Maine submitted its application Thursday to the federal government’s $50 billion rural health fund, a new program that will offset some of the impacts of upcoming cuts to Medicaid.

The Republican budget bill that passed in July reduced Medicaid funding for rural health by $137 billion over 10 years across the country, according to KFF, a national health policy think tank.

The $50 billion fund — called the Rural Health Transformation Program — will offset some of those losses and will be distributed, starting in 2026, over a five-year period. Medicaid cutbacks begin in 2027.

U.S. Sen. Susan Collins, R-Maine, championed the inclusion of the rural health fund in the reconciliation bill, although she ultimately voted against it because of the substantial Medicaid cutbacks. The bill passed by one vote in July.

All states can apply to the rural health fund, and the Trump administration is expected to announce funding awards by Dec. 31.

Maine stands to lose $5 billion in all Medicaid funding, including in urban, suburban and rural areas, resulting from the Medicaid cuts in the budget bill. But the state will receive at least $500 million, and possibly millions more, over five years from the rural health fund.

James Myall, a policy analyst with the Maine Center for Economic Policy, a progressive think tank, said the scale of the fund doesn’t come close to offsetting the cuts, and it adds bureaucracy.

“It’s a complicated way of backfilling the funding, adding several more steps to get less money,” Myall said.

While $25 billion of the $50 billion will be distributed to states based on a simple formula, Myall said it’s unclear what criteria the federal government will use to disburse the second half of the funding.

“Will the administration pick and choose based on something other than health care needs? We’re not sure,” Myall said.

The state’s rural hospitals are in a precarious financial position. The Center for Healthcare Quality and Payment Reform, a national think tank, has projected that half of Maine’s 24 rural hospitals are at risk of closing in the near future.

With the new federal funds, Maine would invest in a number of initiatives, including workforce development, technology improvements, expansion of telehealth, transportation, and help for rural hospitals.

“Maine is taking bold steps to expand access to health care through innovative technology to improve the health of Maine people and by investing in rural health care providers and workers,” Gov. Janet Mills said in a written statement on Thursday. Mills has been critical of Medicaid cuts included in the Big Beautiful Bill.

Steven Michaud, president of the Maine Hospital Association, said in a statement that the application is a “balanced, thoughtful approach to transforming health care” with “collaborative and innovative projects.”

Rebecca Boulos, executive director of the Maine Public Health Association, called the application an “important opportunity to improve health care access, quality and outcomes for people living in rural Maine.”