Trump dangles rural health dollars to push states to change hospital laws

October 19, 2026 / 5:00 AM EDT / KFF Health News

The Trump administration has hinged federal funding for states on whether they end or loosen powerful but controversial laws that regulate the construction of new hospitals — with a handful of states poised to comply.

A chunk of the $50 billion available to states through the five-year Rural Health Transformation Program is partly contingent on policy commitments. The administration told states it would score their applications higher if they walked back their certificate of need, or CON, laws, which give a state approval authority over the expansion or construction of any healthcare facility. Six states indicated plans to revisit their laws in their applications.

Certificate of need laws, which require that a healthcare provider prove a community need for a new service, were intended to curb monopolies and rising costs. But critics of the laws say they've instead raised healthcare prices, stalled needed facilities, and barred rural patients from new technology. More than 30 states, plus Washington, D.C., enforce some sort of certificate of need law, according to the National Conference of State Legislatures.

Legislators in several states have been pushing to end the laws, which have faced scrutiny…

Original source: https://www.cbsnews.com/healthwatch/