New Funds Could Help Revive Struggling Alabama Rural Hospitals

A number of rural hospitals have been forced to close in Alabama, including the Pickens County Medical Center in Carrollton. According to the Alabama Hospitals Assocation, another 16 hospitals in the state are currently on life support. Thats has forced numerous patients to drive long distance for hospital care.

The Rural Health Transformation Program could bring millions to Alabama and other states struggling with rural healthcare. The $50 billion program could bring $500 million for rural healthcare in Alabama over the next five years.

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In a written statement, Gov. Kay Ivey said she wants to ensure rural Alabamians have long-term and sustainable access to quality healthcare services.

“We put together a committee of healthcare providers and some legislators to come up with a plan," she said. "All the rural areas that have a hospital will be involved."

Ivey did not state whether any of the funds could be used to assist in reopening any hospitals that are already shuttered.

The Trump Administration's 'Big Beautiful Bill' is expected to reduce federal Medicaid spending in rural areas by $155 billion over 10 years. In addition to the direct effects on Medicaid beneficiaries, these changes could have ripple effects for rural hospitals, affecting other rural healthcare consumers.

The Bipartisan Policy Center on their website says, "The program allocates $10 billion per year across all the states starting in FY 2026 through FY 2030. 50% of those payments will be distributed equally across states with approved applications, while the remaining half will be distributed by the Centers for Medicare & Medicaid Services Administrator, Dr. Mehmet Oz, based on a state’s rural population and need.

In an online summary of the RHTP program, the National Rural Health Association describes the program as funding states to cover a wide range of activities, including:

• Payments to health care providers
• Recruitment and workforce training
• Purchasing new technologies
• Supporting access to opioid use disorder treatment and mental health services
• Promoting evidence-based interventions to improve preventive care and chronic disease management

“Our rural hospitals are critical for the survival of our rural patients and our urban patients,” said Ryan Kelly, executive director of the Alabama Rural Health Association in a press release. “Our urban hospitals do not want our rural hospitals to die off, to fail.”