Maine was awarded $190 million Monday in first-year funding under the Rural Health Transformation Program, a new pot of federal money designed to partially offset losses from upcoming Medicaid cuts.

No details on how the money would be distributed were immediately released, but the money can be used starting in 2026.

U.S. Sen. Susan Collins, R-Maine, said in a statement Monday that “the funding will help strengthen our rural hospitals and support innovative approaches that can lower costs and improve health outcomes for Mainers no matter where they live.”

The funding for Maine was part of a $50 billion initiative that Collins advocated for in this summer’s Republican budget bill to partially offset Medicaid cutbacks that are set to start in 2027. Collins and the rest of Maine’s congressional delegation, including independent Sen. Angus King and Democratic Reps. Chellie Pingree and Jared Golden, voted “no” on the bill, partly because of the Medicaid cutbacks.

The $190 million Maine will receive is from the first of five funding rounds. The state could receive at least $500 million over the five years that money is awarded from the program, according to state officials. However, Maine is expected to lose $5 billion in Medicaid funding across the state after the cuts start.

More details about how the awarded funds will be used will be announced later, as Maine is working with the U.S. Centers for Medicare and Medicaid Services to finalize the plan, said Jackie Farwell, deputy director of the Governor’s Office of Policy Innovation and the Future.

Maine’s application in November showed the state would use the rural health funds for a number of initiatives, including workforce development, technology improvements, expansion of telehealth, transportation, and help for rural hospitals. In the application, first-year funding also included $30 million to help rural health care providers offset losses from offering free care to those who are uninsured. Also, $5.9 million in transportation funding would start in 2026.

“Maine will use this funding for new investments in rural health care providers, workers, and technologies to improve the health of people across our state,” Gov. Janet Mills said in a statement Monday. 

Sara Gagne-Holmes, Maine Department of Health and Human Services commissioner, said in a statement Monday that the funding will help “expand access to care, strengthen the health care workforce, advance technology, improve the health of Maine people, and promote the long-term sustainability of rural health systems statewide.”

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

Northern Light Health closed Inland Hospital in Waterville in June, citing financial pressures, and the hospital system’s Waterville walk-in clinic also closed this year. Maine Family Planning closed three rural health care clinics in October after losing federal funding.

Steven Michaud, president of the Maine Hospital Association, told the Press Herald on Monday that, while details are still being worked on, the funding is welcome relief for rural health care.

“That is real money for a state the size of Maine, and if we all use it wisely and focus it in rural Maine it would have a very positive impact,” Michaud said.