Texas will receive $282 million in the second year of Rural Health Transformation Program funding, again the largest total award of any state, yet it will once more receive the lowest amount per rural resident, according to a Nov. 13 KFF analysis.
That award works out to about $70 per rural resident, according to the report. New Jersey, by contrast, is receiving the smallest second-year award at $142 million, or about $1,030 per rural resident. Texas has about 30 times as many rural residents as New Jersey, 4.3 million versus about 140,000, but is receiving only about twice as much funding.
CMS announced $10 billion in fiscal 2027 awards to all 50 states Nov. 9. The average award is $200 million per state.
Per-resident funding continues to vary widely across states, according to the report. Rhode Island will receive about $6,390 per rural resident, the highest in the nation. Twelve states will receive less than $100 per rural resident, while eight will receive more than $500.
The pattern held from the first year of funding. In its January analysis of first-year awards, KFF found 10 states below $100 per rural resident and eight above $500. Texas received about $66 per rural resident in year one, and Rhode Island received $6,305.
The disparity stems in part from how the $50 billion program is structured. By law, half of the funding is split equally, so every state gets $100 million a year regardless of need. Only a quarter of the total fund, $12.5 billion, is distributed based on measures of state need. CMS calculated those measures once and will use them for the life of the program. Just 5% of the overall fund is tied to rural population size. The remaining quarter is based on state initiatives, state policy and other factors, and it can change from year to year.
Because so much of the fund is locked in, every state’s second-year award landed within 4% of its first-year award, according to the report. Alaska and Montana have the fifth- and 15th-smallest rural populations, yet they are receiving the second- and third-largest awards. KFF attributed that in part to a portion of the fund being distributed to the five largest states by land area.
It remains unclear how states will spend the money, KFF said. States’ first quarterly reports, which detail obligations to direct recipients, are due Nov. 29. The same details for second-year awards won’t be available until late 2027. CMS has said it will release state progress reports upon request but does not plan to publish them proactively, according to the report.
