Changes incoming following Alabama's new rural health transformation program

Governor Kay Ivey approved the $203,404,327 in funding for Alabama’s first year of the Rural Health Transformation Program (RHTP) after receiving the state’s official award number from the Centers for Medicare and Medicaid Services on Dec. 29, 2025.  

The Alabama Department of Economic and Community Affairs (ADECA) will be administering the federal funds for the five-year program, which seeks to improve the quality and accessibility of rural health care across the state.  

“We are very pleased Alabama will be awarded more than $203 million in the first year of the Rural Health Transformation Program,” said Governor Ivey in a press release. “After President Trump signed the One Big Beautiful Bill Act into law in July, Alabama got to work preparing for this program so we could hit the ground running once our state’s new comprehensive rural health strategy was approved.” 

The One Big Beautiful Bill Act slashed nearly $1 billion in Medicaid funds. According to the KFF, a leading U.S. health policy organization, rural Americans are more likely to rely on Medicaid and rural hospitals, like the 52 across Alabama, often rely on Medicaid reimbursements to stay open.  

The Rural Health Transformation Program was built into the One Big Beautiful Bill Act to address the effects of the Medicaid cuts. According to PBS, “the $50 billion Congress set aside for the Rural Health Transformation Program covers less than a third of the funding rural communities are expected to lose in Medicaid cuts.”  

To take part in the Rural Health Transformation Program and receive a portion of the $50 billion set aside, states had to write their own detailed plans for how they would use the funds within their own programs. Ever since the One Big Beautiful Bill Act was signed, Governor Ivey’s administration has been hard at work planning how to best support Alabama’s rural residents and health providers through potential funds from RHTP.  

In December 2025, Governor Ivey signed an executive order establishing an RHTP advisory group to develop policies and advise on implementation as soon as the program was approved. The program also contains 11 initiatives, including but not limited to a Rural Workforce Initiative, Cancer Digital Regionalization Initiative and Simulation Training Initiative, designed to allocate the given federal funds as effectively as possible across the state.  

“It is encouraging to see Governor Ivey and her staff focusing on the root of the problems that are affecting Alabama’s smaller communities who are in most need,” Hattie Massey, a freshman nutrition major from Trussville said. “Addressing medical needs, education and nutrition allows all citizens of Alabama to have equal quality and access for healthcare and resources.” 

The state has not yet allocated funds to rural hospitals such as the Troy Regional Medical Center, but residents and healthcare professionals are hopeful and looking forward to their local hospitals receiving funding.  

“This program and any program that brings money and attention to the rural counties of Alabama and helps to improve the Healthcare system and access, especially to rural counties, is wonderful,” said Jacque Chirico, the nurse practitioner at the Troy University Student Health Center. 

Rural communities like the ones in Pike County will soon see the effects of the One Big Beautiful Bill Act’s cuts to Medicaid, but the Alabama Rural Health Transformation Program will hopefully soften the blow.