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

The Republican budget bill passed in July reduced Medicaid funding for rural health by $137 billion over 10 years nationwide, according to KFF, a national health policy think tank. The $50 billion Rural Health Transformation Program will help mitigate some of these losses and will be distributed starting in 2026 over a five-year period. It is important to note that the Medicaid cutbacks are scheduled to begin in 2027.

U.S. Sen. Susan Collins, R-Maine, championed the inclusion of the rural health fund in the reconciliation bill. However, she ultimately voted against the bill due to the substantial Medicaid cutbacks it contained. The bill passed by a single vote in July.

Maine stands to lose $5 billion in Medicaid funding covering urban, suburban, and rural areas due to these cuts. In contrast, the state could receive more than $500 million over five years from the Rural Health Transformation Program.

The financial situation for Maine’s rural hospitals is particularly precarious. The Center for Healthcare Quality and Payment Reform, a national think tank, projects 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 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.sunjournal.com/2025/11/06/maine-applies-for-federal-rural-health-funding-to-offset-expected-medicaid-cuts/