Medicaid Enrollment & Spending Growth: FY 2025 & 2026

(Authors: Elizabeth Williams, Anna Mudumala, Elizabeth Hinton, and Robin Rudowitz for The Kaiser Family Foundation Published: Nov 13, 2025)

States are facing a more tenuous fiscal climate due to slowing revenue growth and increasing spending demands in state fiscal year (FY) 2026. Recent shifts in economic conditions as well as recent federal actions, including cuts to safety net programs and tax code changes in the recently passed reconciliation law (H.R.1), changes to the Affordable Care Act (ACA) enhanced Marketplace subsidies, federal workforce cuts, and tariff changes, contribute to further fiscal uncertainty for states, though fiscal conditions and the impact of federal changes vary across states. For Medicaid, states are navigating the new “normal” for their programs following the expiration of pandemic-era policies while contending with shifts in state fiscal conditions and longer-term fiscal uncertainty. The Medicaid provisions in H.R.1 are estimated to reduce federal Medicaid spending by $911 billion (or by 14%) over a decade and increase the number of uninsured people by 7.5 million, though the impacts vary by state with spending cuts ranging from 4% to almost one-fifth of all federal Medicaid spending in some states. While many provisions in the new law, including some of the largest sources of federal Medicaid savings such as work requirements and financing changes, do not take effect until FY 2027 or later, many states noted they were anticipating the new law’s implementation and impact. Looking ahead, the challenging fiscal climate and the magnitude of federal Medicaid cuts will make it difficult for states to absorb or offset the reductions. Continue reading here…

Notice: The link provided above connects readers to the full content of the posted article. The URL (internet address) for this link is valid on the posted date; medicarereport.org cannot guarantee the duration of the link’s validity. Also, the opinions expressed in these postings are the viewpoints of the original source and are not explicitly endorsed by AMAC, Inc.; the AMAC Foundation, Inc.; or medicarereport.org.