North Carolina -- The RHTP was created as part of H.R. 1, a federal bill signed into law by President Trump in July 2025. While the bill includes sweeping cuts to federal health care spending, a major concern for states like North Carolina, the RHTP is intended to provide a temporary, five-year funding lifeline to rural health care systems.
A Growing Crisis for North Carolina’s Rural Communities
The need for this funding is especially urgent in North Carolina, which has the second-largest rural population in the country, behind only Texas. People in these rural areas face a compounding crisis: they have higher rates of chronic disease, less access to care, and their communities have been hit particularly hard by hospital closures. In fact, North Carolina has the highest rate of rural hospital closures behind only Texas and Tennessee.
These closures and health disparities are expected to worsen as federal Medicaid funding is reduced by billions of dollars over the next decade due to H.R. 1. Rural hospitals and providers are highly dependent on these funds to operate, and the state's Medicaid expansion program is also at risk due to a "trigger law" that would end the expansion if federal funding rates are reduced.
How the Program Works
The RHTP is a direct response to this crisis. It provides a total of $50 billion over five years to states that submit an approved plan. The program's funding is divided into two tiers:
Tier 1: The first $25 billion of the program will be distributed equally among all 50 states with an approved application. This means North Carolina would receive approximately $100 million per year for five years.
Tier 2: The remaining $25 billion will be distributed at the discretion of the Centers for Medicare and Medicaid Services (CMS). This allocation will be based on a state's rural population, the number of rural health facilities, and the financial status of its hospitals.
The NCDHHS must submit a single application to CMS by December 31, 2025, outlining how it will use the funds to improve access to care, enhance technology, and strengthen the rural health workforce. NCDHHS is currently seeking feedback from the public and partner organizations to help shape its plan.
The RHTP funding, while substantial, is not expected to fully replace the long-term funding North Carolina would lose from the Medicaid cuts in H.R. 1. However, state officials are eager to secure the funds to mitigate the immediate impact and provide some stability for the state’s rural health care providers.
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