Alliance Alert: The Alliance for Rights and Recovery welcomes recently approved federal funding for rural health and recognizes the opportunity it presents to strengthen access to services across New York’s rural and underserved communities. Investments in workforce development, technology, and collaborative models are critically needed, particularly for behavioral health services that have long faced staffing shortages, transportation barriers, and limited infrastructure outside of urban areas.
However, these funds do not come close to fully mitigating the significant loss of resources New York is facing as a result of recent Medicaid cuts and other federal policy changes enacted in 2025. Without additional state action, communities will continue to feel the strain as providers struggle to meet growing demand with fewer dollars and increased administrative burden.
New York State must step up its own investments in community-based mental health and substance use services to support more people and blunt the harmful impacts of federal retrenchment. The Alliance will also be pushing the state to ensure that Medicaid work requirements and redetermination processes are streamlined, transparent, and humane, with the explicit goal of keeping as many eligible New Yorkers as possible enrolled in the health coverage they need.
We will continue to closely monitor implementation of these funds and advocate to ensure that New York prioritizes access, equity, and recovery-oriented services for communities across the state.
New York Awarded $212 Million from Federal Rural Health Fund
By Katelyn Cordero | Politico | December 29, 2025
ALBANY, New York — New York is set to receive $212 million from the federal Rural Health Transformation Program, the Centers for Medicare and Medicaid Services announced Monday.
New York’s award was the 12th highest among all 50 states. New Jersey received the lowest award — roughly $147 million. The largest allocation, $281 million, was given to Texas, followed by Alaska at $272 million.
New York requested $200 million for 2026 from the $50 billion program that was included in President Donald Trump’s One Big Beautiful Bill Act, enacted in July. Half of the fund was divided equally among all states that applied. The other half was distributed at the discretion of CMS officials.
“Thanks to Congress establishing this investment and President Trump for his leadership, states are stepping forward with bold, creative plans to expand rural access, strengthen their workforces, modernize care, and support the communities that keep our nation running,” CMS Administrator Mehmet Oz said in a statement. “CMS is proud to partner with every state to turn their ideas into lasting improvements for rural families.”
Context: New York submitted its application before the early November deadline, requesting $200 million for each of the next five years. The state highlighted four key priorities in its application: strengthening technology infrastructure, creating a sustainable health care workforce, improving access to primary care services and establishing collaborative models for improving community health.
Details of the application were shared with POLITICO by the state Health Department; however, requests for a copy of the submission were denied by the health agency and CMS.
The state did not immediately respond to a request for comment on the award.
Background: In drafting the state’s application, New York Health Department officials gathered input from health care industry stakeholders in September. Many who submitted ideas to the state told POLITICO they would like to see it focus on workforce shortages, transportation deficiencies, and bolstering technology infrastructure.
The $50 billion will be stretched out over five years from 2026 through 2030. That means the amount New York ultimately receives will likely depend in part on whether the state implements policies pushed by the Trump administration, such as barring low-income people from using food aid to purchase “non-nutritious foods,” mandates for schools to reestablish the Presidential Fitness Test and requiring doctors to take continuing education classes on nutrition.
What’s next: The use of the funds will be closely monitored by CMS officials dedicated to each state, the federal agency said. States will be required to submit regular updates and can lean on CMS officials for guidance and technical assistance.
States can’t appeal their award if they received less money than expected. Oz said in September that the government reserves the right to claw back the funding if states don’t use it as the administration deems appropriate.
CMS also announced that it plans to use the program to promote collaboration between states. Health officials will take part in an annual CMS Rural Health Summit, where they will be able to share lessons learned and effective models they’ve used.