Colorado will receive a little more than $200 million in federal funding next year to improve health care in rural areas, the U.S. Department of Health and Human Services announced Monday.
The money comes from a fund created in this year’s One Big Beautiful Bill Act, the spending and tax bill supported by Republicans and signed by President Donald Trump. The bill set up a competition among states for a share of $50 billion to be distributed over five years to boost rural health care.
“This new funding will help us strengthen our rural health care system by supporting providers and increasing access to care for everyone in our rural communities,” Gov. Jared Polis said in a statement.
Added Kim Bimestefer, the executive director of the Colorado Department of Health Care Policy and Financing: “Our shared efforts will drive game-changing improvements across rural care access, innovation, affordability and health outcomes across rural Colorado for generations to come.”
The money announced Monday is just for 2026, and Colorado expects to receive additional funding through 2030.Colorado’s award for 2026 places it middle of the pack nationally, but it is also higher than what Colorado officials had been daring to hope for.
“That would be — wow,” Bimestefer said in a webinar this month, talking about the possibility of Colorado receiving $200 million from the fund. “We should all do cartwheels.”
Wide range of projects to be funded
The state plans to use the money for a wide range of projects, including bolstering the rural health care workforce, helping rural health providers with technology upgrades, tackling chronic disease and other initiatives. Information on how rural health care providers can apply for the funding will be rolled out next year.
While the money will help, it is not expected to outweigh the negative impact of Medicaid cuts that were also part of the GOP bill.
All 50 states will receive money from the program next year, HHS announced Monday. But how much money each state will receive was determined partly by a competitive process that has been half-jokingly described as the rural health “Hunger Games.”
These are the rules of the game: Half the money each year — so, $5 billion — is distributed evenly across all states with a qualifying application. Every state applied, and all those applications met minimum standards, so this means Colorado was guaranteed at least $100 million per year.
The second half of the money is distributed based on a competition among states in two areas: first, how much of a rural health crisis the state is facing and, second, how innovative the state’s proposals are to address it.
Federal authorities did not release a breakdown of how they arrived at each state’s funding amount.
Colorado’s award of $200,105,604 for the 2026 fiscal year ranks 26th nationally. Texas is set to receive the most funding, more than $280 million, followed by Alaska and California. New Jersey will receive the lowest amount, about $147 million, just below Connecticut and Rhode Island.
Concerns from hospitals
HHS notes that Colorado’s application focused on “overcoming geographic and systematic barriers to rural health care.”
But, after the application was submitted, the Colorado Hospital Association wrote a letter to state lawmakers expressing concerns about how the state plans to tackle those issues.
“Not only were Colorado’s rural hospitals’ recommendations disregarded, but proposals were advanced that they actively oppose and believe will harm the communities they serve,” Jeff Tieman, the association’s president and CEO, wrote in the letter, dated Dec. 16.
Tieman specifically cited plans to promote regional collaboratives among rural hospitals to create greater efficiency and sustainability. Tieman said that could require some rural hospitals “to discontinue key service lines and direct patients to a single designated facility within the region.”
Colorado’s application also ties into an existing initiative called the Colorado Hospital Transformation Program that seeks to pay hospitals more for providing higher-quality care. Tieman called the program flawed.
Tieman told lawmakers they must intervene “to restore transparency, uphold accountability, and ensure that rural stakeholders have a formal and substantive role in shaping how these significant public dollars are deployed.”
Other health care providers expressed more support for the state’s approach. A news release from the Department of Health Care Policy and Financing included a statement from Kay Whitley, the president and CEO of Spanish Peaks Regional Health Center in Walsenburg, alongside comments from Polis and Bimestefer.
“These funds will allow us to strengthen the care we provide to our rural community by sustaining essential services and expanding access where it’s needed most,” Whitley said. “This investment helps us continue to meet the evolving needs of our neighbors and improve health outcomes for the communities we serve.”