Iowa has been awarded $216 million in federal funding for the second year of its Healthy Hometowns initiative, a program designed to improve healthcare access and services in rural communities.
The funding comes from the Centers for Medicare and Medicaid Services (CMS) through the Rural Health Transformation Program, established under federal legislation passed in 2025.
The federal program provides $50 billion in grants to states over five years to support rural healthcare improvements.
Iowa received $209 million during the program’s first year, bringing the state’s total funding for the first two years to approximately $425 million.
According to the Iowa Department of Health and Human Services, second-year funding will continue supporting cancer screening and treatment, electronic health record improvements, rural healthcare facilities, and expanded emergency medical services.
Additional investments will focus on mobile healthcare services, workforce development, and partnerships that allow healthcare providers to share facilities and coordinate patient care.
Iowa HHS Principal Deputy Director Larry Johnson said the second year will focus on continuing existing projects and strengthening healthcare services in rural communities.
The program comes as federal Medicaid spending is projected to decline under the 2025 legislation. According to Congressional Budget Office estimates cited by KFF, the law is expected to reduce federal Medicaid spending by approximately $911 billion over ten years.
The Rural Health Transformation Program is distributing $10 billion nationwide for fiscal year 2027. Iowa ranks 11th among states in funding awarded.
CMS Administrator Dr. Mehmet Oz said the funding is intended to help states improve healthcare access, quality, and long-term sustainability in rural communities.
