Ohio Rural Hospitals Eye State Control of $50 Billion Federal Aid, But Funds Are a “Temporary Solution”

Columbus, OH – August 5, 2025 – A newly formed task force representing Ohio’s rural, autonomous hospitals is pushing for the state legislature to directly oversee the distribution of a $50 billion federal aid package aimed at bolstering financially vulnerable healthcare facilities. The effort comes as concerns mount that the funds,while welcome,represent only a partial offset to projected revenue losses stemming from changes to Medicaid within the same federal legislation.

The aid, secured through a recent spending bill, is intended to support rural hospitals facing financial strain. These hospitals often serve as critical economic anchors in their communities, providing not only healthcare but also significant local employment.Ohio House Speaker Matt Huffman (R-Lima) has voiced strong support for prioritizing these institutions,stating they are “anchors” for both healthcare access and economic stability. He believes the state legislature is best positioned to determine how the funds are allocated.

“The legislature should be the state that heads the process of deciding who gets the federal funds and how they’re spent,” Huffman told The Dispatch.

While Governor Mike DeWine’s office has acknowledged the funding, a spokesperson indicated it is indeed “much to early” to comment on the specifics of its distribution.

The push for legislative control comes amidst existing efforts by the Ohio Hospital Association (OHA) to advise state officials on fund allocation. The OHA committee includes representatives from larger, urban-based health systems that also operate rural locations. However, the rural hospital task force, led by Patricia Normington-Slay, argues that the OHA’s broad representation may not adequately prioritize the needs of the most financially precarious independent rural hospitals.

“We’re willing to work with OHA, but the association represents the whole of the state’s hospitals, not the rural, independent hospitals that need funding the most,” Normington-Slay explained.

John Palmer, a spokesperson for the OHA, affirmed the association’s commitment to providing feedback and collaborating with the rural task force, emphasizing the shared goal of directing funds to communities in need.

The Broader Context: Rural Hospital Challenges and Federal Aid

The debate over fund distribution highlights the ongoing financial challenges facing rural hospitals nationwide. These facilities are disproportionately impacted by a higher percentage of Medicare and Medicaid patients, which often results in lower reimbursement rates compared to private insurance.

The $50 billion in federal aid, while considerable, is not a complete solution. A recent analysis by KFF Health News,citing Congressional Budget Office (CBO) reports,reveals the funds cover only 37% of the revenue losses projected due to Medicaid changes included in the same legislation that authorized the aid. The CBO estimates approximately 10 million Americans could lose health insurance coverage by 2034 as a result of these Medicaid modifications.

This situation underscores the precarious financial position of many rural hospitals,forcing them to rely on temporary funding solutions while seeking long-term sustainability.Normington-Slay acknowledged the aid’s limitations, stating, “The [funds] are not the long-term answer, but the funds used will be to help us develop that long-term sustainability strategy.”

The coming months will be crucial as Ohio policymakers determine how to best deploy these federal resources to ensure the continued viability of its rural healthcare network. The outcome will likely have significant implications for access to care and economic stability in communities across the state.

Samantha Hendrickson covers medical business and healthcare for The Dispatch and can be reached at shendrickson@dispatch.com.