What the $47 Billion NIH Budget Actually Means
Congress funded NIH at $47.22 billion for FY2026, a $216 million increase over FY2025. Every 27 institutes survived. The administration's proposed 40% cut was rejected. That is the headline, and it is accurate as far as it goes. It does not go far enough. NIH issued only 12,588 grants in 2025, compared to an average of 16,099 per year from 2015 to 2024. That is a 22% drop in grant volume in a single year. At NCI specifically, success rates fell from roughly 1-in-10 to 1-in-25. Over 2,200 grants totaling $3.8 billion were terminated in 2025, including at least 160 clinical trials affecting more than 74,000 patients. NIH lost approximately 3,000 employees, 14% of its workforce. The budget was preserved. The system that distributes it was not. For healthcare organizations planning their funding strategies, the second fact matters more than the first. This guide covers what actually changed in healthcare funding, which agencies are growing, and where healthcare organizations should be looking beyond NIH. For details specific to NIH applications, see our NIH grants guide. For a breakdown of other HHS agencies, see our HHS guide.
How NIH's Funding Rules Changed
Three policy changes matter more than the budget number. First, NIH eliminated paylines. Historically, each institute published a percentile cutoff: score below it and you get funded. That system is gone. NIH announced that institutes will no longer publish paylines and that a strong percentile score no longer guarantees funding. Decisions now incorporate "programmatic and strategic criteria," meaning even applications scoring in the 1st to 5th percentile may not be funded if they don't align with the institute's current priorities. Applicants need to read each institute's strategic plan before submitting. Second, NIH implemented a lump-sum funding policy requiring that at least half of remaining competing RPG funds be used to upfront-fund awards. Instead of funding a five-year R01 in annual increments, NIH pays the full amount in the first year. This sounds convenient for recipients, but the math is punishing: each lump-sum award consumes five years of budget at once, which means far fewer new awards can be made per cycle. Third, the administration attempted to cap indirect cost recovery at 15%, down from typical negotiated rates of 50-70%. A federal judge permanently blocked the policy, but HHS appealed and the case remains pending. If eventually upheld, the cap would strip an estimated $5.24 billion annually from research institutions, roughly what they spend on the infrastructure that makes research possible. The uncertainty alone is affecting institutional planning. For context on how indirect cost rates work, see our grant budgets guide. The practical effect: winning an NIH grant in 2026 requires not just excellent science but demonstrated alignment with the specific institute's stated priorities. Scientific merit alone is no longer sufficient.
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The HHS Restructuring
On March 27, 2025, HHS announced what it called a "dramatic restructuring" of the department. The changes directly affect where healthcare grant seekers submit applications and who manages their awards. SAMHSA, HRSA, the Office of the Assistant Secretary for Health, the Agency for Toxic Substances and Disease Registry, and NIOSH are being consolidated into a new entity called the Administration for a Healthy America (AHA). The Administration for Community Living's programs are being dispersed across ACF, ASPE, and CMS. Regional offices were reduced from 10 to 5. The total HHS workforce is being cut from 82,000 to 62,000. ARPA-H is proposed to move out of NIH into a new office under the HHS Secretary. For grant seekers, this creates a practical problem: the agency you applied to last year may not exist under the same name or organizational structure. Program officers may have changed or been eliminated. Grant management contacts may be different. The transition is happening in real time, which means some programs may experience processing delays or temporary confusion about where to submit applications. Existing awards should continue; the restructuring affects organizational charts, not appropriated funds. But new applicants should verify that the program they're targeting is still accepting applications under its current structure. Check agency websites directly rather than relying on cached information.
CDC and Public Health Funding
The proposed FY2026 CDC budget represents a 53% reduction compared to FY2024, with over 60 programs slated for elimination. The Prevention and Public Health Fund would be zeroed out entirely. The Preventive Health and Health Services Block Grant, funded at $160 million, would be eliminated. In February 2026, the administration pulled $600 million in public health funds from four states, claiming the grants "no longer match health priorities." California sued. A federal court blocked further attempts to cut CDC funds that Congress had already appropriated. Congress has not enacted these proposed cuts, and existing CDC programs continue operating under current appropriations. But the uncertainty is real. State and local health departments that depend on CDC pass-through funding are scrambling to identify alternative revenue. Organizations that partner with these health departments on CDC-funded programs should have contingency plans. Researchers at George Washington University estimated that the proposed cuts would eliminate approximately 42,000 jobs and that state economies would lose $5.4 billion in GDP, with $1.40 lost for every $1 in cuts. Whether Congress accepts these proposals remains the central question for public health funding in 2026.
Where the Growth Is: $50 Billion for Rural Health and HRSA's Expansion
Not everything is contracting. Two programs represent genuine, large-scale growth in healthcare funding. The One Big Beautiful Bill Act created the Rural Health Transformation Program (RHTP): $10 billion per year from 2026 through 2030, totaling $50 billion, distributed by CMS to states. Every state receives at least $100 million annually. This is the largest new healthcare funding stream in 20 years, and it flows through state applications to CMS rather than through traditional NIH or HRSA grant channels. FQHCs get expanded cost-sharing exemptions, new workforce programs, and funding for community health workers. States had to submit initial applications by December 31, 2025, but implementation funding will flow throughout the five-year period. The program comes with a tradeoff worth understanding: the Congressional Budget Office estimates that other provisions in the same legislation will result in 11.8 million people losing health coverage by 2034 through Medicaid work requirements, the end of ACA expansion incentives, and more frequent eligibility redeterminations. Rural health organizations will be working with more funding but potentially fewer insured patients. HRSA's Community Health Center Fund was set at $4.6 billion for FY2026, the largest increase in a decade. The National Health Service Corps received $350 million in base funding, and Teaching Health Center GME got $225 million. Performance periods were extended from three to four years, reducing the burden of recompetition. Medicare telehealth flexibilities were extended through 2027. For healthcare organizations in rural and underserved areas, these two programs represent more accessible funding than the increasingly competitive NIH system. Our USDA guide covers additional rural funding beyond healthcare.
Three Programs Most Healthcare Organizations Overlook
With NIH success rates falling, three programs deserve more attention than they typically receive. PCORI (Patient-Centered Outcomes Research Institute) has multiple open funding cycles in 2026. Their Broad Pragmatic Studies program offers up to $120 million, with individual awards reaching $12 million. Phased Large Awards go up to $22 million per project. Methods improvement awards are available at up to $750,000. PCORI's focus on patient-centered outcomes research means the competition pool differs from NIH: applicants need strong patient engagement and implementation plans rather than basic science credentials. Multiple deadlines fall throughout 2026. DoD's Congressionally Directed Medical Research Programs (CDMRP) allocated $1.27 billion across 34 programs for FY2026. The Peer Reviewed Medical Research Program alone is $370 million. Despite the military connection, CDMRP funds cancer research, traumatic brain injury, PTSD, infectious disease, and many conditions relevant to civilian healthcare. Universities, hospitals, and nonprofit research institutions are all eligible. Our defense contracts guide covers more DoD funding pathways. ARPA-H remains funded at $1.5 billion and offers Mission Office Innovative Solution Openings (ISOs) on a rolling basis. Because the agency is newer and still building its portfolio, competition is less intense than at NIH. Focus areas include Resilient Systems and Scalable Solutions. ARPA-H explicitly targets "high-impact, transformative" health research and has a more flexible funding model than traditional NIH mechanisms. BARDA is running a $100 million antiviral prize competition (SMART Prize) through its VITAL therapeutics accelerator, focused on broad-spectrum antivirals. None of these programs require NIH-style preliminary data or established track records at the same level. For organizations that have been shut out of NIH, these represent real alternatives, not consolation prizes.
What Healthcare Organizations Should Do Now
The healthcare funding environment rewards adaptation more than persistence in 2026. Some practical steps. Diversify beyond NIH. Organizations that built their entire funding model around R01s are the most exposed. Maintaining NIH applications is reasonable, but spreading applications across PCORI, CDMRP, ARPA-H, and the OBBBA rural health program reduces dependence on a single increasingly competitive source. Read the institute strategic plan before submitting. With paylines gone and "programmatic fit" now part of the decision, aligning proposals with the specific institute's stated priorities is no longer optional. A technically excellent proposal that doesn't match the institute's current direction may not be funded regardless of score. Track the HHS restructuring. Verify that your target program still exists under its current name and organizational home. Check the current status of programs formerly housed at SAMHSA, HRSA, or ACL. When in doubt, call the program office directly. Prepare for the indirect cost ruling. If the 15% cap is upheld on appeal, it would fundamentally change how research institutions operate. Scenario-plan for both outcomes. Pursue state-level opportunities. State health departments, university systems, and procurement agencies collectively offer hundreds of healthcare funding opportunities that get less attention than federal grants. We track 296 state healthcare opportunities. These range from clinical research partnerships to health IT contracts to public health programming. SBIR and STTR remain expired. Healthcare startups and small businesses should pursue alternative R&D funding including BAAs, OTAs, and state-level innovation programs while awaiting reauthorization. Search healthcare funding opportunities on Funding Landscape