Oklahoma lawmakers say a $223 million federal investment expected in 2026 could reshape how health care is delivered in rural Oklahoma, even as the state faces tighter budgets and rising insurance costs ahead of the next legislative session.
The funding was discussed during a recent episode of Your Vote Counts on News 9 with host Scott Mitchell, state Sen. Paul Rosino, R-Oklahoma City, and former state lawmaker Jason Dunnington.
Lawmakers said the funding is part of a federal rural health care initiative intended to offset reductions made elsewhere in the Medicaid budget following last fall’s congressional budget negotiations.
Federal funding tied to Medicaid reductions
Dunnington said the $223 million allocation is one-time funding scheduled for 2026.
“It’s just money for 2026,” Dunnington said. “The money isn’t supposed to just necessarily go to hospitals, but it’s to go to initiatives, outside-the-box thinking, so that we can figure out how to better take care of people in the future.”
Lawmakers said the funding is expected to support new care models focused on long-term access and outcomes, rather than traditional hospital-only spending.
Distribution plan still developing
Rosino said the Oklahoma State Department of Health will oversee the distribution process, with advisory committees and stakeholder groups already involved in early planning.
He said the focus will be on addressing provider shortages and access gaps that disproportionately affect rural communities.
“We are seeing that rural Oklahoma, just like rural parts of the country, are challenged to get good providers and good health care,” Rosino said.
Insurance costs remain a concern
The discussion also turned to rising insurance costs, including health, auto and homeowners coverage.
Dunnington said unresolved federal subsidy issues and rising premiums are squeezing Oklahoma families and could become a significant political issue.
“You cannot keep raising rates and giving people less benefit,” Dunnington said. “It’s not sustainable.”
Dunnington cited recent legal developments allowing the Oklahoma Attorney General to participate in a State Farm insurance case as a positive step for consumers.
Watch part 2 of Your Vote Counts in the player below:
State budget outlook
Lawmakers also previewed challenges heading into the 2026 state budget.
Rosino said the Oklahoma Board of Equalization is projecting about $12 billion in available revenue for fiscal year 2026, nearly $700 million less than the previous year. He attributed the decline largely to recent tax cuts and the elimination of several income tax brackets.
With state agencies requesting nearly $1.5 billion in additional funding, lawmakers said difficult budget decisions are likely.
Agencies asked to prioritize
Rosino said lawmakers are already asking agencies to narrow their funding requests and focus on critical services, particularly in health and human services.
Some agencies, including the Department of Mental Health and Substance Abuse Services, are expected to seek supplemental funding early in the session.
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