Maine applies for federal rural health funding to offset expected Medicaid cuts

Maine submitted its application Thursday to the federal government’s new $50 billion Rural Health Transformation Program, a fund designed to offset some of the impacts of upcoming Medicaid cutbacks.

The Republican budget bill passed in July reduced Medicaid funding for rural health by $137 billion nationwide over 10 years, according to KFF, a national health policy think tank. The Rural Health Transformation Program will help mitigate some of those losses by distributing $50 billion starting in 2026 over a five-year period. The Medicaid funding cuts, however, will begin in 2027.

U.S. Sen. Susan Collins (R-Maine) championed the inclusion of the rural health fund in the reconciliation bill. Despite her support for the fund, she ultimately voted against the bill due to the substantial Medicaid cutbacks it contained. The bill passed in July by a margin of just one vote.

Maine stands to lose $5 billion in Medicaid funding across urban, suburban, and rural areas as a result of these cuts. However, the state could receive more than $500 million over five years from the new rural health fund.

The state’s rural hospitals are currently in a precarious financial position. The Center for Healthcare Quality and Payment Reform, a national think tank, has projected that half of Maine’s 24 rural hospitals are at risk of closing in the near future.

With the new federal funds, Maine plans to invest in several key initiatives, including workforce development, technology improvements, expansion of telehealth services, transportation, and support for rural hospitals.

“Maine is taking bold steps to expand access to health care through innovative technology to improve the health of Maine people and by investing in rural health care providers and workers,” Gov. Janet Mills said in a written statement on Thursday.

Steven Michaud, president of the Maine Hospital Association, also praised the application, calling it a “balanced, thoughtful approach to transforming health care” featuring “collaborative and innovative projects.”

This story will be updated as more information becomes available.
https://www.pressherald.com/2025/11/06/maine-applies-for-federal-rural-health-funding-to-offset-expected-medicaid-cuts/

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