State officials and local hospitals are thrilled to be getting a large financial bounty from the federal government, hoping it will help stabilize rural health care in New Hampshire.
That enthusiasm, however, is tempered by cautious optimism amid drastic cuts in Medicaid and the threat of rural hospital closures and dwindling operating margins.
The U.S. Centers for Medicare and Medicaid Services (CMS) announced Jan. 5 that it will award New Hampshire over $204 million for 2026 as part of its federal Rural Health Transformation Program, a $50 billion, five-year initiative that is part of the so-called One Big Beautiful Bill Act signed during the summer.
The money announced this week comes on top of the $500 million each of the 50 states will receive over five years, also as part of the $50 billion allocation.
New Hampshire’s portion is the largest among the New England states and is slightly more than the $200 million that the state had requested. Maine and Massachusetts will receive $190 million and $162 million, respectively. New Jersey will get the lowest amount in the country at $147.3 million and the highest will go to Texas at $281.3 million.
“We are very pleased to see New Hampshire is going to be receiving $204 million to strengthen health care,” said Steve Ahnen, president of the N.H. Hospital Association, which represents the state’s 31 acute care and specialty hospitals.
But, he added, the new money will not compensate for the estimated $3 billion to $3.5 billion cut in Medicaid funding the state will face over the next decade under the same law, as well as potential revenue losses stemming from a significant increase in the number of uninsured people that is expected after the expiration of Affordable Care Act premium tax credits. The Medicaid cuts start in 2028.
“We have some significant challenges ahead of us,” Ahnen said. “Can we use these dollars to stem some of those headwinds? It’s not a replacement of those funds we will lose, but $204 million is a significant investment that we should take advantage of.”
‘Beginning of a bold effort’
The federal money comes at a time when health policy analysts and think tanks have said that about 30 percent of rural hospitals in the U.S. are at risk of closing, including at least four hospitals in New Hampshire, due to high costs and poor reimbursements for services.
However, those hospitals, including Cheshire Medical Center in Keene and Concord Hospital-Laconia, said they are safeguarded by the fact that they are affiliated with larger entities such as Dartmouth Health System and Concord Hospital Health System, which can help mitigate their financial losses.
Ahnen said the state’s 13 rural hospitals are often the sole source of emergency care, primary care and behavioral health services for large geographic areas in the state, but face persistent workforce shortages, rising health care costs and growing demand for care.
Non-rural hospitals in the state are also squeezed by low government reimbursements and insurance payment delays, and Ahnen said that all of New Hampshire’s hospitals stand to benefit from the new funding.
“New Hampshire is a very rural state,” he said. “There’s opportunities to invest these dollars to help all hospitals. The tremendous focus on rural hospitals is appropriate. We are going to work to ensure that the health care system functions together. The last thing we want to do is create silos.”
Gov. Kelly Ayotte’s office, which submitted an application to CMS in November, said it received input from more than 300 stakeholders, including rural hospitals and mental health centers before submitting the application.
The state hopes to allocate money to improve health care access, improve workforce shortages and boost the use of technology, such as telehealth services and use of artificial intelligence. It is not clear exactly how the state will disburse the money and whether it will be given directly to hospitals, clinics and other entities, such as high schools and colleges that may participate in strengthening rural health care.
Ayotte has created an office known as GO-NORTH — the Governor’s Office of New Opportunities and Rural Transformational Health — to help plan and implement its ambitious initiatives. The office will also monitor and assess how the money is being spent once it’s been distributed.
“This is the beginning of a bold effort to expand access to affordable, high-quality care closer to home for Granite Staters in rural communities,” Ayotte said.
The new funding does not require states to use the money solely for rural hospitals and caps the amount of money that can be spent on hospitals and other providers at 15 percent.
The funding also contains some controversial requirements, including that the money cannot be spent on gender-affirming care or reimbursement for most abortion services, according to KFF, formerly known as Kaiser Family Foundation, a research organization. KFF reported that the funding also places limitations related to citizenship documentation requirements.
“Many hospitals do not currently collect patient immigration status, but may need to do so to be reimbursed for patient care with rural health funds,” KFF said in one of its reports assessing the rural health fund.
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