Wyoming Plans to Make $205M Rural Health Grant Last Forever

Wyoming just found a way to turn a five-year windfall into forever funding for struggling rural hospitals and health workers.

The state will receive $205 million in the first year of a new federal rural health program. Instead of spending it all quickly, Wyoming plans to invest 80% of the money and use only the annual returns, creating a fund that could generate $28.5 million every year indefinitely.

"Rather than spend out now, we would have this available to help fund us over a longer time period," said Patrick Hardigan, dean of the College of Health Sciences at the University of Wyoming.

The money would support scholarships for health students and provide payments to keep small hospitals and rural ambulance services running. For qualifying hospitals, the assistance could cover up to 10% of their annual operating costs.

Wyoming needs creative solutions. As the least populous state with about 588,000 residents, it faces the same crisis hitting rural America everywhere. Since 2010, 152 rural hospitals nationwide have closed completely or stopped offering inpatient services.

The federal Rural Health Transformation Program was created to help offset cuts to Medicaid that could hurt rural communities even more. States received their funding assignments in late December and must spend it by fall 2032.

But there's a catch. Federal rules say states must actually spend the money, not save it. Wyoming officials argue that depositing funds into the perpetuity account counts as spending them.

Stefan Johansson, director of Wyoming's health department, told lawmakers he believes federal officials have approved the plan after asking specific questions about it in December. Federal regulations typically prohibit using grant money to fund endowments or investment vehicles designed to generate income.

Wyoming's application says the fund won't make or keep any profit. All investment returns will go directly to rural health programs.

The Ripple Effect

If federal officials give the green light, Wyoming's approach could inspire other states to think differently about sustaining rural healthcare. Kevin Bennett, director of the South Carolina Center for Rural and Primary Healthcare, called it "a wild idea" that could be "really an interesting way to keep things going."

The state legislature is already reviewing a bill to create the fund. The state treasurer's office would invest the money in stocks and other equities, targeting a 4% annual return.

Wyoming won't know for certain until March 1, when federal reviewers finish approving revised state budgets and plans.