Washington submits $1 billion plan for federal rural health-care funding

Washington state has sent in its application for $1 billion in rural health care investments.

Gov. Bob Ferguson announced the submission Wednesday for the federal Rural Health Transformation Program. The state’s proposal, he said, was a bipartisan one and would span five years with $200 million annually.

Ferguson said via a news release that the rural parts of the state feature stunning landscapes, robust agriculture and strong communities.

“In order to sustain this way of life, we must support a strong rural health care system,” he said. “Our bipartisan plan will help modernize and strengthen this crucial resource.”

Of Washington’s 39 counties, 29 – which are home to more than 1 million residents – aredeemed rural.

The controversial Rural Health Transformation Program was established under the so-called One Big Beautiful Bill Act, or H.R. 1, the far-reaching federal tax and spending legislation signed by President Donald Trump on July 4.

The program will offer $50 billion for rural health care to approved states over five years. That leaves $10 billion available annually from fiscal years 2026 through 2030.

Nov. 5 was the deadline for states to apply.

Half of the money will be equally divided among approved states, per the Centers for Medicare and Medicaid Services (CMS). CMS will allocate the other half based on factors including a state’s proportion of rural health facilities, its rural population, “the situation of certain hospitals in the state” and more.

Democrats, including Ferguson, have largely lashed out at H.R. 1, accusing Trump and congressional Republicans of hurling a grenade at the health care system. They have warned that many Washingtonians will lose their health care as a result. The new law makes sweeping Medicaid cuts, which critics have warned will likely jeopardize or shutter many rural hospitals nationwide and in Washington state.

To counter that claim, Republicans have pointed to the $50 billion Rural Health Transformation Program as a way to offset such reductions.

But health experts fear that the program will not be nearly enough to make up for Medicaid losses. KFF, a nonpartisan health policy research group, expects federal Medicaid spending in rural areas to drop by $155 billion over a decade.

WA’s application for Rural Health Transformation Program

Washington state’s $1 billion investment plan for the Rural Health Transformation Program, led by the state’s Health Care Authority (HCA), includes hospital-infrastructure support. New facilities, maternal health care and technology improvements are also emphasized. And 10% of any awarded funding is committed to backing Native American health care providers serving non-Native and Native patients in rural areas.

Health Care Director Ryan Moran said in the news release that nearly 300 stakeholders helped inform the plan, along with legislative and tribal engagement. Washington’s plan was backed by bipartisan legislative leaders.

“We’re looking forward to the opportunity this creates to advance health outcomes and strengthen care in rural Washington,” Moran said.

Evan Klein, HCA’s special assistant for legislative and policy affairs, spoke about the program Wednesday morning at a Joint Select Committee on Health Care and Behavioral Health Oversight work session.

Klein noted that the goal of the application was to identify significant need in the state – and to align that need with CMS’s guidance guardrails to ensure that the maximum federal rural hospital funding reaches Washington.

Ferguson’s office says he is working on setting up a meeting with Dr. Mehmet Oz, CMS’s administrator, after the federal government shutdown prompted the cancellation of a prior scheduled meeting.

Applications will be accepted or denied by CMS by the end of the year.

In a letter addressed to Oz, Ferguson said the state’s proposal would primarily invest in hospitals. Washington has suggested infusing $302 million into hospital infrastructure over five years.

WSHA said in an emailed statement that it supports the application’s goals.

“We believe program spending should focus on care delivery in rural regions, and the state’s proposal aligns with that vision,” WSHA added. “As the application process moves ahead we look forward to working with state and federal partners to strengthen rural hospitals across Washington.”