This story was originally published by CalMatters. Sign up for their newsletters.
The Trump administration announced a $233.6 million investment in California rural health just five days before the midterm election that could determine control of Congress.
But state officials say the money isn’t new.
“Currently, California has not received additional funding from the Centers for Medicare & Medicaid Services,” said Andrew DiLuccia, a spokesperson for the Department of Health Care Access and Information.
Instead, the $233.6 million is California’s share of a $50 billion national federal rural health investment approved in 2025. The state applied nearly a year ago, seeking $1 billion to improve primary, maternity and specialty care throughout the state, and received notice of the award in August.
The announcement highlighted parts of the state, including the north state, Central Valley and Orange County, where Republican incumbents have faced tough questions from constituents about dramatic federal healthcare cuts passed by Republicans last year. Voter-approved redistricting also thrust a handful of conservatives into competitive races with Democrats.
“Today’s investment was made possible through the Working Families Tax Cuts Act — passed by Republicans in Congress and unanimously opposed by Democrats — delivering a historic $50 billion investment to help states transform the way healthcare is delivered in America,” the news release said.
The Working Families Tax Cuts Act is the name Republicans now use for the One Big Beautiful Bill Act, the tax and spending law that President Donald Trump signed in 2025. The legislation will cut $900 billion from Medicaid over the next 10 years through stricter eligibility requirements and lower payments to states.
California stands to lose $30 billion a year for its Medi-Cal program, which provides health insurance to low-income residents and people with disabilities. State officials and independent researchers estimate 2 million Californians will lose health coverage as a result, doubling the state’s uninsured rate.
The rural health fund grew out of a compromise with Republicans in rural states such as Maine and Missouri, who worried that Medicaid cuts would hurt rural hospitals hardest. Rural hospitals serve a higher share of low-income payers and rely more heavily on Medicaid payments than hospitals in wealthier or urban areas that have more privately insured patients.
California’s rural hospitals were already struggling. Madera Community Hospital abruptly closed in 2023 and declared bankruptcy before reopening in 2025 under new management. Last year Glenn Medical Center, Glenn County’s only hospital, closed after losing a special designation that increased federal funding. State lawmakers have also twice bailed out more than a dozen struggling hospitals in the past three years, including a $25 million investment earlier this year. A third $85.5 million hospital bailout is scheduled for later this year.
CalMatters reporting also revealed that nearly 60 hospitals have stopped delivering babies since 2012 largely due to financial challenges and population decline in rural areas.
Several Republicans seeking reelection have asserted that the “One Big Beautiful Bill Act” did not cut Medicaid.
Rep. Kevin Kiley, a former Republican turned Independent from Roseville, and Rep. David Valadao, a Republican from Hanford who represents the district with the highest percentage of Medicaid enrollees in the country, both argue that Medicaid spending still increases over time. That increase is due largely to the growing underlying cost of healthcare and the federal government’s mandate to pay for qualified enrollees’ care.
Democratic opponents argue eliminating people from Medicaid amounts to a cut.
One Republican, Rep. James Gallagher, who took over Rep. Doug LaMalfa’s seat after his death in January, told North State Public Radio in May he opposed the Medicaid cuts but also disagreed with California expanding coverage to immigrants without legal status.
Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.
