Though Wyoming only learned last week it will receive $205 million in federal rural health funds this year, the state doesn’t have a lot of time to idle over the money, Department of Health Director Stefan Johansson explained to lawmakers Tuesday.
That’s because Wyoming risks blowing an opportunity for $800 million in additional program funds if it does not fully spend the initial allotment, fails to implement the proposed policy actions in its application or goes rogue with other measures, according to the health department.
“The Trump administration has been very clear with us that anything outside of these approved purposes that are within our application risks clawback from the federal government,” Johansson told the Joint Appropriations Committee during a Tuesday budget hearing.
The health department needs legislative action to advance some of its rural health plans with steps like approving funding expenditures and drafting a bill that would create a permanent, investment-generated revenue fund.
So in a roundabout way, the federal funds are applying pressure on lawmakers to advance multiple initiatives aimed at supporting health care access in the state. And those include some measures that Wyoming’s small-government conservatives are wary of — like a state-run health insurance plan.
Committee Chairman Rep. John Bear of Gillette, who is a member of the Wyoming Freedom Caucus, criticized that insurance proposal in earlier talks. On Tuesday, he paid the department a barbed compliment.
“You all have done an excellent job of, I’m going to call it, twisting the arm of the federal government, to get this thing through,” he said. “Stuff that I think our staff and us were kind of surprised that you were able to get accomplished. So, well done in that regard.”
Regardless, lawmakers will move forward on related actions, Bear said.
“We certainly are taking this up as a matter of legislative action, so we’ll be working on this, and we’ll keep in touch with you to make sure we get it right,” he said.
Wyoming’s award
The Rural Health Transformation Program is a new federal initiative created by President Donald Trump’s One Big Beautiful Bill Act. The program will funnel $50 billion to states over five years to stabilize and strengthen rural hospitals and providers.
The application process for states unfolded rapidly. In Wyoming, Department of Health staff held stakeholder conferences and 11 public meetings starting in September to gather input. The state received 1,300 responses to an online survey it circulated. Staff prepared an 84-page application and submitted it by the Nov. 5 deadline.
The application proposed an array of initiatives to bolster health care. They include incentives for small rural hospitals to provide basic services and cut extraneous ones that can be performed at regional facilities; grants for clinical workforce training programs and five-year commitments from grads; a state-run insurance plan for catastrophic events; and permanent, investment-generated revenue to boost the industry.
Wyoming applied for an initial budget of $200 million. The Centers for Medicare and Medicaid Services announced Dec. 29 that all 50 states will receive awards in 2026 under the program. Wyoming got $5 million more than it requested and received the second-largest award per capita, behind Alaska.
Now, the work begins. In Wyoming, it will require drafting contracts, hiring staff, crafting bills and gaining legislative approval. On Tuesday, health department staff came before the appropriations committee with an outline of where they think money could be best spent and a draft bill to establish the perpetuity fund.
A path to sustainability
Even among health care advocates who view the federal program as a major opportunity for Wyoming, there has been concern about the temporary nature of the funds not being able to fix long-term problems here.
To address that issue, Wyoming proposed the establishment of the “Wyoming Health Transformation Perpetuity” — an actively managed investment account designed to generate long-term revenue.
“The state stands to receive over a billion dollars through this program,” Johansson said Tuesday. “That’s a lot of money, and that’s something we take seriously. And so what we hope you see designed into our application is a priority around how to sustain that.”
The perpetuity vehicle would allow the state to stretch the federal benefits into the future to meaningfully address some of Wyoming’s historically intractable health care challenges, Johansson said, such as hospital and EMS viability and workforce retention.
The bill draft would establish both the fund and rules for how the money is managed and used.
Johansson emphasized that this specific part of the proposal can unlock a great deal of potential.
“I know I sound like a used-car salesman here,” he told lawmakers, but “I think this could be truly transformative to some of the problems we have in our rural communities with health care. The idea is that we invest a smaller amount each year, so that over time, instead of five years of benefits, we’re going to accrue decades of benefits.”
There will also be some time-limited funds, Johansson said, which would be allocated to one-time grant programs related to technology adoption, integrated primary care and exercise and diet promotion.
The appropriations committee is scheduled to revisit the perpetuity bill during its Jan. 15 meeting.
BearCare
The proposal in Wyoming’s application that has drawn the most attention is the state-run public catastrophic insurance plan.
As proposed, the plan, dubbed “BearCare,” would cover health care emergencies, such as a car crash or a bear attack, for dues-paying members. The department has pitched it as low-premium, high-deductible coverage that could be useful for major health emergencies, but doesn’t cover typical care.
Gov. Mark Gordon lauded the proposal in his budget letter, calling it “an innovative, but basic, health benefit plan that offers individuals and small businesses a practical alternative to costly ObamaCare insurance.”
Appropriations lawmakers were skeptical the first time BearCare came up in a meeting in early December, and retained wariness Tuesday.
“We have the state stepping in and competing with private business on an unfair level,” said Rep. Ken Pendergraft, R-Sheridan. “And I’ve always been of the impression that it was the responsibility of the state to provide a level playing field so that anybody who wanted to build a business could build a business. So philosophically, I have a real problem right there.”
However, the plan also emerges as thousands of Wyomingites are facing huge spikes in health insurance costs with the expiration of Affordable Care Act tax subsidies.
The proposal is not designed to replace an Affordable Care Act Plan, Johansson said.
Instead, he said, “it’s an alternative, in a way, that is a very different type of product that says, ‘if you are choosing to go uninsured as an individual, here is something at a lower cost that would protect you against those larger financial issues.’”
The concept, he continued, “was intriguing enough to the federal government, to the Trump administration, to say, ‘hey, while all this is going on with these expiring ACA subsidies … here’s one state that’s at least considering an alternative to cover this.’”
He added that the BearCare proposal is a very small component of the state’s application and proposed budget — it would require about 1.4% of the overall allocation.
However, he said, lawmakers will have the final say.
“I’ll state unequivocally, we will not stand up that program without legislative authorization,” Johansson said.
This concrete $205,000,000 and if implemented according to law, $800,000,000 in more programming could serve as the cornerstone for America’s most innovative State level health system – universal coverage for all Wyoming’s citizens.
This is unlikely to occur because the Legislature has shown it does not work for the welfare of Wyoming’s citizens.
Rep. Pendergrast was quoted to say, ““We have the state stepping in and competing with private business on an unfair level. And I’ve always been of the impression that it was the responsibility of the state to provide a level playing field so that anybody who wanted to build a business could build a business. So philosophically, I have a real problem right there.”
So what needs does Pendergrast’s quote prioritize? The physical health of Wyoming’s citizens, or “philosophically” insurance businesses?
I would say that it is such bone-headed statements that signal the need for a new generation of Wyoming leaders to step up and innovate to address the actual needs of Wyoming citizens.
State Health Dept. Director Johannson said;
“The proposal is not designed to replace an Affordable Care Act Plan, it’s an alternative, in a way, that is a very different type of product that says, ‘if you are choosing to go uninsured as an individual, here is something at a lower cost that would protect you against those larger financial issues.’”
The concept, he continued, “was intriguing enough to the federal government, to the Trump administration, to say, ‘hey, while all this is going on with these expiring ACA subsidies … here’s one state that’s at least considering an alternative to cover this.’”
I would challenge Director Johannson to find more than a couple people who “choose” not to have medical insurance. I don’t know about anyone else, but the idea that the proposed BearCare program is alternative to Obamacare is ludicrous. While it may help those who can’t afford medical insurance when they are attacked by a bear or in a debilitating automobile crash, it’s “slight-of-hand with a forked tongue” kind of BS to even equate it in any way with real routine medical care.
I get the conservative point – hard work and personal discipline will create a good life. But there has to be the opportunity to do so. The Legislature would rather let Wyoming’s poorest get sick and become wards of the state, sitting in emergency room chairs rather than get preventative and routine care.