Nearly two dozen rural Oregon hospitals in 17 counties will receive more than $37 million to strengthen and stabilize their maternity care services in the next few years following recent federal cuts to Medicaid.
The funding comes from a one-time state investment of $25 million and at least $12.5 million in matching federal funds from the Centers for Medicare and Medicaid Services, which the Oregon Health Authority announced it had secured late last week. Gov. Tina Kotek directed Oregon lawmakers to approve the state’s one-time rural maternal care investment during the 2025 legislative session, and the Oregon Health Authority applied for matching federal dollars.
“I fought for these funds in my budget to stabilize services in Oregon because rural communities deserve reliable, high quality maternity care close to home,” Kotek said in a statement. “The Trump administration’s cuts to Medicaid will make rural maternity care harder to sustain and I applaud the work by the (Oregon Health Authority) to maximize state dollars to support Oregon providers.”
Roughly half of all births in Oregon are covered by the Oregon Health Plan, the state’s Medicaid program. But rural hospitals in particular are navigating severe financial strain after President Donald Trump and Congressional Republicans in July 2025 signed a tax and spending cut law that dramatically reduced Medicaid spending on hospitals. Kotek’s office estimates the law leaves the Oregon Health Plan with $11 billion less than expected through 2031.
Oregon Health Authority Director Sejal Hathi said in a statement that rural hospitals, which serve a high proportion of Medicaid patients in the state, are under ‘tremendous pressure.”
“OHA worked hard to secure this funding because rural families and communities cannot wait as healthcare costs rise and labor and delivery units close,” she said.
The 21 rural hospitals that qualify for the funding, such as Blue Mountain Hospital in Grant County, Grande Ronde Hospital in Union County and Saint Alphonsus Medical Center in Malheur County — where more than half of all residents rely on Medicaid — can use the money to hire and retain maternity care staff, upgrade or purchase clinical equipment, expand outreach, and offer more perinatal support.
Oregon Capital Chronicle
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