced before the new year, ranging from $147,250,806 (NJ) to $281,319,361 (TX).
It is good that we are able to make this investment to improve rural health. About 20% of Americans live in rural areas and, in general, experience worse health outcomes compared to urban areas. Rural residents are more likely to have multiple health conditions and to suffer from heart attack, stroke, and cancer. They have severe physician shortages that continue to worsen. Over 100 rural hospitals have closed in the last decade, and 756 are at risk of closing due to financial hardship. Hopefully, this funding boost will go a long way in expanding access and improving outcomes for rural communities.
However, as with all federal funding, we must be conscious that money alone is not enough to solve structural issues. Especially as this program is only funded for the next five years, states must take measures to ensure rural healthcare infrastructure is more self-sustainable. There are government barriers that limit healthcare accessibility that could make a big difference if removed.
For example, 36 states and Washington, D.C, still have Certificate of Need (CON) laws. CON laws require medical facilities to get state approval in order to open or expand. This was initially designed to control the cost of health care and ensure that facilities were opening in rural areas, but it has proven to do the exact opposite. A study by the Mercatus Center found that states with CON laws had 30% fewer hospitals per 100,000 residents and 13% fewer ambulatory surgical centers in rural areas compared to non-CON states. Similarly, a 2024 study found that ambulatory surgical centers increased by 92% to 112% in rural areas after they were exempted from CON laws.
When the supply of healthcare facilities is restricted, it leads to higher costs because patients have fewer choices to receive care. States with CON laws have been found to spend 20.6% more per capita and to have 10% higher variable costs in general acute hospitals. Repealing CON laws have also shown to decrease costs by 4% after five years. These higher costs particularly hurt rural communities, which tend to have higher poverty rates than urban areas, and fewer options to access care that might be more affordable.
Since 2021, 23 states and Washington, D.C., have at least reformed their CON laws to expand exemptions or loosen requirements that make it easier for healthcare facilities to open in their states. While this is good progress, full repeal of CON laws should be the goal, as there is little incentive to keep them in place for any kind of facility.
Another policy reform that can go a long way for rural communities is provider scope-of-practice (SOP) laws. Healthcare providers often require a state license to practice, which can artificially limit what that provider can do. This creates an unnecessary barrier to primary care, especially when 92% of rural counties are designated as Primary Care Health Professional Shortage Areas, compared to 83% of non-rural counties. Providers like advanced practitioners and pharmacists have the training to fill many primary care needs.
Ninety percent of the U.S. population lives within five miles of a pharmacy, making it one of the most accessible primary care providers and a huge support for rural residents who otherwise have to travel long distances to see their doctor. Pharmacists already provide care such as vaccines and glucose monitoring, and are capable of more if their state allows it. For example, North Dakota expanded pharmacist SOP to prescribe medication under a collaborative practice agreement and provide more testing for bone mass and density, hormones, cholesterol, and triglycerides. California has also created a pathway for an advanced pharmacy license, which allows them “independent authority to initiate, adjust, and modify drug therapy”.
Advanced practitioners are also a critical part of a healthcare team with the ability to assess and diagnose patients, order tests, and prescribe medications. These include roles such as nurse practitioners, which are known to increase access and lower costs, and their numbers have increased by 25% in rural areas. However, they are required to practice under the supervision of a doctor, and it can be difficult to find one willing to take on that responsibility. To remove this barrier, 28 states have granted them full practice authority to ensure they can provide primary care.
Ultimately, telehealth plays a crucial role in supporting healthcare access for rural communities. It has greatly expanded since the pandemic, but there are restrictions on it that undermine the goal of accessibility. The Cicero Institute highlights that many states do not allow doctors to practice virtually across state lines, limit the kinds of providers who can use telehealth, or restrict certain types of virtual communication, such as remote patient monitoring. Arizona, Colorado, Delaware, and Utah have the best laws for telehealth innovation, according to the Cicerno Institute’s analysis.
While the Rural Health Transformation Program is a meaningful commitment to improving rural health care, true success will be determined by the changes made during this limited funding window. Policy reforms that remove barriers to access, competition, and innovation can help ensure that this money will lead to lasting improvements rather than temporary relief. States should seize this opportunity to create a healthcare system for rural communities that will be sustained long beyond the extra funding boost.