The Future of the Medicaid Program

Published: 9/30/2025

Medicaid is vital in the effort to ensure that our nation’s most vulnerable populations have access to health care coverage. ACP’s advocacy has focused on protecting the Medicaid program, encouraging states to expand their programs, and opposing efforts by federal and state lawmakers to undermine the program’s efficacy by cutting or capping program funding. ACP has also advocated against imposing mandatory work requirements, premiums and cost-sharing for vulnerable individuals, and benefit cuts.

Background

Medicaid is the United States’ largest health insurance program. This safety net program, along with the Children’s Health Insurance Program, provides health coverage to approximately 78 million Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.  Federal law mandates that state Medicaid programs cover certain populations (e.g., low-income children), provide certain benefits, and apply limits on cost sharing among many other things.

The program is funded jointly by states and the federal government, and both the federal government and states are responsible for ensuring that Medicaid is fiscally sustainable over time and effective in meeting the needs of the people it serves. Medicaid accounts for a sizeable portion of both federal and state budgets. As a result, lawmakers are constantly looking for innovative ways to reduce costs.

Since the implementation of the Affordable Care Act (ACA) – which expanded Medicaid coverage to nonelderly adults with income up to 138 percent of the Federal Poverty Level – overall enrollment in Medicaid has increased.  After a challenge to the ACA’s original expansion provision, states have the option to expand their Medicaid program. States that have expanded their Medicaid programs have received additional federal funding to support increased enrollment through a federal match of at least 90 percent of Medicaid expenditures for the expansion population.

At the outset of the COVID-19 pandemic, Congress provided enhanced federal funding for state Medicaid programs with the requirement that states maintain continuous enrollment for all beneficiaries through the period of the public health emergency.  In 2023, state Medicaid programs began “unwinding” the continuous enrollment provision to determine if Medicaid enrollees were still eligible for coverage. Although most people renewed coverage, an estimated 25 million as of September 2024 were disenrolled from the Medicaid program, primarily due to procedural reasons such as failure to complete the renewal process. Despite these millions of disenrollments, 10 million more people are currently enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) nationally than at the start of the pandemic, according to the Kaiser Family Foundation (KFF).

Federal Activity

On July 4, 2025, President Trump signed H.R. 1, an Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14 also known as the One, Big, Beautiful, Bill Act (OBBBA) into law. According to the Congressional Budget Office, this new law would reduce federal spending for Medicaid and the Affordable Care Act’s provisions by approximately $1 trillion over a decade, and lead to significant coverage loss for at least 10 million Americans by 2034. Additionally, if Congress does not extend the premium tax credits under the Affordable Care Act (ACA) that have allowed millions of Americans to buy into the ACA health care exchange, an additional 4.2 million Americans could be uninsured by 2034.

The new law makes many changes to Medicaid, including: 

  • States that have expanded Medicaid are required to conduct eligibility determinations twice a year, rather than annually.
  • States are allowed to impose additional cost-sharing requirements for the Medicaid expansion population.
  • Starting on January 1, 2027, states are required to establish work requirements for low-income adults without dependents with the option for states to implement requirements sooner through 1115 waivers. To be eligible for Medicaid coverage, certain adults must have documentation showing that they have completed at least 80 hours per month of work, education, or community service. Some enrollees are exempt from work requirements, including people who are medically frail, disabled veterans, and certain caregivers. A Kaiser Family Foundation (KFF) analysis found that in 2023, nearly two-thirds of adults ages 19-64 covered by Medicaid were working and nearly three in ten were not working because of caregiving responsibilities, illness or disability, or due to school attendance. Research has shown that imposing work requirements does not lead to meaningful impact on employment and that the savings would mostly come from Medicaid recipients losing coverage as a result of challenges with new paperwork and reporting requirements.

Medicaid work requirements have previously been implemented with little success, as evident in Arkansas and Georgia. Under the Medicaid 1115 waivers, Arkansas implemented Medicaid work requirements, which resulted in more than 18,000 people losing coverage in just a seven-month period. Launched in July 2023, Georgia’s work requirement program provides only 4,231 Americans with Medicaid coverage. Studies of these states’ programs show implementing work requirement leads to significant “red tape” and administrative expenses, diverting funds from patients care to administrative staff, new systems, and compliance monitoring, while causing no subsequent rise in employment.

State Activity

Since the enactment of the ACA in 2010, 41 states (including the District of Columbia) have chosen to implement the ACA’s Medicaid expansion, providing health insurance to more than 21 million newly eligible Americans. 

Additionally, coverage protections for children have been extended. As of January 2024, all states are required to provide 12 months of continuous coverage for children in Medicaid and CHIP, which allows enrolled children to maintain coverage for a 12-month period regardless of income fluctuations that would otherwise make them ineligible for coverage.

Most states have utilized waivers under Section 1115 of the Social Security Act, which allows states to waive certain requirements to expand eligibility, test delivery systems reforms, and establish managed care organizations, or make other changes.  ACP’s position paper entitled, Medicaid Expansion: Premium Assistance and Other Options includes a number of recommendations on how waivers should be constructed.  For initial 1115 waiver submissions and extensions of existing waivers, states are mandated to have a public notice and comment period of at least 30 days.  Once the state has submitted the application to the federal government and it has been deemed to be complete, a 30-day federal public comment period begins. 

During the Biden administration CMS approved waivers from states that reflect a new Health-Related Social Needs (HRSN) framework to address social drivers of health and related issues, with 24 states receiving approval to use Medicaid funds to address the social needs of enrollees.  While there is some variation between the specific policies states are testing, the framework generally enhances flexibility to use Medicaid funds for services aimed at food, housing, and other health-related needs. On March 4, 2025, CMS announced a recission of the Biden administration guidance on HRSN. CMS states that it “will consider states’ applications to cover these services and supports on a case-by-case basis to determine whether they satisfy federal requirements for approval and will not negate programs that are currently approved. 

If you have questions regarding a waiver in your state, please contact ACP National through the Advocacy Assistance Request Form.

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