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Doctors and Hospitals to See Lower Medicaid Payments in Three Dozen States

A Health Affairs analysis says the cuts could reduce provider payments by 10% to 25% in 17 states and make Medicaid care harder to find.

  • New federal rules signed by President Donald Trump in July 2025 will force three dozen states to reduce annual Medicaid payments by more than $50 billion, according to a Health Affairs analysis.
  • Starting in 2028, the law mandates state Medicaid programs reduce reimbursement rates by 10 percentage points annually until reaching 100% or 110% of Medicare levels, curbing rapid growth in state-directed payments.
  • The 15 states that spent more than 20% of their fiscal 2024 Medicaid budgets on these payments face the deepest cuts, while 17 states with highest reimbursement rates must reduce spending by 10% to 25%.
  • Debra Lipson, the independent health policy researcher who authored the report, warned that providers are likely to limit Medicaid patient access as reimbursement gaps widen.
  • Providers might attempt to offset losses by negotiating higher prices with commercial insurers, Lipson suggested, potentially raising costs for non-Medicaid patients.
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Doctors and hospitals to see lower Medicaid payments in three dozen states

New federal rules likely will force three dozen states to reduce their annual Medicaid payments to doctors and hospitals by a total of more than $50 billion — potentially shrinking the number of providers willing to see Medicaid patients, according to a new analysis. The analysis in the peer-reviewed Health Affairs estimates that the 17 […]

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Stateline broke the news in Chapel Hill, United States on Thursday, September 24, 2026.
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