Makenzie Huber/South Dakota Searchlight
South Dakota received about $11 million less than what it requested from a new federal rural health fund, and the amount is smaller than the awards for surrounding states.
“These resources will help us modernize rural health care, support the workforce that delivers it, and ensure that all South Dakotans have access to quality care – no matter where they live,” South Dakota Gov. Larry Rhoden said in a news release.
The Centers for Medicare and Medicaid announced Monday that all 50 states received funding from the $50 billion Rural Health Transformation Program. Congress included it in the One Big Beautiful Bill Act, in response to concerns that the bill’s Medicaid cuts will hurt rural health providers. Medicaid is a federal-state program that provides health insurance for people with disabilities or low incomes.
Half of the new program’s funding is predicated on the number of rural residents and rural health facilities in a state, as well as the state’s spending plans and policies, among other factors. The federal agency announced award amounts for 2026. Award amounts can change each year.
South Dakota requested $200 million a year, or $1 billion over five years. The state received about $189 million for 2026.
Some states, including Nebraska, Montana and Iowa, received more funding than requested.
According to the health policy research group KFF, federal Medicaid spending in rural areas in South Dakota over the next decade will decrease by a projected $487 million, due largely to new work requirements in the One Big Beautiful Bill Act that will cause some people to lose coverage.
A key component of South Dakota’s application to the rural health fund was a $500 million health infrastructure modernization proposal, which would include creation of a “South Dakota Health Data Atlas.” It would allow health care systems throughout the state to access health data in one “single, accessible platform.” The atlas would address telecommunications needs, equipment, emergency preparedness and cybersecurity concerns.
Other proposals ranged from $3.5 million to support the growth of community health workers in the state to $125 million to fund sustainability grants for South Dakota health care providers.
Josie Harms, spokeswoman for Gov. Rhoden, did not address South Dakota Searchlight questions about the gap between funding requested and awarded, or what impact that will have on programming.
Harms said the award is a “major win” for rural health care in the state, despite it being less than requested.