by Jake Goldstein-Street, Washington State Standard
November 5, 2025
Washington is making its bid for a billion dollars in new federal funding for rural health care.
The so-called “big, beautiful bill” that congressional Republicans approved in July included a total of $50 billion for the Rural Health Transformation Program. The money is meant to offset some of the expected damage to rural hospitals from the law’s steep cuts to Medicaid.
In Washington’s rural areas, federal spending from Medicaid, the health insurance program for low-income Americans, is set to drop over $4 billion in the next decade, according to an analysis by nonpartisan health research group KFF. Over one million Washingtonians live in rural communities.
Adults in non-metro counties in Washington have higher rates of hypertension, diabetes, cardiovascular disease and chronic obstructive pulmonary disease, according to the state’s application for the federal funding filed Monday and made public Wednesday.
Half of the $50 billion will be evenly distributed to all states with approved applications for funding.
The other half of the money will be doled out based on states’ number of rural residents and health facilities, and how well aligned each state is with the Trump administration’s “Make America Healthy Again” policies, among other criteria. These policies include reestablishing the Presidential Fitness Test and restricting how federal food stamp benefits can be spent.
Washington’s ask for a total of $1 billion over the next five years includes $302 million for hospital infrastructure, Gov. Bob Ferguson noted in a letter to Centers for Medicare and Medicaid Services Administrator Mehmet Oz.
The state is unlikely to receive that full funding given “the way the application scoring process works,” Evan Klein, of the state Health Care Authority, told lawmakers Wednesday.
Other objectives include investing in new technologies, strengthening the rural health workforce, improving health care in tribal communities, building more community-based care and expanding the rural behavioral health system.
“Rural Washington boasts strong communities, robust agriculture, and some of the most beautiful landscapes in the world,” wrote Ferguson, a Democrat. “In order to sustain this way of life, we must support a strong rural health care system.”
Ferguson notes the plan has bipartisan support from state legislative leaders.
The Centers for Medicare and Medicaid Services has made clear the money should go toward developing long-term solutions for rural health care, not just temporary cash infusions for struggling hospitals.
How Washington would use the money
Washington lists a half-dozen overarching goals for the money it’s seeking.
One is to enable rural hospitals to invest in new technology and sustain maternal, obstetrics and other services. The state hopes the money will ensure no more rural hospitals close their obstetrics units. Twenty-five rural hospitals in Washington don’t have labor and delivery units.
Another is to use about $25 million per year to build programs to provide care in community-based settings, expand dementia resources, and add long-term care training. Just one in five long-term care workers in Washington serve rural counties, according to the state’s application.
The third objective is to set aside money for investing in improved health outcomes for tribal communities, including through community workforce development.
In his letter, Ferguson said this issue came up at the Centennial Accords meeting in October, with tribal leaders specifically mentioning maternal care as a key need. Ten percent of the rural health funding would be earmarked for tribes and Indian Health Care Providers, Ferguson wrote.
The state also wants to provide funding for emerging and proven technologies, including artificial intelligence, that could improve remote health care services, among other goals. In a survey this year from the Washington State Hospital Association, over 80% of rural providers reported not having enough money to invest in technology upgrades.
About $4 million per year would help expand Project ECHO at the University of Washington, a mentorship initiative for clinicians in underserved communities.
In addition, the state wants to strengthen the rural health workforce, especially the ranks of nurses, primary care doctors, maternity care providers, dental hygienists and long-term care workers. Some funding would go to Washington State University’s rural practitioner training programs, for example.
Among the 157 family medicine residents across Washington who graduated last year, fewer than one in 10 are practicing in rural communities, according to the application.
Another goal is expanding services to treat addiction and mental health issues through workforce development, as well as increasing mobile crisis support and school-based services.
A study this year found Washington’s rural communities face waits for many mental health services, and demand for mobile crisis services exceeds capacity. Drug overdose rates in rural Washington are higher than the statewide average.
The state received over 300 comments from stakeholders to guide its application.
In September, U.S. Reps. Dan Newhouse, R-Sunnyside, and Michael Baumgartner, R-Spokane, along with other Republicans from Democratic-led states, urged federal health officials to ensure the new funding goes to rural providers, instead of being diverted to urban areas.
The Trump administration is expected to announce awards by the end of the year. The deadline for states’ applications was Wednesday. The agency will distribute $10 billion each year for the next five years. Changes to how much each state receives can be made each year.
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