Vermont will receive nearly $190 million next year from the federal Rural Health Transformation Program, a five-year initiative tucked into the “One Big Beautiful Bill,” the sweeping tax and policy package President Donald Trump signed into law in 2025.
This latest award is only slightly less than the $195 million Vermont was awarded in the program’s first year. That money has already been doled out to a dizzying array of initiatives statewide, including healthcare workforce incentives, technology upgrades, consulting contracts and bolstered primary care programming.
Gov. Phil Scott visited Gifford Medical Center in Randolph on Thursday to tout the federal program’s investments in Vermont. The critical access hospital and health clinic will receive about $3.5 million from the program’s first wave of funding, the Republican governor said in a press conference.
“Gifford will be able to modernize its facilities, use technology to streamline administrative work, give providers more time with patients and support mentorship programs to help strengthen our healthcare workforce,” he said.
At Gifford, rural health funding will pay for AI scribe technology, simulation training technology, and the Maple Mountain Residency Program, which will train early-career doctors in rural settings.
“If you want a doctor to practice in a small town, train them in a small town,” Gifford CEO Michael Costa said.
State officials were not surprised this latest round of grants is slightly smaller than last year’s, according to Vermont Medicaid Director Jill Mazza Olson. Some of the federal cash is tied to state policy changes, and the Centers for Medicare and Medicaid Services had, in the program’s first year, mistakenly given Vermont credit for getting rid of its “certificate of need” process, which requires regulatory approval for new healthcare projects of a certain size.
In part thanks to funding minimums built into the program, Vermont is receiving one of the largest per-capita grants in the country. And if it continues to receive roughly the same amount for all five years of the program, that could ultimately add up to nearly $1 billion for healthcare in the state.
But Vermont could still lose more than it gains under the law.
The time-limited rural health dollars were added to the legislative package during end-stage negotiations, and widely seen as an effort to soften the blow, politically, for the cuts to Medicaid included in the One Big Beautiful Bill.
Vermont Health Care Advocate Mike Fisher said he understands why the Scott administration might want to celebrate the “tremendous amount of money” it will be able to distribute thanks to the rural health program. But he argues the money exists as little more than a diversion from upcoming changes to Medicaid.
“I don't think we should be distracted by that,” he said.
State analysts have calculated that up to 49,000 Vermonters could lose Medicaid under the new rules, most of which go into effect starting in 2027. KFF, which conducts health policy research, has previously estimated Vermont could lose between $1 billion and $2 billion over 10 years from changes to the public insurance program.
Democrats regained majorities in the U.S. House and Senate in the midterm elections last week, and have made clear rolling back cuts to Medicaid is a top priority when a new Congress is seated in Washington next year.
Asked Thursday about his concerns about the law’s overall impacts, particularly given changes to Medicaid, the governor speculated that the impending cuts to the public insurer could go away.
“I would offer that the climate may have changed in Washington,” Scott said Thursday. “There's a new Congress in town.”
Fisher said it’s hard to know what this new crop of lawmakers will be able to achieve once they’re in office. And he noted that some of the changes to Medicaid will come into effect at the very beginning of the new year.
“I think we have a pretty good idea of what's happening in January, despite any action that the new Congress might take, and I have real concerns about the Medicaid budget this year,” he said.
