Medicaid represents nearly $1 out of every $5 spent on health care in the U.S. and is the major source of financing for states to provide health coverage and long-term care for low-income residents. Medicaid is administered by states within broad federal rules and jointly funded by states and the federal government through a federal matching program with no cap. States are facing substantial Medicaid financing changes and historic reductions in federal funding following the passage of the 2025 reconciliation law, though the timing of the changes and the impacts vary by state.

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Medicaid is the primary program providing comprehensive coverage of health and long-term care to over 81 million low-income people in the U.S. Medicaid is jointly financed by states and the federal government but administered by states within broad federal rules. In addition to meeting federal and state income and residency requirements, eligibility for coverage under Medicaid and the Children’s Health Insurance Program (CHIP) is limited to U.S. citizens and certain lawfully present immigrants. Starting October 1, 2026, the 2025 reconciliation law will further restrict lawfully present immigrant eligibility for Medicaid and CHIP. Federal Medicaid funds cannot be used to cover undocumented immigrants. Undocumented immigrants also are excluded from other federally funded health programs, including Medicare and the Affordable Care Act (ACA) Marketplaces.

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On July 4, President Trump signed the 2025 reconciliation law that makes significant changes to the Medicaid program, including new requirements for states to implement work requirements. Starting January 1, 2027, states must condition Medicaid eligibility on meeting work requirements for individuals enrolled through the Affordable Care Act (ACA) Medicaid expansion pathway and through certain state waivers. To ease the burden on individuals, the law directs states to use available information “where possible” to verify compliance with Medicaid work activities or exemption status, without requiring additional documentation from individuals.

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It was a snowy afternoon in Bozeman, a city of nearly 60,000 nestled among the mountains of southern Montana. Temperatures hovered in the mid-30s. The city’s mobile crisis team had just gotten a call about a man walking around outside without shoes. The man’s family told the team he was having a mental health crisis and wouldn’t come inside.

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Samantha Smith of Harrisburg, Pennsylvania, went into the operating room for emergency removal of an ectopic pregnancy. “I’m grateful I didn’t die,” she said, but she was shocked to see that the outpatient surgery was billed to her insurer for about $100,000.

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Star Quinn moved to Kingsport, Tennessee, in 2023, the same year the state began covering dental costs for about 600,000 low-income adults enrolled in Medicaid.

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Families of Idahoans with disabilities say their lives could be upended as lawmakers in the state’s Republican-dominated legislature mull sweeping cuts. Services at risk include the 24/7 care that allows a 39-year-old with cerebral palsy to live independently; the in-home caregiving that lets a 26-year-old with brain damage from a hemorrhage at birth stay in his family home; and private duty nursing for a 19-year-old with cerebral palsy who has qualified for hospice care for complications including pulmonary decline from a spinal cord injury.

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Comprehensive, capitated managed care is the dominant Medicaid delivery system, accounting for about 78% of beneficiaries (over 66 million individuals as of July 2024) and 50% of total Medicaid spending (over $458 billion in FY 2024). States were contracting with over 280 individual Medicaid managed care organizations (MCOs) (as of July 2022), which represent a mix of private for-profit, private non-profit, and government plans. Medicaid managed care contracts are among the largest and most complex state contracts, frequently exceeding billions of dollars a year. While the majority of states contract with managed care plans, states decide which populations and services to include in managed care arrangements, leading to considerable variation across states.

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In the final days of 2025, governors around the country trumpeted the hundreds of millions of federal dollars they won from a new, $50 billion rural health fund.

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COLUSA, Calif. — Early on, Jean Franklin got some career advice she followed religiously: “Pay yourself first.” So she did, socking away hundreds of thousands of dollars in retirement savings by the time she became a stay-at-home mom at age 41.

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