Mississippi awarded $205M for second year of federal rural health program

Mississippi will receive nearly $205 million for the second year of a national program that aims to improve rural healthcare, federal officials announced Monday. 

The state’s total award for the 2027 fiscal year is about $1.2 million less than its first-year award announced last December for the five-year Rural Health Transformation Program, though its amount exceeded the award made to the average state. 

Awards were made to all 50 states as part of the $50 billion federal investment in rural healthcare. Like last year, Texas and Alaska received the largest shares of funding, while Connecticut and New Jersey received the smallest amounts. 

“Rural Americans have life expectancies three years shorter than their urban peers, but President Trump’s Rural Health Transformation Program is funding the historic investments necessary to close that gap,” said Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz. “States have already put these resources to work bringing better care closer to home for their rural communities, and CMS looks forward to helping them build on that progress in the coming year.”

The $50 billion funding program was tacked on to President Donald Trump’s tax-and-spending law passed in July 2025, which is expected to result in significant reductions in federal Medicaid spending in rural areas. Congressional Republicans added the money for rural health to soften the blow associated with those cuts. 

Rural areas are expected to face an estimated $137 billion in cuts to federal Medicaid spending over 10 years, meaning Rural Health Transformation Program funds will offset roughly a third of those cuts, according to analysis from KFF. 

Changes to federal Medicaid payment rules are expected to reduce net payments to Mississippi providers by about $100 million annually beginning in July 2028, according to the Mississippi Division of Medicaid’s strategic plan published in July.

Half of the $50 billion Rural Health Transformation Program funding is to be distributed evenly among all states with approved applications over five years. Awards for the other half of the funding are informed in part by states’ progress implementing their approved plans, according to CMS.

A federal annual report showed that Mississippi had committed over $94 million in program funding as of July 31, including assessments of the state’s rural healthcare and emergency medical services capacity, and grants for technology upgrades, telehealth and facility improvements. Over $10 million was obligated for program operations. 

Gov. Tate Reeves in October announced $32 million in grant awards for healthcare workforce development and psychiatric emergency services.

The state closed applications last week for a statewide health information exchange to allow health care providers to securely share patient information and coordinate care. A vendor has not yet been announced. 

The state is seeking applications for small rural providers to adopt or replace electronic health records, and for innovative pilot programs to improve healthcare.