Oregon will receive more than $197 million to invest in rural health care projects in 2026, federal health officials announced shortly before the new year.
It’s slightly less than the $200 million the Oregon Health Authority requested from the new Rural Health Transformation Program run by the federal Centers for Medicare and Medicaid Services. And it’s significantly less than the average $400 million per year that Oregon’s rural communities are expected to lose in federal health care funding during the next decade under changes to Medicaid eligibility congressional Republicans passed last summer.
“While this much-needed boost can’t make up for the substantial federal funding cuts we anticipate in the coming years, OHA is committed to using this opportunity to support as many promising and sustainable rural health solutions as possible,” the state health agency’s policy and analytics director, Clare Pierce-Wrobel, said in a statement.
Congressional Republicans included the $50 billion Rural Health Transformation Program in a July megalaw that’s slated to cut Medicaid spending by nearly $1 trillion over the next decade to partially offset tax cuts.
Rural communities across the U.S. are expected to lose about $137 billion in Medicaid funding during the next decade, including more than $4 billion in rural Oregon, according to an analysis of Medicaid data by the nonprofit KFF.
Oregon’s application for funding had bipartisan support, though Democratic lawmakers criticized the Rural Health Transformation Program as a “bandaid for a bullet hole,” according to statements from U.S. Sen. Jeff Merkley and U.S. Rep. Andrea Salinas. U.S. Rep. Maxine Dexter, also an Oregon Democrat, said it was “like throwing someone a life jacket after sinking their ship.”
Oregon’s appeal
State health officials requested $200 million per year for five years, for about $1 billion total from the $50 billion program through 2031. Given that their first year award is less than expected, the agency will scale down its original proposal to fit its given budget, officials said in a news release.
The state will distribute money to local governments and organizations for projects that provide preventative care to more people, boost the number of health care workers in rural communities and improve technology and data infrastructure in rural hospitals and clinics, according to the agency’s application materials.
About one-third of Oregonians live in rural communities, defined as living at least 10 from a population center of 40,000 or more. All but two of Oregon’s 36 counties have rural areas, and 10 Oregon counties are designated “frontier” counties with an average of six or fewer people per square mile.
Roughly $20 million of the award is slated to go to health care projects undertaken by the nine federally recognized tribes in Oregon.
Bipartisan-ish support
Oregon’s application received bipartisan support from the state’s Congressional delegation, though a letter from Democratic delegates struck a different tenor than one from the state’s lone Republican, U.S. Rep. Cliff Bentz. Bentz’s vast 2nd Congressional District in southern and eastern Oregon is predominantly rural and includes all 10 frontier counties.
In a Dec. 11 letter of support, Bentz thanked the Centers for Medicare and Medicaid Services and Administrator Mehmet Oz for their “unwavering commitment to strengthening America’s health care system.”
“I also want to recognize President Trump’s Administration and CMS for bringing real accountability and urgency back to rural health care,” Bentz continued. “Your leadership has given rural communities confidence that Washington is finally paying attention and acting.”
Bentz’s district is likely to be among the most impacted by Medicaid cuts. About 1 in 3 Oregonians relies on Medicaid for their health insurance, but the rate is higher in the 20 counties Bentz represents. In Malheur, Klamath, Josephine and Jefferson counties, more than 40% of residents rely on Medicaid, according to the Oregon Health Authority.
Democrats in their letter of support for Oregon’s application on Dec. 29 wrote that the funding is an attempt to make up for the harms of Republican cuts to the Medicaid program, and its disproportionate impact on rural communities.
“While the expected awards from the Rural Health Transformation Fund will not make up for catastrophic Medicaid cuts Trumpcare is implementing, we believe that Oregonians deserve their fair share of this funding,” they wrote.
Koray Rosati, a spokesperson for Rep. Janelle Bynum, a Democrat representing the state’s 5th congressional district, said Bynum signed on because the congresswoman wants to protect rural hospitals and healthcare, but that the funding is a bandaid for health care cuts rural communities will experience in the next decade.
“Let’s be clear here, the reason this funding is needed at all is because Rep. Bentz and President Trump, who Rep. Bentz fawns over in his letter, made massive cuts to rural healthcare and jacked up healthcare costs for Oregonians with their ‘trash bill,’ H.R. 1.,” Rosati said in an email. “They sold our rural communities out and now they want credit for offering pennies in return. Rep. Bynum isn’t falling for that.”
Oregon Capital Chronicle
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