Connecticut officials are hoping the state is allotted a piece of a $50 billion federal grant to improve health care and access in rural parts of the state.
Rural hospitals and health clinics across the U.S. are facing an especially fraught time amid reports of closures, fears of impending Medicaid cuts and financial instability. And they face unique challenges when it comes to access and affordability.
Some of those same barriers exist in the rural pockets of Connecticut, whether it’s around the ability of a patient to physically get to an appointment or more specialized services or workforce shortages around things like primary care.
The Rural Health Transformation Program fund was added in President Donald Trump’s “big beautiful bill” amid growing concerns around Medicaid cuts in the same legislation.
Connecticut state agencies are sourcing ideas that range from workforce development, IT infrastructure, innovation and access to care that are even more burdensome for rural regions compared to their more urban counterparts.
Community health centers and hospitals across Connecticut are cautiously optimistic about the federal funding, which is overseen by the Centers for Medicare and Medicaid Services. That funding stream comes at an uncertain time for many of these clinics and hospitals as they brace for major health care shakeups in the coming years.
“The fact that there is a grant that came out to help support rural health providers is a large step in the right direction as we continue to face these challenges ahead of us, layered on top of a rural geography where we have some additional unique challenges, just by the nature of where we provide services,” said Joanne Borduas, the CEO of the Community Health & Wellness Center of Greater Torrington.
Officials at the Connecticut Department of Social Services and the Office of Policy and Management are taking the lead on the grant application and working with several other state agencies. They’ve been speaking with other health officials about the application, and a public comment period runs until Oct. 3.
But officials didn’t have time to dither. The process opened in mid-September, and applications are due by Nov. 5. Awards will be decided by the end of the year, and states will start to see that funding in early 2026.
Connecticut’s priorities center around “interventions with long-term benefits” for rural residents and “long-term scalability and financial sustainability,” meaning once the federal funding dries up after 2030, the programs should be able to continue. They hope whatever funding approval they get will have longevity and not need to rely on additional resources from either the federal government or the state.
Half of the $50 billion grant will be evenly divided between the states. If Connecticut’s application is approved, the state would get $500 million over five years.
The other $25 billion will be based on the sole discretion of CMS and will take into account the rural makeup of states plus other factors “the administrator determines appropriate.”
Some in Connecticut don’t feel as optimistic about getting anything from that pot of money because the state is less rural than those in the Midwest, but they still hope the creativity of their application helps boost their chances for additional funding beyond the anticipated $500 million.
“We look different than Wyoming, so the solution in the Northeast is going to be different,” Paul Kidwell, senior vice president of policy at the Connecticut Hospital Association, said.
The program’s funding would cover only about a third of the expected cuts to federal Medicaid spending in rural communities, according to a KFF analysis. But the purpose of the grant isn’t meant to deal with holes in reimbursement rates for Medicaid.
“A couple of things that the transformation funds are not intended to do is offset voids of reimbursement for services that are already being reimbursed under either federal or commercial payments. But the focus of the application really needs to resolve around some central themes,” said Kyle Kramer, CEO of Day Kimball Health. For Connecticut, he sees priorities like access to care and workforce development.
But much of the funding that Connecticut could receive would come before Medicaid reforms are fully implemented, and it’s unclear how much it would actually cushion the blow of steep cuts. New work requirements and changes to the provider tax, which help states maximize federal Medicaid grants, won’t go into effect until 2028 at the earliest — and possibly a couple of years later.
Overall, the nonpartisan Congressional Budget Office, which analyzes and scores federal legislation, estimates that the “big beautiful bill” would lead to a reduction of nearly $1 trillion over the course of a decade in federal Medicaid spending. For those in rural areas, Medicaid spending could drop by $155 billion over that same period.
That’s on top of the additional changes to health insurance and expiring enhanced premium subsidies for those enrolled in commercial plans through the state’s marketplace, Access Health CT.
But the Trump administration believes the new program will ultimately help rural communities improve access to care, even if they have adequate insurance.
“This program’s major focus is to deal with the folks who are most vulnerable in rural America, because for them, having insurance isn’t the big challenge, usually. It’s getting access to care,” CMS Administrator Mehmet Oz said on a call with reporters last week. “You might have perfectly good health insurance if you’re a retired vet, but you can’t get mental health care practitioners where you live.”
Rural hospitals
Rural hospitals are already struggling throughout the country, and Connecticut is no exception.
Day Kimball Hospital in Putnam, in the northeast corner of the state, is an independently owned community hospital and has had its share of financial challenges. The state-owned University of Connecticut Health Center is exploring the purchase of three hospitals in the state including Day Kimball.
“Our area is truly rural and geographically distant from other facilities, and that remoteness is compounded by the fact that while there may be some hospitals a little bit north of us that are closer, it’s complicated by the fact that you’ve got a state border which doesn’t necessarily allow all of your population to get there,” said Kramer of Day Kimball.
Medicaid reimbursement rates have been particular stressors for many of them. Kramer said they lose about 40 cents on the dollar to provide care for patients on Medicaid.
Kramer said he’d like to address the issue of scarcity, particularly among primary care physicians, with not as many licensed professionals moving to rural regions.
“Creating mechanisms for getting more primary care into rural regions is an important aspect of health maintenance, largely because the earlier we’re able to get people into seeing a primary care physician, the more likely we are to identify potential for longer term health risk, and we’re able to manage against that so that potentially we avoid disease progression to the point where it becomes hyper-acute,” Kramer said.
And with shortages and recruitment issues similar to those in many other industries, health care officials are thinking about ways they can entice more physicians and medical school graduates to rural facilities for longer stays. Some of those options include programs that would bring those in medical residencies or fellowships into rural areas.
Kramer said many students are going to medical school and other training programs that largely exist in urban areas, making them more likely to stay in the area where they practice.
With cutbacks to Medicaid likely in the near future, hospitals could become overloaded. Rural providers see many government-insured individuals. If some of those patients fall off the rolls, hospitals expect to treat more people who are uninsured as a direct result of the “big beautiful bill,” also known as H.R. 1.
“I think it’s reasonable to say, then, some of the dollars created in H.R. 1 to support health care delivery in rural America and the network of providers that requires should go to hospitals. I think we have the expertise to do it, but we’re also going to be feeling the ultimate effects of the policy,” Kidwell of CT Hospital Association said.
Community health centers
Federally qualified health centers have also gone through their fair share of turmoil in recent months. They were affected by the freeze of federal funds and, even when those were restored, they still faced some temporary delays to be able to draw down their funds and access reimbursements.
These clinics are similarly anticipating what Medicaid cuts will mean for them, especially since 58% of patients across all health centers in the state get their coverage through the government health program.
The Community Health & Wellness Center of Greater Torrington serves about 7,000 patients — about 52% of whom are on Medicaid — at their three locations in Torrington, Winsted and North Canaan. (They also have school-based health centers.)
Borduas, the CEO of those community health centers, participated in a recent call with DSS and other agencies to discuss ideas and input on the federal grant. Most community health center CEOs and the Community Health Center Association of Connecticut were also on the call.
She wants to see improvements in infrastructure, technology and broadband to help with virtual appointments like telehealth and e-consults, which allow specialists to connect virtually with primary care physicians and patients without needing to see them in person.
But to pull off those services, Borduas said, the right infrastructure needs to be in place.
Like the hospitals, the federally qualified health centers want to find other ways for workforce development amid growing fears of primary care provider shortages. Borduas said she floated a few ways to incentivize providing care in rural areas.
“I had mentioned things like tax credits or loan repayments or something that incentivizes them to say, ‘Yes, I want to go to this very far northwest corner, which is beautiful but doesn’t really have a lot to offer,'” Borduas said.
How rural may be defined
The federal program is branded as a rural health grant but is left open to interpretation and doesn’t explicitly define how states should interpret a region as rural. Kimball of the CT Hospital Association said there’s a need for a “whole state approach” given that Connecticut already has a lot of partnerships in health care.
Kramer said that while the area around Day Kimball is unequivocally rural, it doesn’t mean that people in the area aren’t seeking medical attention in more populated areas of Connecticut where there are partnerships.
“Just because we are definitively rural doesn’t mean that somewhere like a New Haven or a Hartford wouldn’t be the beneficiary of some of these funds, because on a tertiary level, they are a lot of the work that it is associated with advanced care for people who live in rural areas, because we don’t have the capability of doing everything within our organization, nor do some of the other true rural hospitals within the state,” he said.
It’s still unclear, however, how much those grants can be stretched beyond rural regions.
“Some of that discussion is that it’s very clear that this grant is meant for rural [areas], but is there a way to say we have a larger health partner somewhere in the middle of the state that is maybe more urban but can help put processes in place to help support the rural health centers?” Borduas said. “There’s no quite clear answer on that.”
But long-term viability is at the top of the list for Connecticut officials. They want to ensure that whatever the grant supports can continue beyond the five-year window.
“This is going to take some work to make it sustainable beyond those five years … because it will involve work with our local municipalities,” Borduas said. “We can’t do something sustainable if we don’t have support from other means, especially with the continued concerns about changes that are coming at the federal level.”
The Connecticut Mirror/Connecticut Public Radio federal policy reporter position is made possible, in part, by funding from the Robert and Margaret Patricelli Family Foundation.
This story was originally published by the Connecticut Mirror.
