Introduction

Managed care is the dominant delivery system for people enrolled in Medicaid. The latest national Medicaid managed care enrollment data (from 2024) show 78% of Medicaid beneficiaries were enrolled in comprehensive managed care organizations (MCOs). While managed care is the dominant Medicaid delivery system, states decide which populations and services to include in managed care arrangements, which leads to considerable variation across states. Additionally, while state requirements for Medicaid managed care plans can be tracked, plans have flexibility in certain areas, including in setting provider payment rates, and plans may choose to offer additional benefits beyond those required by the state.

States and plans faced considerable rate setting uncertainty after millions of people were disenrolled during the “unwinding” of the pandemic-era Medicaid continuous enrollment provision. Many states sought federal approval to adjust rates to address shifts in utilization and acuity—as people who used fewer services than average were disenrolled, leaving a group with higher health risk and spending. Looking ahead, states expect the 2025 federal budget reconciliation law will create additional managed care plan rate setting challenges as the Medicaid provisions impacting enrollment and spending (e.g., program financing changes, work requirements, and more frequent eligibility redeterminations) roll out over the next several years. Federal Medicaid spending cuts, coupled with a more tenuous fiscal climate (at the state-level), will have implications for states and enrollees as well as plans and providers. In this context, this brief describes 10 themes related to the use of comprehensive, risk-based managed care in the Medicaid program.

1. Capitated managed care is the dominant way in which states deliver services to Medicaid enrollees.

States design and administer their own Medicaid programs within federal rules. States determine how they will deliver and pay for care for Medicaid beneficiaries. Nearly all states have some form of managed care in place – comprehensive risk-based managed care (i.e., contracts with MCOs) and/or primary care case management (PCCM) programs.^{1, 2} As of July 2025, 42 states (including DC) contract with comprehensive, risk-based managed care plans to provide care to at least some of their Medicaid beneficiaries (Figure 1). Oklahoma is the latest state to be included in this count, having implemented capitated, comprehensive Medicaid managed care (for most children and adults) on April 1, 2024. Following the passage of state legislation, Idaho ended its PCCM program effective January 1, 2026 and expects to implement comprehensive MCOs in January 2030. Medicaid MCOs provide comprehensive acute care (i.e., most physician and hospital services) and, in some cases, long-term care to Medicaid beneficiaries and are paid a set per member per month payment for these services. For more than three decades, states have increased their reliance on managed care delivery systems with the aim of improving access to certain services, enhancing care coordination and management, and making future costs more predictable. While the shift to MCOs has increased budget predictability for states, the evidence about the impact of managed care on access to care and costs is both limited and mixed.^3,4,5

2. In FY 2024, payments to comprehensive risk-based MCOs accounted for half of Medicaid spending.

In FY 2024, state and federal spending on Medicaid services totaled $919 billion. Payments made to MCOs accounted for about 50% of total Medicaid spending (Figure 2). The share of Medicaid spending on MCOs varies by state, but about three-quarters of MCO states directed at least 40% of total Medicaid dollars to payments to MCOs (Figure 3). State-to-state variation reflects many factors, including the proportion of the state Medicaid population enrolled in MCOs, the health profile of the Medicaid population, whether high-risk/high-cost beneficiaries (e.g., people with disabilities, dual-eligible beneficiaries) are included in or excluded from MCO enrollment, and whether long-term care services are included in MCO contracts. As states continue to expand Medicaid managed care to include higher-need, higher-cost beneficiaries, expensive long-term care, and adults eligible for Medicaid under the Affordable Care Act (ACA), the share of Medicaid dollars going to MCOs could continue to increase.

3. Over three-quarters (78%) of all Medicaid beneficiaries received their care through comprehensive risk-based MCOs.

As of July 1, 2024, over 66 million Medicaid enrollees, or 78% of all Medicaid enrollees, received their care through risk-based MCOs. Thirty MCO states covered at least 75% of Medicaid beneficiaries in MCOs (Figure 4).

4. Children and adults are groups most likely to be enrolled in MCOs.

Among states that contract with comprehensive Medicaid MCOs, children and ACA expansion adults are the most likely to be enrolled in comprehensive MCOs (90% and 86%, respectively) (Figure 5). Nearly three quarters (72%) of “other adults” (e.g., parents and pregnant individuals) were enrolled in comprehensive MCOs (in 2023). People eligible for Medicaid through a disability pathway and adults ages 65+ are less likely to be enrolled in comprehensive MCOs, although states have been moving to include these groups in MCOs over time.

5. Five publicly traded firms account for almost half of MCO enrollment.

States contracted with a total of 291 Medicaid MCOs as of July 2024. MCOs represent a mix of private for-profit, private non-profit, and government plans. As of July 2024, a total of 15 firms operated Medicaid MCOs in two or more states (called “parent” firms), and these firms accounted for over 62% of enrollment in 2024 (Figure 6). Of the 15 parent firms, six are publicly traded, for-profit firms while the remaining nine are non-profit companies. Five firms – Centene, UnitedHealth Group, Elevance (formerly Anthem), Molina, and Aetna/CVS – account for 47% of all Medicaid MCO enrollment (Figure 6). All five are publicly traded companies ranked in the Fortune 500, and four are ranked in the top 100.

6. States make decisions about which services to carve in and out of MCO contracts. 

Although MCOs provide comprehensive services to beneficiaries, states may carve specific services out of MCO contracts to fee-for-service systems or limited benefit plans. Services frequently carved out include dental, non-emergency medical transportation (NEMT), and behavioral health. Among those enrolled in comprehensive MCOs, over two-thirds were also enrolled in at least one limited benefit prepaid health plan (PHP) and/or received fee-for-service (FFS) care outside of their MCO in 2023 (Figure 7).  People with disabilities (enrolled in an MCO) are most likely to also be enrolled in a limited benefit plan(s) and/or receive FFS care. Individuals enrolled in multiple plans (i.e., MCO + limited benefit PHP(s)) or delivery systems (i.e., MCO + FFS) may have to juggle multiple complex systems, with differing rules. Among MCO enrollees also enrolled in at least one limited benefit plan, over half were enrolled in a dental plan (Figure 8). (Note that while EPSDT requires states to provide comprehensive dental services for children, dental benefits are optional for adults. State Medicaid programs are required to provide necessary transportation for enrollees to and from providers (referred to as “non-emergency medical transportation” or “NEMT”).)

7. Each year, states develop MCO capitation rates that must be actuarially sound and may include risk mitigation strategies.

MCOs are at financial risk for services covered under their contracts, receiving a per member per month “capitation” payment for these services. While plans set rates in the commercial and Medicare Advantage markets, Medicaid managed care rates are developed by states and their actuaries and reviewed and approved by CMS. Capitation rates must be actuarially sound⁶ and are applied prospectively, typically for a 12-month rating period, regardless of changes in health care costs or utilization. States may use a variety of risk mitigation tools to ensure payments are not too high or too low, including risk sharing arrangements, risk and acuity adjustments, or medical loss ratios (MLR) remittance requirements. States may also incorporate quality metrics into the ongoing monitoring of their programs, including linking financial incentives (e.g., performance bonuses or withholds) to quality measures.

To limit the amount that plans can spend on administration and keep as profit, states are required to develop capitation rates for Medicaid to achieve an MLR of at least 85% in the rate year;⁷ however, there is no federal requirement for Medicaid plans to pay remittances to the state if they fail to meet the MLR standard.⁸ As of July 2025, 33 MCO states reported they always require remittance payments when an MCO does not meet state minimum MLR requirements, while three states indicated they sometimes require MCOs to pay remittances (Figure 9). Analysis of National Association of Insurance Commissioners (NAIC) data for the Medicaid managed care market show that average loss ratios (in aggregate across plans) increased from 88% in 2023 to 91% in 2024 (Figure 10) (the highest Medicaid managed care average loss ratio observed in the past decade – data not fully shown).

When significant enrollment, utilization, cost, and acuity changes began to emerge early in the COVID-19 public health emergency, CMS allowed states to modify managed care contracts, and many states implemented COVID-19 related “risk corridors” (where states and health plans agree to share profit or losses), allowing for the recoupment of funds. States and plans faced another period of heightened rate setting uncertainty when the continuous enrollment provision expired on March 31, 2023. During the “unwinding” of the pandemic-era Medicaid continuous enrollment provision, millions of people were disenrolled. Higher member risk and utilization patterns began to emerge by late 2023, and many states sought federal approval to adjust rates to address these shifts. The 2025 federal budget reconciliation law is expected to create rate setting challenges for states as the Medicaid provisions impacting enrollment and spending (e.g., work requirements, more frequent eligibility redeterminations, and provider tax and state directed payment (SDP) caps and reductions) roll out over the next several years.

8. Changes to federal state directed payment rules may impact provider payments.

States are generally prohibited from contractually directing how a managed care plan pays its providers.⁹ Subject to CMS approval, however, states may implement certain “state directed payments” (SDPs) that require managed care plans to adopt minimum or maximum provider payment fee schedules, provide uniform dollar or percentage increases to providers (above base payment rates), or implement value-based payment (VBP) arrangements.^10,11,12 Many states that contract with MCOs use SDPs to make uniform rate increases that are like FFS supplemental payments. Since SDPs were introduced in 2016, they have become a core component of reimbursement for many providers. Significant changes to state directed payment rules recently enacted through the 2025 federal budget reconciliation law and through the 2024 CMS Managed Care rule are expected to affect Medicaid provider payment rates.

The reconciliation law directs HHS to revise SDP regulations to cap the total payment rate for inpatient and outpatient hospital services, nursing facility services, and professional services at academic medical centers at 100% of the total published Medicare payment rate for states that have adopted the Medicaid expansion and at 110%¹³ of the total published Medicare payment rate for states that have not adopted the expansion. (Under previous rules, payments were capped at 100% of average commercial rates.¹⁴) Certain SDPs are initially grandfathered¹⁵ but will be reduced by ten percentage points each year (starting January 1, 2028) until they reach the allowable Medicare-related payment limit. The Congressional Budget Office (CBO) estimated revising the payment limit for state directed payments will result in $149 billion in federal savings over ten years (Figure 11). The 2025 reconciliation law also imposes significant new restrictions on states’ ability to generate Medicaid provider tax revenue, estimated to result in $226 billion in federal savings (Figure 11). In KFF’s 2025 Medicaid budget survey, states noted the new provider tax changes could result in significant state budget impacts as well as reductions in provider payment rates and state directed payments, which are often funded by provider taxes.

In addition to the 2025 reconciliation law changes, beginning in July 2027, the 2024 Medicaid Managed Care rule requires states to incorporate all SDPs through capitation rate setting adjustments instead of using “separate payment terms,” which provide payments outside of base capitation rates.¹⁶ The change moves these payments from predictable, separate payments to more complex, risk-based arrangements, which may reduce states’ ability to target reimbursement for specific provider types. CMS eliminated separate payment terms due to concerns that these separate payments undermine the risk-based nature of managed care and are frequently driven by the financing of the non-federal share. MACPAC analysis found that over half of SDP arrangements approved between February 2023 and August 2024 were incorporated through separate payment terms.

9. CMS finalized rules to strengthen access standards, but the future of the rules is uncertain.  

In 2024, the Biden administration finalized major Medicaid regulations designed to promote quality of care and advance access to care for Medicaid enrollees. The Managed Care rule strengthens standards for timely access to care, including through the establishment of national maximum wait time standards for certain “routine” appointments, and states’ monitoring and enforcement efforts. These rules are complex and set to be implemented over several years. It remains uncertain whether the Trump administration will seek to roll back or revise provisions included in the 2024 managed care final rules. 

In 2024, CMS also finalized a rule focused on improving the prior authorization process including reducing approval wait times and improving transparency. A July 2023 OIG report found that Medicaid MCOs had an overall prior authorization denial rate of 12.5%–more than 2 times higher than the Medicare Advantage rate (Figure 12), raising concerns about prior authorization and access in Medicaid managed care. OIG recommendations (to CMS) included strengthening state monitoring of denials and appeals. MACPAC has highlighted similar concerns, making recommendations in the March 2024 Report to Congress focused on improving the appeals process and enhancing monitoring and oversight of MCOs. Beginning in June 2026, states will be required to report plan-level prior authorization data to CMS, including the total number prior authorization requests, denial and approval rates, the percentage of standard prior authorization requests that were approved after appeal, and average and median decision times as part of managed care annual program reports (see additional discussion below). 

While health insurers are increasingly using AI to automate parts of the prior authorization process, there is limited information available about its use and impact within Medicaid managed care. MACPAC found that while there are potential benefits of automation in prior authorization such as administrative efficiencies and faster processing times, it may also pose potential risks or challenges depending on how it is administered and monitored. In the absence of comprehensive federal policy governing AI use and oversight in prior authorization, some states have taken steps to regulate or monitor use of AI by health plans. A 2025 KFF survey of state Medicaid directors found less than one-quarter of states reported requiring MCOs to disclose the use of AI in prior authorization processes as of July 1, 2025, although nearly half of MCO states reported knowledge of at least some of their contracted MCOs using AI in their prior authorization processes (Figure 13). Several states reported implementing new or expanded oversight activities or adopting other safeguards in FY 2025 or 2026 to support appropriate use of AI in MCO prior authorization processes.

10. In recent years, CMS has taken steps to improve managed care program monitoring and transparency.

The 2016 Medicaid managed care final rule created new managed care reporting requirements for states. CMS, under the Biden administration, developed standard reporting templates (Table 1) and a variety of toolkits and released a series of informational bulletins (2021, 2022, 2023, 2024) to help states improve their monitoring and oversight of managed care programs. Transparency has the potential to promote accountability. To improve transparency, CMS began publicly posting the Managed Care Program Annual Report (MCPAR) and the MLR Summary Reports on Medicaid.gov in 2024. Posting data relating to the performance of individual MCOs may allow for comparison within and across states. However, limitations and challenges may exist.

Managed care rules finalized in 2024 include provisions aimed at further strengthening managed care transparency and monitoring, though the fate of these rules remains uncertain. In March 2026,  the Trump administration released an informational bulletin to aid states’ monitoring and oversight of managed care. CMS indicated it has implemented managed care oversight reviews that will leverage data collected from standardized reporting tools (e.g., MCPARs, network adequacy and access reports, and MLR summary reports). While CMS has continued to post state-submitted MCPAR and MLR summary reports on Medicaid.gov, it has also updated MCPAR requirements to remove certain questions related to access and network adequacy and plan-level MLR percentage reporting. These changes were introduced to reduce state burden and duplication with the separate network adequacy and access report and the MLR summary report; however, removing certain access and network adequacy questions may also reduce transparency as state network adequacy and access reports are not currently posted on Medicaid.gov. While the MLR Summary Reports are posted on Medicaid.gov, in the future, individuals will need to access the MLR Summary Reports separately to obtain plan-level MLR reporting information (as it will no longer be available in MCPAR reports). 

Medicaid Managed Care Plan Enrollment by Eligibility Group

This section provides information on the methods used in the analysis of Medicaid managed care plan enrollment by eligibility group (Figures 5, 7, and 8).

Data: This analysis uses data available from the 2023 T-MSIS Research Identifiable Demographic-Eligibility and Claims Files to identify enrollment in Medicaid managed care plans.

Medicaid enrollee inclusion criteria: Individuals were included if they had at least one month of Medicaid enrollment in 2023.  This analysis identified Medicaid enrollment in a month (MM) in 2023 when CHIP_CD_01- CHIP_CD_12 equals 1 or, if missing CHIP_CD, when ELGBLTY_GRP_CD_01- ELGBLTY_GRP_CD_12 equals 1-60 or 69-75. Eligibility groups are defined using the most recent non-missing eligibility group in the calendar year (ELGBLTY_GRP_CD_LTST) and a person’s age as follows:

• Seniors: Enrollees age 65 and older.
• People with Disabilities: Enrollees under age 65 who are reported as eligible because of disability.
• Adults: Enrollees ages 19 to 64 who are not eligible because of disability or newly eligible for Medicaid by the ACA Medicaid expansion.
• Children: Enrollees ages 18 and younger who are not eligible because of disability.
• ACA Expansion Adults: Enrollees ages 19 to 64 who were made newly eligible for Medicaid by the ACA Medicaid expansion.

State inclusion criteria: To assess the usability of states’ data, the analysis examined quality assessments from the DQ Atlas for enrollment in managed care and payments to comprehensive managed care plans and compared enrollment in comprehensive managed care with the Medicaid Managed care enrollment report:

• This analysis excluded 10 states with no comprehensive Medicaid managed care plans in 2023 (Alabama, Alaska, Connecticut, Idaho, Maine, Montana, Oklahoma, South Dakota, Vermont, and Wyoming).
• Among states with Medicaid managed care, the analysis excluded states that had both a “Unclassified/ Unusable” DQ Atlas assessment and more than 50% difference between the number of individuals enrolled in managed care in T-MSIS and the number reported in the Medicaid managed care enrollment report.
• No states were excluded based on those criteria in 2023, leaving the other 40 states and D.C. (hereafter, treated as a state) which contract with comprehensive MCOs in the main analysis. Enrollees were assigned a state based on their T-MSIS STATE_CD.

Identifying enrollment in Medicaid managed care plans: To determine enrollment in plans in 2023, individuals were assigned as enrolled in any plans from the list MC_PLAN_ID_01_MM–MC_PLAN_ID_16_MM from the Managed Care Participation segment of the T-MSIS eligibility file. To determine enrollment in comprehensive MCOs, enrollment was limited to plans from the list MC_PLAN_ID_01_MM–MC_PLAN_ID_16_MM from the Managed Care Participation segment of the T-MSIS eligibility file which also have a positive capitated payment to a plan on behalf of the enrollee in the month (MM) in the T-MSIS Other Services (OT) file. This analysis calculated positive capitated payment to a plan on behalf of the enrollee in a month by summing the MDCD_PD_AMT for claims with CLM_TYPE_CD equal to ”2” (Medicaid or Medicaid-expansion Capitated Payment) having a SRVC_END_DT in the month in 2023. Capitated payments were attributed to a specific plan using the MC_PLAN_ID from the OT file.

Identifying Medicaid managed care plan types: This analysis used the Managed Care Participation segment of the T-MSIS eligibility file to map each plan as identified by its MC_PLAN_ID and STATE_CD to its plan type using the associated MC_PLAN_TYPE_CD. In cases where the plan as identified by MC_PLAN_ID and STATE_CD had more than one associated MC_PLAN_TYPE_CD in the Managed Care Participation segment of the T-MSIS eligibility file, the MC_PLAN_TYPE_CD with the largest number of enrollees in that plan was selected. This virtually always matches the MC_PLAN_TYPE_CD from the TAF Annual Managed Care Plan (APL).

KFF created indicator variables to assign the more detailed plan types into the following larger categories. Note that plan types are not mutually exclusive. For example, while there are no plans in 2023 have a MC_PLAN_TYPE_CD of 19 (Individual is enrolled in Long-Term Services and Supports (LTSS) and Mental Health (MH) PIHP), plans of this plan type would fall under both behavioral health and long-term care. KFF grouped the more detailed plan types into the following larger categories:

• Comprehensive managed care: having a MC_PLAN_TYPE_CD with values of 01 (Comprehensive managed care) or 04 (Health Insuring Organization).
• Program of All-Inclusive Care for the Elderly (PACE): having a MC_PLAN_TYPE_CD with values of 17 (PACE).
• Long-term care: having a MC_PLAN_TYPE_CD with values of 07 (Long Term Care Services and Supports (LTSS) PIHP) or 19 (Individual is enrolled in Long-Term Services and Supports (LTSS) and Mental Health (MH) PIHP).
• Behavioral health: having a MC_PLAN_TYPE_CD with values of 08 (Mental Health (MH) PIHP), 09 (Mental Health (MH) PAHP), 10 (Substance Use Disorders (SUD) PIHP), 11 (Substance Use Disorders (SUD) PAHP), 12 (Mental Health (MH) and Substance Use Disorders (SUD) PIHP), 13 (Mental Health (MH) and Substance Use Disorders (SUD) PAHP), or 19 (Individual is enrolled in Long-Term Services and Supports (LTSS) and Mental Health (MH) PIHP).
• Dental: having a MC_PLAN_TYPE_CD with values of 14 (Dental PAHP).
• Transportation: having a MC_PLAN_TYPE_CD with values of 15 (Transportation PAHP).
• Other limited benefit: having a MC_PLAN_TYPE_CD with values of 05 (Medical-only Prepaid Inpatient Health Plan (PIHP)), 06 (Medical-only Prepaid Ambulatory Health Plan (PAHP)), 16 (Disease Management PAHP), 18 (Pharmacy PAHP), or 20 (Other).
• Any limited benefit: having a MC_PLAN_TYPE_CD with values defined above as long-term care, behavioral health, dental, transportation, or other limited benefit.
• Primary care case management (PCCM): having a MC_PLAN_TYPE_CD with values of 02 (Traditional Primary Care Case Management (PCCM) Provider arrangement), or 03 (Enhanced PCCM Provider arrangement).

Managed long-term care (LTC) limited benefit plans: Using the definitions above, in 2023, virtually zero enrollees in long-term care limited benefit plans were concurrently enrolled in a comprehensive MCO. The likely reason there are no enrollees in comprehensive MCOs and limited benefit LTC plans is that most enrollees in limited benefit LTC plans also have Medicare. For such people (“dual-eligible individuals”), Medicaid covers medical acute and post-acute care, including skilled nursing facility services and home health care. Medicaid wraps around Medicare coverage by paying Medicare premiums and in most cases, cost sharing. Most people with Medicare and Medicaid (“dual-eligible individuals”) also are eligible for Medicaid benefits that are not otherwise covered by Medicare, including long-term care, vision, and dental. It is unlikely that many dual-eligible individuals who are enrolled in LTC plans would also use many benefits provided through a comprehensive MCO.

1. PCCM is a managed fee-for-service (FFS) based system in which beneficiaries are enrolled with a primary care provider who is paid a small monthly fee to provide case management services in addition to primary care. ↩︎
2. While MCOs are the predominant form of Medicaid managed care, millions of other beneficiaries receive at least some Medicaid services, such as behavioral health or dental care, through limited-benefit risk-based plans, known as prepaid inpatient health plans (PIHPs) and prepaid ambulatory health plans (PAHPs). ↩︎
3. Sparer M. 2012. Medicaid managed care: costs, access, and quality of care. Res. Synth. Rep. 23, Robert Wood Johnson Found., Princeton, NJ ↩︎
4. Daniel Franco Montoya, Puneet Kaur Chehal, and E. Kathleen Adams, “Medicaid Managed Care’s Effects on Costs, Access, and Quality: An Update,” Annual Review of Public Health 41:1 (2020):537-549 ↩︎
5. Medicaid and CHIP Payment and Access Commission (MACPAC), “Managed care’s effect on outcomes,” (Washington, DC: MACPAC, 2018), https://www.macpac.gov/subtopic/managed-cares-effect-on-outcomes/ ↩︎
6. Federal regulations require actuarially sound capitation rates that are “projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the MCO, PIHP, or PAHP for the time period and the population covered under the terms of the contract . . .” 42 CFR §438.4(a) ↩︎
7. The 85% minimum MLR is the same standard that applies to Medicare Advantage and private large group plans. ↩︎
8. The 2024 Consolidated Appropriations Act included a financial incentive to encourage certain states to collect remittances from Medicaid MCOs that do not meet minimum MLR requirements. ↩︎
9. 42 CFR Sections 438.6(c) and 438.60. ↩︎
10. Permissible under 42 CFR Section 438.6(c). ↩︎
11. In creating state directed payments (in 2016), CMS aimed to help states ensure access to adequate provider networks and to increase use of VBP arrangements. ↩︎
12. State directed payments must meet federal requirements (e.g., must be tied to utilization and delivery of services, be distributed equally to specified providers, and not be conditioned on participation in intergovernmental transfer (IGT) agreements) (42 CFR §438.6(c)). ↩︎
13. For states that newly adopt the ACA Medicaid expansion after enactment, the cap at 100% of the Medicare payment rate applies at the time coverage is implemented even for SDPs that had prior approval. ↩︎
14. The managed care rules finalized in 2024 permitted states to pay hospitals and nursing facilities at the average commercial payment rate (ACR) when using directed payments, (higher than the Medicare payment ceiling used for other Medicaid FFS supplemental payments). ↩︎
15. Specifies that the grandfathering clause only applies to SDPs in rating periods occurring 180 business days before or after enactment of the bill (July 4, 2025) and that (1) for rural hospitals, states received approval or made a “good faith effort” to receive approval prior to enactment of the bill; (2) for all other providers, states received approval or made a “good faith effort” to receive approval prior to May 1, 2025; or (3) states applied for approval prior to enactment of the bill. ↩︎
16. “Separate payment terms are a type of payment method that provides a fixed amount of directed payment funding outside of the base capitation rate. States often use separate payment terms to make large uniform rate increases…Under the 2024 managed care rule, separate payment terms will be eliminated effective for the first rating period beginning on or after July 9, 2027, and all directed payment arrangements will henceforth be required to be incorporated through capitation rate adjustments. CMS eliminated separate payment terms due to concerns that payment streams separate from capitation rates undermine the risk-based nature of managed care and are often driven by the underlying financing of the non-federal share.” Medicaid and CHIP Payment And Access Commission, “Directed Payments in Medicaid Managed Care,” October 2024 Issue Brief, p.6, https://www.macpac.gov/wp-content/uploads/2024/10/Directed-Payments-in-Medicaid-Managed-Care.pdf. ↩︎

Use of telehealth, which includes a range of health care services delivered to patients by providers at a separate location, has grown rapidly in recent years, among both privately-insured patients and Medicare beneficiaries. Prior to the COVID-19 pandemic, telehealth utilization in traditional Medicare was very low, but it rose dramatically in 2020 following temporary measures put in place at the start of the COVID-19 public health emergency that greatly expanded the scope of Medicare coverage of telehealth. Since early 2021 telehealth use has declined steadily, but it remains higher than pre-pandemic levels, with considerable variation by level of income, disability, and urban versus rural location, among other factors.

Congress has repeatedly extended several pandemic-era flexibilities around Medicare coverage of telehealth, but with a few key exceptions (discussed below), most pandemic-era telehealth flexibilities remain temporary. This leaves them vulnerable if authorization lapses, such as during the government shutdown that began on October 1, 2025, when Medicare coverage of many telehealth services briefly lapsed before being retroactively reinstated on November 12, and creates uncertainty for both providers and beneficiaries. Many of Medicare’s telehealth flexibilities were recently granted a two-year extension under the Consolidated Appropriations Act of 2026 and will remain in effect through December 31, 2027, while a handful have been incorporated into the program on a permanent basis through prior legislation and through the annual physician fee schedule rulemaking process. There is bipartisan support for proposed legislation to permanently expand Medicare coverage of telehealth, and many health care providers are supportive of keeping these services accessible, but questions remain about the longer-term impact on patient care, Medicare spending, and program integrity.

This brief provides answers to key questions about the current scope of Medicare telehealth coverage, including both temporary and permanent changes adopted through legislation and regulation, and policy considerations that lie ahead.

Key Takeaways:

• Congress has enacted legislation several times to extend Medicare’s expanded coverage of telehealth, which is currently due to expire in December 2027. Prior to the COVID-19 public health emergency, Medicare coverage of telehealth was limited to beneficiaries in rural areas and to certain types of providers, facilities, and services.
• While use of telehealth in traditional Medicare has declined since the early months of the COVID-19 pandemic, use remains nearly two times higher than it was pre-pandemic. Use is higher among urban (vs. rural) beneficiaries, beneficiaries who are dually eligible for both Medicare and Medicaid (vs. beneficiaries who are not Medicaid eligible), and beneficiaries with disabilities or end-stage renal disease (vs. beneficiaries who qualify for Medicare based on age).
• Medicare currently pays telehealth providers at different rates depending on the location of the beneficiary receiving the service. Medicare pays telehealth providers at a higher rate for telehealth services provided to beneficiaries located in their homes than for telehealth services provided to beneficiaries located in a separate clinical setting from the provider. When telehealth is provided to beneficiaries in clinical settings, Medicare also pays a separate fee for practice expenses to the facility where the beneficiary is located, which results in total Medicare payments that are generally higher relative to home-based telehealth despite the lower provider payment rate.
• Coverage rules are different in Medicare Advantage, where plans have some flexibility to offer additional benefits, including telehealth benefits, not routinely covered by traditional Medicare (outside of the current temporary flexibilities).
• Policymakers have considered legislation that would permanently expand Medicare coverage of telehealth, and are weighing the implications for Medicare spending and program integrity.

Prior to the declaration of the COVID-19 public health emergency, Medicare coverage of telehealth was largely restricted to beneficiaries in rural areas and to certain types of providers, facilities, and services. Beneficiaries were typically required to travel from their homes to an approved site, such as a clinic or doctor’s office, when receiving telehealth services. To make it easier and safer for beneficiaries to seek medical care during the pandemic, the Secretary of the Department of Health and Human Services (HHS) waived many of these restrictions in March 2020, enabling broader use of telehealth for all Medicare beneficiaries. While the pandemic-related expansion of telehealth coverage under Medicare was initially due to expire at the end of the COVID-19 public health emergency, Congress has extended these flexibilities several times, most recently through December 2027, and incorporated select provisions into the program on a permanent basis (Figure 1).

The following list summarizes key provisions related to coverage of telehealth in traditional Medicare under current law, both temporary and permanent, as well as limited changes made through the annual physician fee schedule rulemaking process. (See section below for a discussion of telehealth coverage by Medicare Advantage plans.)

Temporary Telehealth Provisions (Extended by Congress Through December 31, 2027)

• Waiver of geographic and “originating site” requirements: Telehealth is currently available to Medicare beneficiaries in both urban and rural areas, and patients can receive telehealth services from any location, including their home as the “originating site.” Prior to the expansion, telehealth coverage in traditional Medicare was generally limited to rural areas, and patients were required to travel to an approved originating site, such as a clinic or doctor’s office, when receiving telehealth services. (Providers participating in select accountable care organizations (ACOs) are permitted to waive these requirements under the Bipartisan Budget Act of 2018, and may continue to provide telehealth services without geographic restrictions, and to beneficiaries in their homes, should the current temporary flexibilities expire.)
• Expansion of covered telehealth services: Medicare currently offers coverage for an expanded set of telehealth services, including physical and occupational therapy, emergency consultations, and nursing facility care. Prior to the expansion, Medicare offered coverage for a more limited set of telehealth services, such as preventive health screenings, office visits, and psychotherapy. The Centers for Medicare & Medicaid Services (CMS) has the authority to expand the list of allowable telehealth services when there is a demonstrable clinical benefit and continues to evaluate select services for inclusion on this list. Beginning in 2026, CMS has taken steps to simplify the process of expanding telehealth coverage to new services, such as eliminating the distinction between “provisional” and “permanent” services. In past years, services were often added on a provisional basis before being considered for permanent inclusion.
• Coverage of audio-only services: Medicare currently allows many telehealth services to be provided to patients via audio-only platforms, such as a telephone or a smartphone without video. Prior to the expansion, Medicare required all telehealth services to be provided via a two-way audio/video connection, such as an interactive audio-video system or a smartphone with video enabled.
• Expansion of eligible “distant site” telehealth providers: Currently, any health care provider who is eligible to bill for Medicare-covered services can provide and bill for telehealth as a “distant site” telehealth provider and may conduct an initial telehealth visit whether or not they have treated the beneficiary previously. Additionally, federally qualified health centers (FQHCs) and rural health clinics (RHCs) are authorized to provide and bill for telehealth. Prior to the expansion, only physicians and certain other providers (e.g., physician assistants, clinical social workers, and clinical psychologists) were permitted to bill for telehealth services as the distant site provider and must have treated the beneficiary receiving those services within the last three years. FQHCs and RHCs were not authorized to serve as distant site providers but could serve as originating sites if located in a qualifying area.
• Waiver of in-person visit requirement for behavioral health: Currently, Medicare beneficiaries receiving behavioral health services may opt to receive these services via telehealth with no in-person visit requirements. The Consolidated Appropriations Act of 2021 made numerous changes to Medicare coverage of behavioral telehealth (see below), including a provision that beneficiaries must have an in-person visit with their behavioral health provider no more than six months before their initial telehealth appointment and annually thereafter. Subsequent legislation has delayed this requirement, which is currently due to take effect in January 2028.
• Use of telehealth for hospice recertification: Patient recertification for the Medicare hospice benefit can currently be conducted via telehealth, provided there is a two-way audio/video connection that allows for real-time interaction between the patient and hospice provider. Prior to the expansion, only in-person encounters could be used for the purposes of hospice recertification.

Permanent Telehealth Provisions:

• Behavioral health: The Consolidated Appropriations Act of 2021 permanently removed geographic and originating site restrictions for any telehealth service used to diagnose, evaluate, or treat a mental health disorder. (These restrictions had already been lifted for treatment of substance use disorders and co-occurring mental health disorders in 2018.) While many provisions related to Medicare telehealth coverage are due to expire at the end of 2027, Medicare beneficiaries may continue to receive behavioral health services from their homes, in both urban and rural areas, and may do so via audio-only platforms if they are unable to access a video connection or do not consent to video use. Additionally, FQHCs and RHCs are permanently allowed to serve as “distant site” telehealth providers for behavioral health services.
• Removal of frequency limitations: CMS recently finalized a provision in the 2026 Physician Fee Schedule Final Rule that permanently removes frequency limitations for subsequent inpatient visits, nursing facility visits, and critical care consultations provided via telehealth. This provision took effect on January 1, 2026. However, in the absence of further action by Congress, as of January 1, 2028 (when the current temporary flexibilities expire), implementation of this provision will be limited to the types of providers, services, and settings where telehealth was permitted before the current flexibilities were put in place.
• Virtual instruction and direct supervision: The 2026 Physician Fee Schedule Final Rule also includes provisions permanently allowing direct supervision of many procedures by physicians and other supervising providers to be conducted virtually via two-way audio/video connections as well as permanently allowing teaching physicians to instruct residents virtually in all teaching settings when overseeing services provided via telehealth. These provisions took effect on January 1, 2026. However, as with other changes made through the physician fee schedule rulemaking process, implementation of these provisions will be limited in scope after January 1, 2028 should the current flexibilities expire.

Telehealth use in traditional Medicare increased dramatically at the start of the COVID-19 public health emergency, with nearly half (46.7%) of all eligible beneficiaries receiving at least one telehealth service in the second quarter of 2020, compared to just 6.9% in the first quarter (Figure 2). While use has declined since that time, it remains nearly two times higher than pre-pandemic levels, with more than one in ten (12.5%) eligible beneficiaries receiving a telehealth service in the second quarter of 2025 (the most recent period for which data is available).

Use of telehealth services varies by geography, race and ethnicity, reason for Medicare eligibility, and dual enrollment in Medicare and Medicaid (Figure 3).

Reason for Medicare eligibility: Rates of telehealth use in 2024 were higher among beneficiaries who qualify for Medicare based on having end-stage renal disease (ESRD) (37%) or a long-term disability (36%), relative to those who qualify based on age (23%). This may be due in part to higher overall rates of service use among people with ESRD and disabilities (whether in-person or via telehealth) but may also reflect a preference for telehealth among these populations, or a greater ease of accessing care via telehealth relative to in-person care. Beneficiaries under age 65 who qualify for Medicare based on having long-term disabilities are more likely than older beneficiaries to report having three or more limitations in activities of daily living, and may be more likely to benefit from the increased flexibility of receiving health care services from their home via telehealth.

Dual-eligible individuals: Rates of telehealth use in 2024 were higher among beneficiaries dually eligible for both Medicare and Medicaid compared to Medicare beneficiaries who were not Medicaid eligible (35% vs. 23%). Dual-eligible individuals are four times more likely than other Medicare beneficiaries to live on incomes of less than $20,000. Prior studies have found that having lower income or living in a socioeconomically deprived neighborhood is associated with higher rates of telehealth use, suggesting that telehealth may have the potential to improve health care access for beneficiaries with limited access to in-person services.

Geography: Rates of telehealth use in 2024 were higher among beneficiaries living in urban areas than those in rural areas (26% vs. 19%), which may be due in part to disparities in access to broadband and other communication technologies. Beneficiaries in rural or underserved areas may lack the infrastructure to support reliable video telehealth visits or the means to afford internet access, which may further impede access to telehealth if coverage of audio-only services is reduced or eliminated.

Race and ethnicity: Rates of telehealth use in 2024 were highest among Asian and Pacific Islander (30%) and Hispanic (29%) beneficiaries, and somewhat lower among Black (26%), American Indian or Alaska Native (24%), and non-Hispanic White beneficiaries (24%). Given that beneficiaries of color are more likely than non-Hispanic White beneficiaries to report difficulty accessing needed health services, telehealth use may help to improve access to care for certain groups.

As of January 2024, Medicare pays for telehealth services based on the location of the beneficiary. Medicare pays providers at a higher rate for telehealth services provided to beneficiaries who are located in their homes and a lower rate for telehealth services provided to beneficiaries who are located in a separate clinical setting (i.e., originating site) (with that lower rate being the same regardless of whether the clinical setting is a doctor’s office or a facility, such as a rural health clinic). According to CMS, the higher rate paid by Medicare for telehealth services provided to beneficiaries in their homes better reflects the practice expenses of providers in mental health and certain other specialties who provide a significant share of their services via telehealth, but also maintain an office for in-person services, an arrangement that became common after the telehealth expansion allowed for greater numbers of beneficiaries to access telehealth from home.

However, when beneficiaries receive telehealth services in clinical settings, such as a rural health clinic, Medicare makes a separate payment to the originating site (the “facility fee”) to reimburse for the cost of practice expenses, and the telehealth service provider is reimbursed at a lower rate that solely reflects the cost of the service itself. This results in total Medicare payments that are generally higher when beneficiaries receive telehealth in clinical settings despite the lower payment to the telehealth service provider.

In contrast, Medicare pays for most in-person services based on the location of the provider. For services furnished in a non-facility setting, such as a doctor’s office, providers are reimbursed at a higher rate that reflects the cost of some practice expenses as well as reimbursement for the service itself (equivalent to the rate paid for telehealth services provided to beneficiaries in their homes). For services furnished in a facility setting, such as a hospital outpatient department, providers are solely reimbursed for the service provided (equivalent to the rate paid for telehealth services provided to beneficiaries in clinical settings), and practice expenses are reimbursed directly to the facility as a separate facility fee. As in the case of clinic-based telehealth, the addition of the facility fee means that total Medicare payments are generally higher for facility- than non-facility-based services, though the provider portion of these payments is smaller.

Medicare Advantage plans are required to cover all Part A and Part B benefits covered under traditional Medicare, and have some flexibility to offer additional benefits as well, including telehealth benefits not routinely covered by traditional Medicare (outside of the current telehealth expansion), such as telehealth services provided to enrollees in their own homes, services provided outside of rural areas, and services provided through audio-only platforms.

Since 2020, Medicare Advantage plans have been permitted to include the costs associated with select telehealth services in their basic Medicare Part A and B benefit package, and may continue to do so after December 2027 regardless of the status of the temporary telehealth expansions in traditional Medicare. Telehealth services may be included in a plan’s basic benefits package if they meet certain requirements, such as coverage under Medicare Part B when the same service is provided in person. When these requirements are not met, plans may continue to offer supplemental telehealth benefits via remote access technologies and/or telemonitoring services, but must cover the cost of these benefits using rebates or supplemental premiums.

While Congress has enacted legislation to extend temporary telehealth flexibilities in Medicare since 2023, there has been little movement on bills that would permanently extend these flexibilities. For example, the CONNECT for Health Act of 2025, introduced by Senator Schatz, would permanently implement several key pandemic-era telehealth flexibilities, such as the removal of geographic and originating site requirements and the broad expansion of providers eligible to offer telehealth, but has not been scheduled for a vote.

Trump administration officials, including CMS Administrator Dr. Mehmet Oz, have voiced support for the use of telehealth and other health technologies to increase access to health care services and promote treatment of chronic disease. The upcoming Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model from the Center for Medicare & Medicaid Innovation (CMMI) will test the impact of new payment options designed to incentivize the use of technologies such as telehealth platforms, wearable devices, and health care apps for prevention and management of certain chronic conditions, though these payment options will be temporary and limited to the performance period of the model.

Finally, at the state level, certain states have taken action to develop multi-state licensure compacts, which have allowed for additional flexibility related to licensure in participating states. Medicare providers are generally required to be licensed in any state where they are practicing, and this requirement extends to telehealth. In most cases, a distant site telehealth provider must be licensed in the state where the beneficiary receiving services is located when the telehealth visit takes place, but multi-state licensure compacts can extend these permissions to a wider area. These compacts are formed when states agree upon a uniform standard of care and enact state laws which allow qualified providers to practice across state lines while maintaining a single license, to maintain multiple licenses, or which expedite the process of gaining additional licensure across member states. These compacts may be continued beyond December 2027, though other restrictions may limit their use if the current flexibilities are allowed to expire.

As policymakers weigh whether to permanently implement current flexibilities around Medicare coverage of telehealth, several questions have been raised about the impact of telehealth services on patient care quality and program spending, as well as the potential for fraud and overuse.

Since the current flexibilities were introduced, state and federal agencies have filed several lawsuits regarding the submission of fraudulent claims by telehealth companies to Medicare and other insurers. However, investigations by the HHS Office of the Inspector General (OIG) into provider billing patterns during the first year of the COVID-19 pandemic found that just 0.2% of providers who billed for a telehealth service during the period engaged in excessive billing patterns that posed a high risk to the Medicare program, and clinicians generally complied with Medicare requirements when providing Evaluation and Management services through telehealth, suggesting little evidence of widespread misuse to date. MedPAC has recommended that CMS take certain precautions going forward, such as applying additional scrutiny to “outlier” clinicians who deliver more telehealth services than others and requiring in-person visits before high-cost tests and medical equipment are paid for.

The impact of expanded telehealth coverage on Medicare spending is difficult to assess, as it depends on several factors. Some telehealth services may replace in-person care, as in the case of behavioral health visits, but easier access to telehealth may also lead to an overall increase in use of services and higher costs. Prior research has found modest increases in clinical encounters and spending per person among Medicare beneficiaries in geographic areas and health systems with higher rates of telehealth use. At the same time, there is evidence to suggest that beneficiaries with greater access to telehealth services may have fewer emergency department visits and improved adherence to certain medications. Additional research could help policymakers and other interested parties assess the degree to which any increases in Medicare spending as a result of expanded telehealth coverage are offset by improvements in quality of care or decreases in other costs, such as spending on preventable hospital admissions and other types of acute care services.

The Congressional Budget Office (CBO) scored the extension of current telehealth flexibilities through December 2027 under the Consolidated Appropriations Act of 2026 as costing $3.8 billion from 2026 to 2028. CBO has not yet scored the cost of recent legislative proposals, such as the CONNECT for Health Act of 2025, that would implement these flexibilities on a permanent basis.

About the Survey

At the end of 2025, despite a government shutdown over the policy, the enhanced premium tax credits expired, decreasing financial assistance for subsidized Marketplace enrollees and contributing to significant increases in the Affordable Care Act (ACA) Marketplace costs for most enrollees overall. Amid the debates leading up to the expiration, KFF conducted a probability-based survey of 1,350 adults covered by ACA Marketplace plans in late 2025 to better understand their worries about potential cost increases for their health coverage. Now—without the enhanced tax credits in place—KFF re-interviewed 1,117 individuals (more than 80% of the original sample) to learn how they are navigating these changes to the ACA Marketplace. 

This report is based on all 2025 Marketplace enrollees who took the follow-up survey, including returning Marketplace enrollees¹, those who have left the Marketplace entirely for another type of coverage, and those who are now uninsured.

Summary of Findings

Half of those who have re-enrolled in ACA Marketplace coverage say their health care costs are “a lot higher” this year. Following the expiration of the enhanced premium tax credits and an open enrollment period that left many Affordable Care Act (ACA) Marketplace enrollees feeling “worried” and “angry,” most of those who have re-enrolled in Marketplace coverage now report paying more for coverage. A large majority (80%) of returning Marketplace enrollees say their 2026 plan’s premiums, deductibles, or coinsurance and co-pays are higher than last year, including half (51%) who say they are “a lot higher.”

ACA Marketplace enrollees worry about affording their monthly premiums, as well as out-of-pocket expenses such as emergency care or routine medical visits. With many returning Marketplace enrollees reporting higher costs this year, majorities express worry about affording both routine and unexpected medical care. Three in four (73%) returning Marketplace enrollees say they are “very worried” or “somewhat worried” about being able to afford costs for emergency care or hospitalizations while about half are worried about affording costs for routine medical visits (49%) or prescription drugs (45%). Worries are even greater among those with lower incomes and those with chronic health conditions. In addition, one in six (17%) returning Marketplace enrollees say they are not confident they will be able to afford their monthly health insurance premium for the entirety of 2026. This is even as a quarter of those who switched plans say they downgraded their plan’s metal tier (e.g. from a Silver plan to a Bronze plan) in 2026, which generally have lower premiums but typically have higher out-of-pocket costs.

Health care costs are straining household budgets. Among 2025 Marketplace enrollees who have re-enrolled in Marketplace coverage, many report that their health care costs are putting pressure on household budgets. A majority (55%) of returning Marketplace enrollees say they are (or will be) cutting back spending on food or basic household items in order to afford the costs of coverage and care. The impact is even harder for returning enrollees with chronic health conditions, with 62% saying they are, or will be, cutting back on food and other household items in order to help them afford their health care costs.

Some previous ACA Marketplace enrollees are now uninsured or have changed to a different Marketplace plan, citing costs as the major reason for that decision. One in ten (9%) 2025 Marketplace enrollees say they are now currently uninsured and three in ten (28%) say they switched to a different Marketplace plan. When asked the reasoning behind their change, a larger share say costs were the driver rather than changes to their health care needs. A 34-year-old man living in Texas put it this way, “The prices are simply too high. $800/month for the absolute cheapest plan for two people. Our income is $120k, so we don’t qualify for subsidies in Texas. I don’t think we could afford our mortgage if I had to pay for health insurance.”

Health care costs may be a deciding factor for ACA Marketplace enrollees in the 2026 midterm elections. With health care costs front and center for 2025 Marketplace enrollees, many who are registered to vote say that the cost of health care will have a major impact on their decision to vote (48%) and which party’s candidate they will support (49%) in the midterm elections. The issue currently resonates more with Democrats, who are more than twice as likely as Republicans to say health costs will play a major impact on their decision to vote in the 2026 midterms (67% vs. 27%) and on which candidate they decide to vote for (70% vs. 30%).

Where Are They Now? Coverage Changes Among 2025 Marketplace Enrollees

The Follow-Up Survey of ACA Marketplace Enrollees finds most (69%) 2025 enrollees say they have re-enrolled in Marketplace coverage for 2026, including four in ten (39%) who say they are enrolled in the same plan they had in 2025 and nearly three in ten (28%) who have switched to a different Marketplace plan. This is largely consistent with the 2025 survey findings in which a third said they would be “very likely” to look for a different Marketplace plan if their premiums doubled.

Additionally, about three in ten 2025 Marketplace enrollees now say they no longer have Marketplace coverage, including 22% who transitioned to a different source of coverage, such as through an employer, by becoming eligible for programs like Medicare or Medicaid, or say they have now purchased a non-Marketplace health insurance plan (some of which may provide less comprehensive coverage and have fewer consumer protections than Marketplace plans). One in ten (9%) 2025 Marketplace enrollees say they are currently uninsured. A large amount of churn on and off the Marketplace is normal as ACA Marketplace coverage is often a temporary source of coverage between jobs, and because income, age, and other circumstantial changes can make people newly eligible for other public programs such as Medicaid or Medicare.

Notably, half (49%) of younger 2025 Marketplace enrollees between the ages of 18 and 29 report having left the Marketplace entirely, including 14% who say they are currently uninsured. In contrast, smaller shares of older 2025 Marketplace enrollees—ages 50 and up—say they are currently uninsured (7%). Additionally, younger 2025 enrollees are also more likely than their older counterparts to say they have left the Marketplace for another source of coverage—which would be expected with life changes such as starting a new job, getting married, or experiencing a change in income. Significant shares of younger adults having left the Marketplace in 2026 is consistent with previous KFF policy analysis on the expiration of the enhanced tax credits, which attributes part of this year’s increases to insurers anticipating healthier (e.g. younger) adults exiting the Marketplace, creating an enrollee base that is more expensive on average.

Among those who still have a Marketplace plan, one in six (17%) returning enrollees say they are “not too” or “not at all” confident they will be able to afford their insurance premiums for all of 2026. This may put them at risk of losing their Marketplace coverage at some point this year.

Additionally, 4% of returning Marketplace enrollees say they have yet to pay their first premium for 2026. Notably, returning enrollees who receive tax credits to help pay for their coverage are generally provided with a 3-month grace period for nonpayment of premiums, meaning most may have until the end of March to pay any premiums that are due before facing the retroactive termination of their health insurance coverage.

Costs Are a Major Reason Why Enrollees Switched to a Different Marketplace Plan or Dropped Coverage

Almost four in ten (37%) 2025 enrollees are either uninsured or switched to a different Marketplace plan. When asked the reasoning behind their change, a larger share say costs were the driver rather than changes to their health care needs. Eight in ten say they made a change to their coverage because it was too expensive, including seven in ten (71%) who say this was a “major reason” and one in ten (9%) who said it was a “minor reason.” Just over a third (36%) say changing health needs were a major or minor reason why they changed plans or dropped their Marketplace coverage.

Many 2025 enrollees who switched Marketplace plans this year say their previous plans’ premiums increased dramatically when selecting coverage for 2026. Additional reasons for changing plans include their old plans no longer being available and general dissatisfaction with their previous plan.

Health Care Costs Weigh Heavily on the Now Uninsured

Among the 9% of 2025 enrollees who say they are currently uninsured, survey responses indicate that the cost of health care played a major role in their decision to drop coverage, and many from this group report worrying about affording medical care.

Many 2025 enrollees who are now uninsured cite fears about accessing and affording care in the case of unexpected medical emergencies. Some who have significant health issues say their main worry about not having health insurance is being unable to afford necessary medications and treatment.

Health Care Costs Contribute to Affordability Worries and Challenges Among Returning Marketplace Enrollees

Following the expiration of the ACA enhanced premium tax credits in December 2025, a large majority (80%) of returning Marketplace enrollees say their health care costs are higher this year compared to 2025. This includes half (51%) of returning enrollees who say their health care costs—whether it be their premiums, deductibles, and/or their coinsurance and co-pays—are “a lot higher” compared to last year.

About six in ten (63%) returning Marketplace enrollees say their monthly health insurance premium is higher than 2025, including 40% who say it is “a lot higher.” In addition, nearly half say their deductibles are higher (45%, including 24% who say they’re “a lot higher”), and one-third say their coinsurance and co-pays are higher compared to last year (36%, including 18% “a lot higher”).

Increases in insurance plan cost-sharing are pronounced among those who say they switched their Marketplace plan this year. Over half (54%) of returning enrollees who switched plans say their deductibles are higher this year compared to last year (including 34% who say “a lot higher”), and an additional four in ten (42%) say their coinsurance and co-pays are higher (25% “a lot higher”). This likely reflects the fact that some enrollees switched to lower tier Bronze plans which may mitigate some of the increase in premiums but typically have higher out-of-pocket costs. Overall, a quarter (26%) of plan switchers say they downgraded their metal plan (e.g. from a Silver plan to a Bronze plan) in 2026.

While most 2025 Marketplace enrollees say they still have Marketplace coverage in 2026, having insurance does not insulate them from worrying about the costs of accessing care. About three in four (73%) returning Marketplace enrollees say they are “very worried” or “somewhat worried” about being able to afford costs for emergency care or hospitalizations while about half are worried about affording costs for routine medical visits (49%) or prescription drugs (45%).

At least seven in ten returning Marketplace enrollees across income groups say they are worried about being able to afford costs for emergency care or hospitalization. However, those with lower incomes are more likely than their higher-income counterparts to worry about being able to afford prescription drugs. Those with chronic conditions are more likely than those without such conditions to worry about affording emergency care, routine care, and the cost of prescription medications.

Rising health care costs can place considerable pressure on household budgets and create additional financial strain. Just over four in ten (44%) returning Marketplace enrollees say their health care costs have made it harder to afford other expenses, including over a third (37%) who say it has made it more difficult to afford food and groceries and about three in ten who say it has made it more difficult for them to afford their monthly utilities (32%), their rent or mortgage (30%), or gasoline or other transportation costs (30%)

About half of returning Marketplace enrollees with lower household incomes and those with chronic health conditions report that their health care costs are placing financial strain on other expenses.

A majority (55%) of returning Marketplace enrollees say they have already, or are planning to, cut back spending on food or basic household items in order to cover any health care related costs. Around four in ten (43%) say they have already or are planning to find an extra job or work more hours to cover health expenses, while about two in ten are skipping or delaying paying other bills (23%) or taking out loans or increasing their credit card debt (20%). Notably, while one in five returning enrollees say they are already looking for another job or trying to find more hours, an increase in income could help them afford their premium or deductible payments, but it could also mean they become eligible for less financial assistance.

Returning Marketplace enrollees with chronic conditions are among the most likely to report taking steps to cover their costs, with about six in ten (62%) saying they have or plan to cut back on spending, half (52%) saying they have or plan to work more, a third (33%) saying they will skip or delay paying bills, and a quarter (26%) saying they will take out a loan or increase their credit card debt.

Open Enrollment Process Left Many Marketplace Enrollees Worried and Angry

Following the expiration of the enhanced premium tax credits for ACA Marketplace coverage, many 2025 Marketplace enrollees say they felt worried or angry as they went through the process of evaluating their health insurance options for 2026. Nearly two-thirds (63%) of 2025 Marketplace enrollees say they felt “worried” during the process of looking for coverage while about half (52%) say they felt “angry.” Nearly half (46%) say the process made them feel “confused,” while nearly four in ten (37%) say they were “satisfied” during the process of looking for insurance coverage for this year.

Reactions to the Expiration of Enhanced Premium Tax Credits

In a recent KFF Health Tracking poll, a majority of the public overall said Congress did the wrong thing by letting the enhanced premium tax credits for people who buy their insurance on the ACA Marketplace expire. Unsurprisingly, 2025 Marketplace enrollees share this sentiment, with eight in ten (78%) saying that Congress did the wrong thing by letting the credits expire, while two in ten say Congress did the right thing.

Majorities of 2025 Marketplace enrollees across partisanship agree that Congress did the wrong thing, including nearly all Democrats (94%), eight in ten independents, and six in ten Republicans (58%). Even among Trump’s base—Republicans and Republican-leaning independents who support the MAGA (Make America Great Again) movement—a majority (54%) say that Congress did the wrong thing by letting the credits expire.

When asked how they feel about the expiration of the enhanced premium tax credits, many 2025 Marketplace enrollees express anger, frustration, and disappointment. While some are fine with the expiration or note that it has not impacted them, many are upset at the rise in their own insurance costs and the government’s failure to extend the credits.

Among all 2025 Marketplace enrollees, about six in ten (62%) place the most blame on either President Trump (32%) or Republicans in Congress (30%), while a smaller share (14%) say Congressional Democrats deserve the most blame. Two in ten think Congress did the right thing by letting the tax credits expire.

While very few Democratic 2025 Marketplace enrollees blame their own party (3%) for the expiration of the enhanced tax credits, three in ten Republicans, including two in ten MAGA-supporting Republicans, place the most blame on either President Trump or Republicans in Congress.

Potential Political Impacts of Higher Health Care Costs Among Marketplace Enrollees

When it comes to increases in their own health care costs, returning Marketplace enrollees blame lawmakers alongside health insurance and pharmaceutical companies.

Among the eight in ten returning Marketplace enrollees who say their premiums or cost-sharing are higher this year, seven in ten say health insurance companies deserve “a lot” of blame for the increase. Although the public perceive health insurance companies as a major source of blame for their cost increases, lack of action by Congress in extending the tax credits is attributed as the main cause of increases in premiums and other costs according to KFF policy analysis. Majorities of returning Marketplace enrollees also say Republicans in Congress (54%), President Trump (53%), and pharmaceutical companies (52%) deserve “a lot” of blame for the increase in their health care costs. A third (34%) of returning Marketplace enrollees who report having higher health care costs say Democrats in Congress deserve “a lot” of blame. Fewer place “a lot” of blame on hospitals (30%), doctors (12%), or employers (8%). Notably, around half or more of those who report that their premiums, deductibles, or coinsurance and co-pays are higher this year than last year place at least some blame on each of the groups asked about.

Across partisanship, at least two-thirds of returning Marketplace enrollees whose health care costs (including premiums, deductibles, or coinsurance and co-pays) are higher now than last year say health insurance companies deserve “a lot” of blame, and around half or more place “a lot” of blame for their increased costs on pharmaceutical companies. However, when it comes to lawmakers, there is a predictable partisan division. Among returning Marketplace enrollees with higher health care costs than last year eight in ten or more Democratic enrollees place “a lot” of blame on President Trump (83%) and on Congressional Republicans (80%) for their increased costs. In contrast, six in ten returning Republican enrollees who now have higher health care costs place “a lot” of blame on Democrats in Congress, as do MAGA supporting Republican enrollees.

Health care costs may impact enrollees’ decisions at the ballot box this November, and in some congressional districts, the number of Marketplace enrollees could be enough to swing close elections. Three-quarters of 2025 Marketplace enrollees who are registered to vote say the cost of health care will have a “major impact” or “minor impact” on their decision to vote (73%) and which party’s candidate they will support (74%) in the midterm elections. Majorities of voters across partisanship say health care costs will impact their voting decisions, however Democrats are more than twice as likely as Republicans to say it will have a major impact on their decision of whether to vote (67% vs. 27%) and on which party’s candidate they will support (70% vs. 30%). At least four in ten independent voters say that health care costs will have a major impact on their decision to vote (47%) and who they decide to vote for (44%).

Beyond being motivated to vote, some enrollees have taken actions to discuss their rising health care costs with friends and family, online, or by directly contacting an elected official. Three-quarters (76%) of 2025 Marketplace enrollees have discussed the cost of health insurance with friends or family, including similar shares across partisanship. However, few report taking further action, including one in seven (14%) who have contacted an elected official by phone, mail, internet, or in person to discuss the cost of health insurance and one in nine (12%) who have posted on social media about the cost of health insurance.

Democrats are more likely than Republicans to say they have contacted an elected official (17% vs. 10%) or have posted on social media about the cost of their coverage (16% vs. 7%).

This KFF Follow-Up Survey of Marketplace Enrollees was designed and analyzed by public opinion researchers at KFF. The survey was conducted February 12- March 2, 2026, online and by telephone among a nationally representative sample of 1,117 U.S. adults who had Marketplace insurance in 2025 in English (n=1,079) and in Spanish (n=38). The sample is entirely derived from people who completed the KFF Marketplace Survey in 2025 (n=1,350). 

The original sample was recruited using two probably-based panels, the SSRS Opinion Panel and the IPSOS Knowledge Panel. The SSRS Opinion Panel is a nationally representative probability-based panel where panel members are recruited randomly in one of two ways: (a) Through invitations mailed to respondents randomly sampled from an Address-Based Sample (ABS) provided by Marketing Systems Groups (MSG) through the U.S. Postal Service’s Computerized Delivery Sequence (CDS); (b) from a dual-frame random digit dial (RDD) sample provided by MSG. For the online panel component, invitations were sent to panel members by email followed by up to three reminder emails. The IPSOS Knowledge Panel is a nationally representative probability-based panel where panel members are recruited randomly through invitations mailed to respondents randomly sampled from an Address-Based Sample (ABS) through the U.S. Postal Service’s Computerized Delivery Sequence (CDS). The follow-up sample included 842 individuals from SSRS Opinion Panel and 264 reached through the Ipsos Knowledge Panel. 

An additional 11 adults who were previously recruited to complete a KFF survey in 2024-2025 and were reached via their prepaid cell phone number. A small group of these individuals reported that they had Marketplace coverage in 2025.  Among this prepaid cell phone component, 4 were interviewed by phone and 7 were invited to the web survey via short message service (SMS). 

Respondents in the prepaid cell phone sample who were interviewed by phone received a $15 incentive via a check received by mail. Respondents in the prepaid cell phone sample reached via SMS received a $10 electronic gift card incentive. SSRS Opinion Panel respondents received a $5 electronic gift card incentive (some harder-to-reach groups received a $10 electronic gift card). Ipsos operates an incentive program that includes raffles and sweepstakes with both cash rewards and other prizes to be won. An additional incentive is usually provided for longer surveys. In order to ensure data quality, cases were removed if they failed two or more quality checks: (1) attention check questions in the online version of the questionnaire, (2) had over 30% item non-response, or (3) had a length less than one quarter of the mean length by mode. Based on this criterion, there were 2 cases removed. 

The combined recontacted cell phone and panel samples were weighted to match the sample’s demographics to the national U.S. adult population aged 18-64 who are currently covered by direct-purchase insurance using data from the Census Bureau’s 2025 Current Population Survey (CPS). The demographic variables included in weighting are Sex by Age, Education, Sex by Education, Age by Education, Race/Ethnicity, Census Region, Number of Adults in Household, Home Tenure (Own/Rent), and residence in a Medicaid Expansion state. Additionally, the weights account for differences in the probability of selection for each sample type (prepaid cell phone, IPSOS Knowledge Panel, and SSRS Opinion Panel). This includes adjustments for ownership of a prepaid cellphone, the design of the panel-recruitment procedure (IPSOS Knowledge Panel and SSRS Opinion Panel), and propensity to complete the recontact interview. 

The margin of sampling error including the design effect for the full sample is plus or minus 3.8 percentage points. Numbers of respondents and margins of sampling error for key subgroups are shown in the table below. For results based on other subgroups, the margin of sampling error may be higher. Sample sizes and margins of sampling error for other subgroups are available on request. Sampling error is only one of many potential sources of error and there may be other unmeasured error in this or any other public opinion poll. KFF public opinion and survey research is a charter member of the Transparency Initiative of the American Association for Public Opinion Research.

1. This survey includes 794 returning Marketplace enrollees: respondents who say they are currently enrolled in the Marketplace, irrespective of whether they effectuated their enrollment. Some returning Marketplace enrollees may retroactively lose their health coverage for 2026 if they do not make their first premium payment. ↩︎