The CMS Administrator makes two statements in this short video that are not correct:
“The rural health transformation fund is a 50% increased investment over what we currently spend for Medicaid in these rural healthcare systems.”
“Their [people in rural areas] life expectancy is about nine years shorter than those in more urban parts of the country.”
Rural areas and small towns need assistance with health care affordability, quality and accessibility. The Rural Health Transformation Fund, despite its origin as a political maneuver to enable passage of the 2025 federal budget reconciliation law (HR1), means substantial help for rural areas and small towns. Many of the ideas states have put forward so far using RHTF funding to improve rural health care are good ones. We’ve been watching the implementation of the fund and hoping that politics can stay out of the strong bipartisan support for RHTF-driven rural health improvement.
However, in the video above CMS Administrator Dr. Oz makes two troubling claims that point to the more political nature of the RHTF. Neither claim is correct and both go beyond the usual hyperbole expected from any political appointee.
First, as to the claim that the RHTF means a 50% increased investment in Medicaid over what we currently spend, this statement simply ignores the billions of dollars in cuts to Medicaid made by the same law that created the RHTF.
According to analysis by the Kaiser Family foundation, overall the changes to Medicaid in the 2025 federal budget reconciliation law (HR1) that also created the Rural Health Transformation Fund will result in a projected decline of $127 billion in federal Medicaid spending in rural areas over ten years. The total of the Rural Health Transformation Fund in the same law is $50 billion. Assuming all of the fund is distributed to the states, this is still overall only about 37% of the projected rural Medicaid spending cuts.
In addition, the RHTF is distributed in a way that means low-population states end up getting more of the fund since half of the fifty billion total is split evenly among the 50 states. For example, this analysis shows that although Texas has about thirty times as many rural residents as New Jersey, Texas is only receiving about twice as much funding from the RHTF compared to New Jersey.
So, whether overall or state-by-state, claiming that the RHTF means a 50% increase in Medicaid’s investment in rural areas is simply not correct.
Second, the CMS Administrator’s claim that people in rural areas have about a nine-year shorter life expectancy than those in urban areas is also not correct. While there is certainly a difference in life expectancy between rural and urban areas driven by multiple factors including wealth, race and health access, years of research shows the difference in life expectancy is about 2-3 years. See also summaries from the Rural Health Information Hub, supported by the US Department of Health and Human Services and the latest research on the topic published in the Journal of Rural Health in 2024.. Any rural/urban life expectancy difference should be unacceptable to a wealthy country like the United States, but overdramatizing the difference won’t help close the gap.
There is strong bipartisan support for improving health systems in rural areas. However, making incorrect claims that ignore the large cuts to Medicaid made by the same legislation that created the RHTF and overdramatizing the health differences between rural and urban America only serve to create more division rather than focus on solving our rural health problems.