“This is transformative.” Alaska awarded $272M to address healthcare

For Alaskans needing healthcare, there are major hurdles to overcome, including massive geographic barriers, workforce shortages, and a limited infrastructure.

To address the hurdles, Congress has established the Federal Rural Health Transformation Program (RHTP) is a new $50 billion, five-year initiative (2026-2030) to modernize rural healthcare and support sustainable rural health solutions.

On December 29, the State of Alaska received word that it had been awarded $272 million award from the Centers for Medicare & Medicaid Services (CMS) to strengthen Alaska’s health care system, the first of five annual awards for Alaska under the five-year RHTP. It was the second-highest amount awarded, with only Texas receiving more funding.

To welcome the news, Governor Mike Dunleavy, Senator Dan Sullivan, Representative Nick Begich, and Alaska Department of Health Commissioner Heidi Hedberg held a joint press conference in Anchorage.

“This is going to be transformative,” said Commissioner Hedberg. “We are really excited to receive notice of the funding award.” She said that Alaska’s current healthcare system is “fragmented,” often difficult to navigate for patients, and frustrating for providers, and that with the help of the RHTP, it is going to transform how Alaskans access healthcare, especially closer to home.

“This is fantastic news for Alaska,” said Governor Dunleavy. He commended the Department of Health for putting together a strong application for funding, noting that only Texas received a larger award.

“This is going to enable to significant improvements to life and safety in rural Alaska. It totally transforms our healthcare system,” he said. “Alaska is a very unique state in terms of its size, the complexity. Rural is Alaska; Alaska is rural, so this fits really well with what we need to do.”

There are several needs within the current Alaskan healthcare systems that are expected to be addressed with the RHTP. Because of Alaska’s geography, the vast distance from the lower 48, lack of roads, the sometimes harsh weather, timely access to care can be incredibly difficult. Innovative solutions and developing technology like telemedicine and mobile units are needed, especially in rural facilities with outdated technology in need of upgrades, better data sharing, and cybersecurity to deliver efficient, modern care. The RHTP is built to help states expand telehealth, remote monitoring, and digital health tools. It also supports innovative, flexible, and community-centered care delivery.

“Our approach to healthcare delivery has always required a different way of thinking. When communities are separated by hundreds of miles with no road system, extreme weather is a constant factor…limited infrastructure presents its challenges. Doing things the usual way here in Alaska is simply not an option. That’s why the Federal Rural Health Transformation Program is such a crucial investment for the people of Alaska,” said Representative Begich. He said this critical investment in healthcare should not be overlooked. “This funding is a historic investment that will have lasting impacts on families in Alaska.”

Rural hospitals and clinics also face immense financial pressure and difficulty attracting and keeping skilled healthcare provider, and RHTP offers a vital pathway to stabilize these essential access points and address worker shortages with recruitment and retention incentives and training for providers and community health workers.

“This is the biggest investment in rural health care in American history, and certainly the largest investment in Alaska’s health care system from the federal government in our state’s history,” said Sen. Sullivan. “The $272 million per year that Alaska will receive for five years—nearly $1.4 billion from the federal government—is a generational opportunity to transform our health care system. It gives our communities, state officials, and the Legislature the opportunity and freedom to design a health care system that reflects Alaska’s unique needs. This is the opposite of the one-size-fits-all approach we too often see from Washington, DC. This funding will help keep care closer to home, reduce the need for costly and disruptive travel, strengthen rural clinics, and stabilize our health care workforce.”

Administered by the CMS, the RHTP funds will flow through the state's Department of Health, managing funds for statewide transformation, with funds allocated evenly; half competitively based on rural need, and quality of state plans. The funding will focus on specific areas of technology, workforce, innovative care, and chronic disease and Substance Use Disorder prevention. There will also be a focus on boosting workforce, tech, prevention, and innovative care models in rural areas, with Alaska's plan focusing on access, and community wellness, aiming to address unique challenges like vast distances.

The next step will be a multi-day convening event January 14-16, designed to help health care and community organizations secure RHTP funding and plan for the future of Alaska’s health systems.

For more information about the RHTP and the upcoming convening dates, please visit www.health.alaska.gov/en/education/rural-health-transformation-program/