On September 15, 2025, the Centers for Medicare and Medicaid Services (CMS) released a Notice of Funding Opportunity (NOFO) for the $50 billion Rural Health Transformation Program (referred to here as the “rural health fund”). The Notice describes what states need to do to apply for funds, the deadline for state applications, and the criteria that CMS will use to determine how funds will be allocated. The rural health fund was established by the tax and spending reconciliation law of 2025.  It was created to help offset the impact on rural areas of the law—which includes an estimated $911 billion in federal Medicaid spending reductions over the next ten years, including an estimated $137 billion in rural areas based on KFF estimates—particularly given ongoing concerns about the financial vulnerability of many rural hospitals and reports of hospital closures. Distribution of the funds will begin before many of the Medicaid cuts under the reconciliation law take effect.

To receive any funds, states must submit complete applications that align with program requirements by November 5, 2025. CMS will decide which applications to approve by December 31, 2025. Half of the fund, $25 billion, will be allocated equally among states with approved applications, without regard to the state’s rural population or the needs of rural hospitals and other providers in the state. The other half, $25 billion, will be distributed among approved states based on a variety of factors specified in law and in the NOFO, such as the number of rural residents and health facilities, the relative amount of uncompensated care in the state, the quality of workforce and other state initiatives supported by the  rural health fund, and the extent to which states adopt Make America Healthy Again (MAHA) policies. CMS will recalculate the allocation of this second tranche annually over the five-year period of funding primarily based on the progress of state initiatives and policy changes.By law, DC and the U.S. territories are ineligible for the rural health fund. 

Although the Notice provides additional information, there are several outstanding questions, such as whether all states will receive funds, what share of the $50 billion will go to the about 1,800 hospitals in rural areas versus other providers and various state initiatives, and  the extent to which the direct and indirect benefits for rural hospitals will offset their losses under the reconciliation law. The NOFO details the factors affecting how funds will be allocated across approved states, but CMS will continue to influence the distribution through ongoing evaluation of state initiatives and policy changes and decisions over whether to reduce, withhold, or recover funds from states for noncompliance and other reasons. Further, while federal law requires CMS to disclose state award amounts, neither the reconciliation law nor the NOFO explicitly directs CMS or states to publish timely information about administration and oversight, such as state applications or progress reports, which could make it difficult to track the distribution of dollars from the fund.   

This brief describes five key takeaways from the rural health fund NOFO, including information about how CMS intends to review state applications and distribute funds and ongoing questions about the impact on rural hospitals, the distribution of funds across rural hospitals and states, and issues related to oversight and transparency.

CMS will distribute $25 billion equally across states with approved applications and the remaining $25 billion based on numerous factors, some more data driven than others

Of the $50 billion in the fund, half ($25 billion) will be distributed equally among states with approved applications (called “baseline funding”) and half ($25 billion) will be distributed among approved states based on a number of factors (called “workload funding”).  A merit review panel of experts will review all applications that pass initial checks to determine whether an application is eligible for funding and to score the factors that determine how the second half will be allocated across eligible states. It is unclear from the NOFO who will sit on the merit review panel or what role agency appointees will play in reviewing state applications.  The Trump administration issued an executive order in August 2025 requiring, among other things, that all discretionary grants be reviewed annually by senior appointees, which would presumably apply to the rural health fund, though the NOFO is silent as to what role such appointees will have.

CMS will distribute the workload funding (the second $25 billion) across states based on 23 factors, weighted to varying degrees, as detailed in the NOFO (see Appendix Table 1 for more details). Of these 23 factors, three are based on measures specified in the reconciliation law, while the remaining 20 were added by CMS. The 23 factors include data-driven measures of the rural population, rural health facilities, and other state characteristics, such as the relative amount of hospital uncompensated care; state proposed initiatives; and state policies:

• Rural population, rural health facilities and other state characteristics. About half (53%) of the workload funding will be distributed across states based on published, historical data about the number of rural residents and health facilities in a state and other state characteristics (see Figure 1).  Multiple indicators have a rural focus, such as the size of the state’s rural population (used to distribute 10% of workload funding) and the number of rural health facilities (a blend of hospitals and other facilities) in the state (used to distribute 10%). Other measures are not explicitly focused on rural areas, such as hospitals’ uncompensated care as a percent of operating expenses (used to distribute 10%) and the share of hospitals in the state that receive Medicaid DSH payments (used to distribute 3%). Most of these data factors will be calculated once and used during all subsequent allocation decisions and will not reflect changes over time (such as in uncompensated care).
• State proposed initiatives. About a third (32%) of the workload funding will be distributed based on CMS’s review of the initiatives the state is proposing to fund. This is a qualitative review based on the state’s plan and, in later years, the state’s progress in implementing the plan. Not all of the initiatives allowed under the rural health fund will be considered for the allocation, but the NOFO lays out those that will be taken into account, such as initiatives related to population health clinical infrastructure (used to distribute 3.75% of the workload funding), health and lifestyle (used to distribute about 2.8%), rural provider strategic partnerships (used to distribute 3.75%), and talent recruitment (used to distribute 3.75%).
• State policies. Less than one fifth (15%) of the workload funding will be distributed based on whether a state has adopted, made progress towards adopting, or committed to adopting certain policies. Some of these policies aim to promote competition among health care providers, such as by not having certificate of need (CON) laws (used to distribute 1.75% of the workload funding), making it easier for providers to practice in multiple states (used to distribute 1.75%), and providing an expansive scope of practice for nurse practitioners and other non-physicians (used to distribute 1.75%). Among other factors, three measure states’ progress in implementing certain MAHA policies (used to distribute about 6.4%) (see next section). All of the scored policies reflect state-wide changes that are not specific to rural areas. 

Almost all factors will be used in allocating funding in each program year, but CMS will reevaluate state initiatives under the rural health fund and state policies over time before calculating the distribution of funds each year.

CMS may also choose to withhold, reduce, or recover baseline and workload funding from a given state if, for example, it determines that there is a violation of the state’s agreement. Funding after the first budget year may be contingent on a state’s progress and whether CMS decides that continued funding “is in the government’s best interest.” The law indicates that there will be no administrative or judicial review of these and other funding decisions made by CMS.

States will receive more funds if they adopt Make America Health Again (MAHA) policies.

States that have adopted certain MAHA policies will receive a larger share of the $25 billion workload funding (see above). States can also receive a partial increase if they have taken steps to implement these policies or have committed to doing so. These policies are not limited to rural areas and include requiring schools to reestablish the Presidential Fitness Test; prohibiting SNAP spending on non-nutritious items, like soda or candy; and requiring that nutrition be included in continuing medical education for physicians.

CMS also indicated the importance of the MAHA agenda for the rural health fund by including “make rural America healthy again” as one of its five strategic goals, which correspond to permitted uses of the funds. CMS describes this goal as supporting “rural health innovations and new access points to promote preventative health and address root causes of diseases.” CMS will also consider the quality of certain state MAHA initiatives under the rural health fund when deciding how to distribute funds across states, such as through a factor focusing on “health and lifestyle.”

While the $50 billion fund could help rural communities in a number of ways, the extent to which it will benefit rural hospitals and offset their losses under the reconciliation law is unclear

The rural health fund will “support…rural communities to improve healthcare access, quality, and outcomes through system transformation” according to the Notice, rather than providing general financial support exclusively to hospitals and other providers to use as they see fit. Further, CMS states that the “intent of this funding is not to be used for perpetual operating expenses, but rather for investments that can be made within the duration of the program that will have sustainable impact beyond the end of the program.”

States will be allowed to use the funds for a number of purposes (see Appendix Table 2), most of which are intended to improve the rural health care delivery system and how care is delivered. For example, states could use the funds to promote prevention and chronic disease management interventions, support collaboration among rural health care facilities (such as by sharing administrative services) and between rural providers and regional health systems, recruit clinical workers to rural areas, promote technological advancements (such as by expanding telehealth or promoting AI diagnostic tools), invest in existing hospital buildings and infrastructure, help hospitals determine which services should and should not be maintained, and support the adoption of value-based care and alternative payment models. It is also possible that some of the funds could flow to nonrural areas within a state.

In addition to specifying permitted uses of the funding, CMS has also detailed ways in which the funds cannot be used, many of which are particularly salient for hospitals and other providers. For example, rural health funds cannot be used for:

• Payments to providers for care that exceed 15% of total funds. Payments to providers also cannot be used to supplement existing fees, such as for Medicaid, or pay for care that is reimbursable by insurance, but they could be used to pay for, say, uncompensated care.
• Construction, building expansion, or purchasing buildings, but can be used for certain investments in existing rural health care facility buildings and infrastructure, not to exceed 20% of total funds.
• Replacements for previous HITECH-certified electronic medical record (EMR) systems that exceed 5% of total funds.
• Funds for gender-affirming care (a limitation that is not restricted to care for minors, as are many other federal measures) and reimbursement for most abortion services. There are also limitations related to “citizenship documentation requirements for payments made with respect to an individual.” Many hospitals do not currently collect patient immigration status but may need to do so to be reimbursed for patient care with rural health funds.

While the fund was established in part to address concerns about rural hospitals and closures, the extent to which it will benefit these facilities and offset losses under the reconciliation law is unclear. Although approval of state applications is ultimately up to CMS, states can choose how much of the funds will go to hospitals versus other rural providers and various other entities, such as contractors providing technical assistance for projects, universities participating in workforce initiatives, regional health systems in urban areas collaborating with rural providers, and vendors developing new health technologies.

Funds that flow to rural hospitals will need to be used for at least one of the approved purposes, rather than providing general financial support. Further, CMS has capped the amounts of funds that can be sent to hospitals and other providers for certain approved purposes, such as paying for patient care or investing in existing buildings and infrastructure (see above). The structure of the rural health fund contrasts with the federal government’s response to COVID-19, when it provided large amounts of support to providers to alleviate the financial impact of the pandemic.

Some initiatives intended to transform the rural health care delivery system could benefit hospitals to varying degrees. For example, among other initiatives with more direct implications for hospitals, funds could be used to strengthen collaboration among rural facilities and other rural providers, which could help rural hospitals operate more efficiently. Other initiatives, such as programs to promote health literacy and healthy behaviors, would have less direct implications for hospitals. The benefit to rural hospitals—and to other providers, patients, and rural communities—will also depend on how effective these initiatives are, which is difficult to predict.

Rural areas and hospitals will likely see many of the benefits from the rural health fund before the cuts under the reconciliation law take full effect. The law provides $10 billion through the rural health fund per year from fiscal years 2026 through 2030—and all funds must be spent before October 1, 2032—while nearly two thirds (64%) of the ten-year reductions in federal Medicaid spending would occur after fiscal year 2030 based on KFF’s analysis of CBO estimates. Additionally, the rural health fund will be temporary, while many of the cuts in health spending are not time limited, meaning that the longer-term impact on rural areas and hospitals could be less favorable. CMS requires states to include a sustainability plan in their applications and intends for these initiatives to promote lasting change, but the extent to which that will occur after the funds dry up is unclear.

It remains unclear which states and rural hospitals will benefit the most

While the NOFO includes many new details about how the funds will be distributed across states, questions remain about which states will receive funding, the final distribution across approved states, and how well this distribution will align with various definitions of need. The first $25 billion will be distributed equally among approved states, meaning that smaller states will benefit more relative to their size. For the second $25 billion in funding, most, if not all, of the allocation factors will benefit some states more than others. For example:

• 10% of the distribution is based on uncompensated care as a percent of hospital operating expenses, which tends to be higher in states that that have not expanded Medicaid under the Affordable Care Act.
• 5% of the distribution is based on the geographic size of a state, which will benefit the five largest states (Alaska, Texas, California, Montana, and New Mexico) by definition (the remaining 45 states will receive zero points for this factor).
• 3.75% of the distribution is based on a state’s progress in obtaining a waiver to prohibit the purchase of non-nutritious foods using Supplemental Nutrition Assistance Program (SNAP) benefits. Nearly all of the 12 states with approved waivers to date are states that President Trump carried in the 2024 election.

At the same time, CMS’s approach for evaluating rurality and other data-driven metrics moderates differences across states by focusing on rankings rather than raw differences. For instance, Alaska is more than twice the size of Texas, but Alaska’s score for the geographic factor will not be much higher than Texas’s score because Alaska and Texas are ranked next to each other.

It is also unclear how the benefits will be distributed across rural hospitals. This will depend in part on how CMS distributes funds across states (see above); how states in turn distribute these funds across hospitals, other providers, and various initiatives; and which hospitals states target. For example, states could distribute funds to rural hospitals broadly or target specific groups of rural hospitals, such as those in financial distress, in high-need areas, or that state policymakers prioritize for other reasons. Relatedly, there are also questions of how narrowly or broadly states will define “rural”, which CMS leaves to their discretion and could potentially encompass few or many hospitals, including hospitals that might not be viewed as rural by some (such as urban hospitals that receive a rural designation for certain payments). States could also use the funds for a variety of initiatives that could benefit some hospitals more than others, such as by attracting clinicians to certain, specific rural areas of the state.

It is unclear how transparent CMS and states will be about the distribution and oversight of the fund, such as by disclosing the flow of dollars to specific hospitals and other entities.

The reconciliation law and NOFO are silent on how transparent CMS and states will need to be about the distribution and oversight of funds. For example, it is unclear whether states will disclose to the public which specific hospitals and other entities are receiving how much money and for what purpose, both ahead of time and as funds go out the door. That information would be useful for understanding the effectiveness of the fund, such as whether funds are going to hospitals in need that serve as a critical access point for patients versus wealthy facilities. Some of this information may be available in state applications and progress reports, though it is unclear whether the agency will post these materials online or require states to do so. Those materials will include numerous other details that could be useful for monitoring the rural health fund, such as a description of rural health needs in a given state, an overall rural health transformation plan, details about each state initiative, key stakeholders, outcomes that will be evaluated, and state progress.

It is also unclear how much transparency there will be regarding other aspects of the program, such as the members of the merit review committee responsible for evaluating applications; modifications to state plans over time; CMS’s rationale for reducing or recovering rural health funds or reallocating funds over time;  and state remediation plans for noncompliance. CMS retains broad discretion over whether to continue to fund states by considering criteria such as whether “continued funding is in the government’s best interest” and whether states are “improperly managing or using award funds, including fraud, waste, abuse, and criminal activity.”

Some of this information may be disclosed through existing regulation (e.g., CMS will be required to publicly disclose the amount it awards to each state) and Freedom of Information Act (FOIA) requests submitted by journalists and other groups.

Introduction

Data are a cornerstone for efforts to improve health and health care, including addressing disparities. Federal data can act as “essential infrastructure,” with policymakers and institutions relying on demographic, geographic, and health outcomes data, among others, to make important decisions around resource allocation. Data are important for identifying health status and needs, including disparities; directing efforts and resources to address needs and disparities as they are identified; assessing the impacts of policy changes; and establishing accountability. Without adequate data, health needs and disparities may remain unseen and unaddressed. Further, lack of reliable and transparent data can erode public trust in government institutions, negatively impact willingness to participate in future federal data collection efforts, and make policy implementation challenging.

The Trump administration has taken actions to eliminate equity-related initiatives and has removed federal data from online sites, deleting sociodemographic variables from datasets, and has delayed the release of some data. This policy watch reviews recent changes in availability and timeliness of federal data based on a review of publicly available federal datasets that are commonly used to measure health and health care as of August 2025. The identified changes, which largely include removal of data or variables relating to race or ethnicity or sexual orientation and gender identity (SOGI), may not be exhaustive as they focus on a subset of federal datasets and since several datasets are being modified on an ongoing basis. Looking ahead, there are likely to be continued declines in the availability and timeliness of federal data. While most changes have affected racial or ethnic or SOGI data to date, other domains could be affected in the future.

Decreased availability of federal data may impede efforts to identify and address health needs and disparities, trend changes in health and health care among different groups over time, and impact how resources are allocated, which could lead to overall declines in the nation’s health and productivity.

Recent Federal Actions on Data Availability and Research

The Biden administration took several steps to increase the availability of disaggregated federal data to advance health equity. For example, in March 2024, the Office of Management and Budget (OMB) announced revisions to Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity, which apply to federal data collection and reporting. These revisions were the first ones issued since 1997. The OMB indicated that they were intended to result in more accurate and useful race and ethnicity data across the federal government and to better represent the increasing diversity of the U.S. population. The administration also issued several Executive Orders and Equity Action Plans aimed at “advancing equity and racial justice” which included “building accountability for equity through data collection and reporting” by federal agencies. The Biden administration also prioritized equity and enhanced data collection for Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex (LGBTQ) people through its Executive Orders.

In contrast, the Trump administration has taken actions to eliminate equity-related initiatives, including eliminating policies, initiatives, and research focused on specific populations, including people of color and transgender or gender non-conforming people. On the first day of his second term, President Trump signed Executive Order 14148 which revoked 78 executive orders and memoranda issued by the Biden administration, many related to diversity, equity, and inclusion (DEI) and LGBTQ equity and data collection. Additionally, Executive Order 14168 impacted data collection, data presentation, and distribution related to transgender people as it directs the “removal of all statements, policies, regulations, forms, communications, or other internal and external messages that promote or otherwise inculcate gender ideology, and shall cease issuing such statements, policies, regulations, forms, communications or other messages.” President Trump also issued Executive Order 14151 and directives that mandate federal agencies to terminate all DEI related offices and positions; equity action plans, actions, initiatives or programs; equity-related grants or contracts; and DEI performance requirements for employees, contractors, or grantees. To carry out the Executive Orders, the Office of Personnel Management (OPM) directed agencies and departments to take down all outward facing media that “inculcate or promote” “gender ideology,” as well as to remove all public facing DEI related websites and content, though due to court order, at least some of this appears to have been restored.

The Trump administration also restructured and made major reductions in staffing that may limit resources available to support data collection and reporting. On March 27, 2025, the Trump administration announced a restructuring of the U.S. Department of Health and Human Services (HHS) that led to a large “Reduction in Force” among federal staff, including cutbacks to programs and staff working on data collection, research, and enforcement.

The Trump administration also made significant funding cuts to research on health disparities, cancer, and climate change, among others, which may reduce data available to understand health and drivers of disease as well as effective interventions. In February 2025, the administration announced billions of dollars in funding cuts for medical research at hospitals and universities. The administration also announced the cancellation of National Institute of Health (NIH) grants for health disparities research, as part of larger NIH grant cuts totaling over $1 billion as of July 2025. Further, funding and staff cuts at the National Cancer Institute (NCI) could impact cancer research. The administration has also canceled over 100 climate change-related research projects at the National Science Foundation (NSF). Further, in their budget request to Congress, the administration has requested additional cuts to NIH.

Recent Changes in Availability of Federal Data

During the early days of the second Trump administration, federal agencies removed thousands of publicly available datasets and/or public health webpages, although they were largely returned following legal challenges. These removals included data from the U.S. Census Bureau, the Environment Protection Agency (EPA), and the Centers for Disease Control and Prevention (CDC), among others. Following legal challenges, much of the data have since been restored; however, there have been some changes made to variables and information, particularly data on gender identity, and in some cases sexual orientation. Many federal websites include messages indicating that data are being updated to comply with Trump administration priorities and also to comply with ongoing legal challenges (Box 1).

KFF review of major federal health datasets as of August 2025 shows that certain sociodemographic variables have been removed from some datasets or reports, including racial and ethnic and gender identity data. Some examples of removals or changes to racial and ethnic data include:

• Detailed racial and ethnic data broken out by other factors such as an individual’s age and/or sex collected by the CDC’s National Center for Health Statistics (NCHS) Data Query System (DQS) had been removed for a number of health indicators including but not limited to infant, neonatal, and post-neonatal mortality rates; recent substance use among youth; and heart disease death rates.
• Racial and ethnic data also were omitted from the 2024 annual report for the National Survey on Drug Use and Health (NSDUH), despite being included in earlier annual reports as well as being a focus of prior companion reports.
• The diversity module containing federal workforce data broken out by race and ethnicity was removed from the most recent version of the quarterly workforce report from the OPM. In addition, the OPM has not updated its quarterly workforce data since September 2024.

Examples of changes to or removals of SOGI data include:

• Several federal datasets such as the CDC’s heart disease mortality data and the Behavioral Risk Factor Surveillance System (BRFSS), among others, were briefly taken down and then republished after renaming the “gender” variable to “sex”.
• Questions related to gender and gender identity have also been removed from recent BRFSS data, including questions about respondents’ sex at birth and whether they identify as transgender.  
• The Trump administration stopped collecting gender identity data through the Medicare Current Beneficiary Survey, which had begun collecting these data in 2023.
• The Health Resources and Services Administration’s (HRSA) Uniform Data System (UDS) also removed data elements related to SOGI going back to 2016 when the UDS first started including SOGI questions. UDS is used to report program data for community health centers funded by HRSA which are disproportionately more likely to serve patients from historically marginalized and disadvantaged communities.

Availability of federal data to measure health and health care may become more limited moving forward due to staffing and other changes. For example, the future of the Pregnancy Risk Assessment Monitoring System dataset, considered a “gold standard” for understanding maternal and infant health and related disparities, is uncertain given the HHS staff cuts impacted the entire team overseeing it. Further, President Trump recently fired the Commissioner of the U.S. Bureau of Labor Statistics (BLS). Several economists have called into question the objectivity of future BLS data following the appointment of a new Commissioner from a conservative think tank. In September 2025, the Agriculture Department announced that it will cancel future surveys measuring food insecurity in U.S. households, which has been measured since the 1980s. Additionally, President Trump recently suggested excluding undocumented immigrants from the 2030 Census, which would no doubt be challenged as unconstitutional and conflicts with longstanding standards for conducting population tallies using the Census dating back to 1790. An informational copy of the 2025 American Community Survey published by the U.S. Census Bureau does not reflect the most recent OMB updates to racial and ethnic data collection. It still includes separate questions to ascertain Hispanic origin and race as opposed to a single combined question and also does not include a Middle Eastern or North African (MENA) category. Given the Trump administration’s actions on SOGI research thus far, there also may be reductions in the availability of SOGI data moving forward.

President Trump signed into law a budget reconciliation package that made major reductions in federal health care spending to offset part of the costs of extending expiring tax cuts. The Congressional Budget Office’s (CBO) latest cost estimate shows that the reconciliation package would reduce federal Medicaid spending over a decade by an estimated $911 billion and increase the number of uninsured people by 10 million, with three quarters of the change stemming from cuts to Medicaid. These reductions could have implications for people with intellectual and developmental disabilities (I/DD) as people with I/DD disproportionately rely on Medicaid.

I/DD include various disabilities such as intellectual disabilities, autism, developmental delays, and learning disabilities. These disabilities are usually present at birth or manifest during childhood and affect the trajectory of the individual’s physical, intellectual, and/or emotional development. Loss of Medicaid coverage or benefits poses unique challenges for people with I/DD, many of whom live on fixed incomes, face barriers to employment and accessing private health coverage, and have high health care needs and spending. People with I/DD are distinct from many other populations who need long-term care as they rely on a broad range of services and supports across the lifespan, while most others who use long-term care often develop care needs later in life. These needs can include assistance with activities of daily living (such as bathing and dressing) and instrumental activities of daily living (such as shopping or cooking), employment-related services, positive behavior supports, and supervision when completing tasks.

According to estimates by the National Council on Disability (NCD), there are at least eight million people in the U.S that have I/DD, though that is likely an underestimate. Other estimates of total number of people in the U.S with I/DD range widely, from eight million to sixteen million people. It is difficult to estimate the exact number because there is no current survey that asks a nationally representative population whether they have an I/DD. The estimated prevalence of I/DD is higher among children than among adults in the U.S., with the NCD noting that about 4% of U.S. children and 2% of U.S. adults have an I/DD (though these rates are much lower than the rate of I/DD in the National Health Interview Survey, which are closer to 14% among U.S. children).

1. Children account for 8 in 10 nonelderly Medicaid enrollees with intellectual or developmental disabilities.

In 2021, there were 3.4 million Medicaid enrollees under age 65 with I/DD, 82% of whom were children under 19 (Figure 1). Medicaid offers additional benefits to children with I/DD beyond what is available to children enrolled in private health insurance and often what is available to adult Medicaid enrollees. This makes Medicaid a key source of coverage for children with I/DD. Under the Early and Periodic Screening, Diagnostic and Treatment (EPSDT), states must provide children with screening for health and developmental problems and with all services needed to diagnose and treat their health conditions, regardless of whether the services are covered for adults or if they are otherwise not covered by the state. States also offer an array of additional optional benefits for people with I/DD through Medicaid waivers, including private duty nursing, specialized therapies, home/vehicle modifications, and more. Those benefits are generally not covered by private insurance.

2. Among nonelderly Medicaid enrollees with I/DD, most children qualify on the basis of low incomes, while most adults qualify based on disability.

Over two-thirds (68%) of children with I/DD qualify for Medicaid on the basis of low income alone, compared with fewer than one in four nonelderly adults with I/DD (24%). The remaining 32% of children and 76% of nonelderly adults with I/DD qualify on the basis of disability. Qualifying on the basis of disability requires demonstration of limited income, limited savings, and meeting disability requirements. Beyond requiring additional information from applicants, KFF’s survey of states on their eligibility practices has shown that qualifying on the basis of disability tends to have more cumbersome application and renewal processes. Both children and nonelderly adults with I/DD are more likely to qualify for Medicaid through a disability-related pathway than are children and nonelderly adults without I/DD (among whom only 9% qualify for Medicaid on the basis of disability, data not shown).

Child eligibility remains the highest for all income-based eligibility pathways, with a median eligibility level of 255% FPL, or $67,957 for a family of three. This is a key reason why most children with I/DD are eligible on the basis of income while most adults under age 65 are not. In general, children with disabilities are eligible for all of the pathways available to nonelderly adults with disabilities, though eligibility criteria may differ between children and nonelderly adults and be less restrictive for children. The ACA expansion pathway was created to provide coverage to low-income adults under age 65 without requiring another eligibility factor like disability. This pathway has helped some nonelderly adults with I/DD maintain access to services which are only covered through Medicaid programs, such as long-term care. However, some provisions in the reconciliation package target those enrolled through the ACA expansion, putting this coverage at risk.

Many state Medicaid agencies set their age cut-offs for child pathways between 19 and 21, but children with special health care needs, including I/DD, often need the care that the Medicaid program provides throughout their lifetime. As people transition out of child Medicaid eligibility, they often encounter barriers to maintaining coverage because of the lower adult income eligibility levels. Among those who continue to qualify for Medicaid, they may lose access to benefits that are particularly critical for children with I/DD and only available through the EPSDT benefit (which is only available for people under age 21 in all states). Families of children with special health care needs who are aging out of child benefits report that there is frequently a lack of clear information available to them and that they are often unprepared for the transition. 

3. About 729,000 nonelderly people with I/DD use Medicaid long-term care, nearly all (700,000) of whom use home care.

Over one in ten child enrollees with I/DD and over half of nonelderly adult enrollees with I/DD use long-term care, nearly all of which is home care. Medicaid is the primary payer for long-term care in the U.S, and most people who use Medicaid long-term care use home care. Medicaid home care can be offered through either the Medicaid state plan or as part of a specialized waiver. Nearly all states (48) provide Medicaid home care through waivers that offer benefits specifically targeted to people with I/DD. These waivers may provide a range of services including supported employment; equipment, technology, and modifications; home-based services; day services; non-medical transportation; round-the-clock-services; personal care services; and home-delivered meals. Some home care waivers for children are age-limited and end after they turn 21 (or younger). While some waivers define transition of care services and transition plans, many do not. Some states may offer similar waivers for adults, though benefits may differ and enrollment may not be guaranteed due to limited availability of waiver slots. In Medicaid home care, many people “self-direct” their services, allowing them to provide payments to family caregivers in some cases. Beyond paying for their caregiving, Medicaid supports family caregivers with services such as training, support groups, and respite care (which is paid care that allows family caregivers to take a break from their normal responsibilities). 

Very few Medicaid enrollees with I/DD use long-term care in institutional settings such as nursing facilities or intermediate care facilities. Nursing facility care is a required Medicaid benefit, in contrast with home care, which is provided at state option. Care at intermediate care facilities (a type of institutional care that is often targeted towards people with I/DD) is also optional for states to provide, but all states offer it. Most people with I/DD using institutional long-term care are in intermediate care facilities (data not shown).

4. Nearly three-quarters of the total Medicaid home care waiver waiting list population have I/DD, or about 521,000 people.

A state’s ability to cap the number of people enrolled in home care waivers can result in waiting lists when the number of people seeking services exceeds the number of waiver slots available. Waiting lists provide an indication of people who may need services they are not receiving, but they are an incomplete measure of unmet need because they don’t include people with unmet needs in states that do not cover the applicable services (and therefore, have no waiting list) or people who are in the waiver but not receiving services because there are too few providers available. Waiting lists reflect the populations a state chooses to serve, the services it decides to provide, the resources it commits, and the availability of workers to provide services. People with I/DD comprise almost three-quarters (73%) of the total home care waiver waiting list population, and reflect a higher share of people in states that do not screen for waiver eligibility before placing someone on a waiting list (89% in in the eight states that do not screen for eligibility and 49% in the 32 states that do screen for eligibility).

5. Medicaid enrollees with I/DD incur higher Medicaid costs and have higher rates of chronic conditions than those without I/DD.

Medicaid spending for people with I/DD is disproportionately high. Among Medicaid enrollees under 19, Medicaid spends, on average, about four times more annually on those with I/DD when compared to those without I/DD ($12,571 vs $3,073). Similarly, among Medicaid enrollees 19-64 years old, those with I/DD have spending seven times higher than those without I/DD ($50,086 vs. $6,873). With an unprecedented reduction in federal Medicaid spending, states will face pressure to reduce Medicaid costs and may look at approaches to reduce spending among high-cost populations, such as those with I/DD. States may also face pressure to restrict eligibility criteria for optional eligibility groups or reduce coverage of optional benefits such as home care, both of which could disproportionately affect people with I/DD.

The higher spending among those with I/DD reflects both greater use of long-term care and overall, more health care use on account of other chronic conditions. Medicaid enrollees under 12 with I/DD are nearly twice as likely to have another chronic condition as those without I/DD (19% vs. 11%) (Figure 5). Similarly, those ages 12-18 with I/DD are also more likely to have chronic conditions than those without I/DD (51% vs. 29%). This group is also over twice as likely to be diagnosed with a behavioral health condition, such as those related to mental health and substance use disorders (37% vs 17%).Enrollees ages 19-64 with I/DD are also more likely to have a chronic condition as those without I/DD (67% vs. 42%); twice as likely to be diagnosed with a behavioral health condition (46% vs. 23%); and twelve times as likely to be diagnosed with a physical health condition (24% vs 2%) (data not shown).

On July 4, 2025, President Trump signed into law the 2025 budget reconciliation bill, formerly known as the One Big Beautiful Bill Act, that makes significant changes to Medicaid eligibility and financing. The Congressional Budget Office estimates the law will cut federal Medicaid spending by $911 billion over 10 years and will increase the number of people who are uninsured by 10 million in 2034.

One source of the law’s Medicaid cuts is a 10-year moratorium on implementation or enforcement of provisions in two rules finalized by the Biden administration that would have reduced administrative burdens to make it easier for people to enroll in and maintain Medicaid and CHIP coverage (See Box 1). In effect, the law delays or pauses implementation of many provisions in the two rules until October 2034. To ease the administrative burden on states, the implementation dates for the changes in the rules spanned a three-year period, with some provisions taking effect in 2024 or 2025 and others with implementation dates in 2026 and 2027. Some provisions are excluded from the 10-year delay, including those that have already taken effect.

While the provisions in the final rules involve numerous technical changes to eligibility, enrollment, and renewal policies, collectively, they aim to streamline complex processes that make it difficult for individuals to enroll in Medicaid and CHIP coverage and maintain that coverage, and, therefore, would increase projected enrollment over time. The delay in implementing provisions in these final rules along with other provisions in the law, such as new work and reporting requirements and more frequent eligibility determinations for individuals enrolled in the Affordable Care Act’s (ACA) Medicaid expansion, will increase administrative barriers (or red tape) to Medicaid and CHIP that are projected to result in fewer people enrolling in coverage and many people losing coverage. While some of the people who lose coverage from these changes are no longer eligible, it is expected that most of the projected enrollment declines will be among people who are eligible.

While the law prohibits the Secretary of the Department of Health and Human Services (HHS) from implementing or enforcing provisions subject to the delay until October 1, 2034, it does not prohibit states from implementing the changes. In some cases, states have already made the changes required by the rules, either in anticipation of implementation of the new requirements or as part of other efforts to streamline or simplify processes. Whether states maintain or rollback the changes they are no longer required to keep in place will influence how much the budget reconciliation law’s delay affects Medicaid coverage and federal spending.

This issue brief describes the impact of delaying key provisions from those rules on federal Medicaid spending and coverage; and identifies which provisions across both rules are not delayed and which are. Where available, it also indicates how many states have already implemented provisions that are now delayed. 

Estimated Impact on Federal Medicaid Spending and Coverage

The Congressional Budget Office (CBO) estimates that delaying certain provisions in the two rules will reduce federal spending by $122 billion over ten years and increase the number of people without health insurance by 400,000 in 2034. Delaying provisions is projected to save the federal government $66 billion from the MSP rule and $56 billion from the E&E rule over ten years. These combined reductions in federal spending represent about 12% of the total reductions in federal Medicaid spending from the law. CBO estimates that the delayed provisions will increase the number of people without health insurance by 400,000 in the year 2034, but the impact on the number of people enrolled in Medicaid will be higher. Some Medicare beneficiaries who are eligible for MSP and would have enrolled in Medicaid because of provisions in the MSP rule will not enroll in Medicaid. However, these individuals will retain their Medicare coverage and will not become uninsured. Although CBO did not provide a detailed analysis of the impact on Medicaid enrollment, an earlier analysis of the House-passed version of the bill showed that 1.3 million fewer “dual eligible individuals” (people who are enrolled in both Medicaid and Medicare) would be enrolled in Medicaid in 2034. Because of differences in the version of the bill passed by the House and the final enacted law, the drop in the number of dual eligible individuals may be lower.

Medicare Savings Program Rule 

Provisions That are not Delayed

The only provision in the MSP rule that is not delayed took effect October 1, 2024 and requires all states to automatically enroll Supplemental Security Income (SSI) recipients into the Qualified Medicare Beneficiary (QMB) Medicare Savings Program (MSP) (Table 1). SSI provides monthly payments to older adults and people with disabilities who are unable to work and have limited income and resources. The Medicare Savings Programs provide Medicaid coverage of Medicare premiums, and in most cases, cost sharing to low-income Medicare beneficiaries. The QMB program is one of the four types of Medicare Savings Programs, and pays for Part A and B premiums, deductibles, coinsurance, and copayments. Medicare beneficiaries are eligible for the QMB program if their monthly income is below the FPL ($1,304 per month for an individual and $1,763 per month for a couple in 2025) and if their assets are below the resource limit ($9,660 for individuals and $14,470 for couples in 2025). 

The rule notes that because the income and resource eligibility criteria for the QMB group exceeds those for SSI, individuals who qualify for SSI will always meet the requirements for QMB eligibility. The automatic enrollment of SSI recipients into the QMB program increases enrollment among eligible people by allowing them to avoid the administrative burden of separate eligibility processes. 

Provisions That are Delayed

The law delays several provisions that would facilitate MSP enrollment using the Medicare Part D Low-Income Subsidy (LIS) data. The Medicare Part D Low-Income Subsidy (LIS) is a program that helps Medicare beneficiaries pay for prescription drugs. To increase participation in LIS, people who enroll in an MSP are automatically enrolled in LIS, but not all people in LIS are automatically enrolled in an MSP. The Medicare Improvements for Patients and Providers Act of 2008 requires the Social Security Administration (SSA) to send LIS applications to states and for states to treat those data (e.g., “LIS data”) as an application for the MSPs, but not all states do so.

The rule strengthens the requirement for states to treat LIS data as an application for the MSPs by establishing clear steps for states to take upon receiving the data from the SSA and prohibiting states from requiring a separate application for MSP. The rule also requires states to provide LIS applicants with information about the availability of full Medicaid benefits and the opportunity to apply for those benefits.

The law delays provisions that encourage states to use the Medicare Part D LIS definitions of financial eligibility. A barrier for states in using LIS data to initiate an application to the MSPs is that the two programs have different methods for measuring income and financial resources. For example, the MSPs include certain types of income and assets that are excluded from the LIS definition and that can be cumbersome for applicants to document. States also often use different definitions of family size when calculating income eligibility for MSP purposes than those used for LIS eligibility. 

The rule encourages states to align LIS and MSP eligibility criteria by requiring states to use the LIS definition of family size (unless the state definition is more generous) and by creating incentives for states to adopt the definitions of financial eligibility used in the LIS program. States that elect to keep their methods for defining financial eligibility rather than using the LIS criteria, will be required to accept applicants’ self-reported information for any income and assets that are not included with the LIS application. States must enroll in the MSP all applicants whose self-reported financial information meets state eligibility criteria unless they have data that are incompatible with the self-reported information. When states require additional information from applicants, they will be required to take a more active role in helping applicants find the information, such as contacting financial or fiduciary institutions on behalf of applicants.

The law pauses a provision that requires Qualified Medicare Beneficiary (QMB) coverage to begin earlier for certain Medicare beneficiaries who do not qualify for free Part A premiums through their own earnings or those of a spouse, parent, or child, and must pay the Medicare Part A premium. Currently, some people who do not qualify for premium-free Part A may have to pay the premium out-of-pocket before QMB coverage begins and may be unable to qualify for QMB coverage if they are unable to afford the premium (ranging from $285 or $518 per month in 2025 depending on people’s work history). This occurs for people who did not enroll in Part A when they first became eligible for Medicare and live in states that do not have a “buy-in” agreement with the federal government. A “buy-in” agreement allows states to enroll eligible people directly into Medicare on a year-round basis and pay their monthly premiums. In states without such agreements, people may only enroll in Part A during the annual general enrollment period between January 1 and March 31. Under the rule, states will be required to start QMB coverage and payment of Part A premiums for eligible applicants after the SSA receives a conditional application for Part A, so applicants will not have to pay premiums prior to gaining coverage. 

Medicaid, CHIP, and Basic Health Plan Eligibility and Enrollment Rule 

Provisions That are not Delayed

The rule eliminates barriers to CHIP coverage for children, including lockout periods for nonpayment of premiums, waiting periods, and annual or lifetime limits on coverage, effective June 2025. Prior to the rule, states had the option to lock children out of coverage in separate CHIP programs for nonpayment of premiums by preventing reenrollment for a specific period. States were also allowed to impose waiting periods in separate CHIP programs that required children to be uninsured for a certain period of time, usually 90 days, before enrolling in CHIP coverage, and could impose annual and lifetime dollar limits on CHIP benefits. The rule prohibits coverage lockout periods for nonpayment of premiums, waiting periods, and any dollar limits on CHIP benefits.

The rule also seeks to improve transitions between Medicaid and separate CHIP programs to reduce gaps in coverage for children. Without coordination between Medicaid and CHIP programs, children whose family income or circumstances change and must transition from one program to another are at risk of experiencing delays in enrollment in the other program or gaps in coverage during the transition. As of June 2024, Medicaid and CHIP agencies are required to accept eligibility determinations from the other program and provide a joint eligibility notice to reduce confusion for families whose children are moving from one program to the other. 

Another enrollment simplification policy in the rule that has taken effect is ending the requirement that applicants apply for other benefits as a condition of Medicaid eligibility. Under previous policy, states were required to evaluate individuals’ available income and resources for other benefits they may qualify for, such as annuities or pensions before determining eligibility for Medicaid. The rule removes the requirement for enrollees/applicants to apply for other benefits that do not impact an individual’s eligibility for Medicaid or CHIP. The rule redefines available income and resources to only include resources the individual is in immediate control of. 

The rule also reduces burdens for applicants by limiting requests for documentation to verify assets. When determining Medicaid eligibility, states are required to check available data sources for income information and must apply a reasonable compatibility standard, which specifies the acceptable level of variance between an individual’s self-reported income and the income information returned from available data sources before requesting additional documentation from an individual. While these rules apply to income verification, the requirements for verifying assets were less clear. The rule clarifies that states must use available data sources to verify assets for applicants subject to an asset test, which includes most people who apply on the basis of age or disability. States must also apply a reasonable compatibility standard when verifying assets. If asset information provided by an individual is reasonably compatible with information returned through an asset verification system, the state may not request further documentation from the individual. 

The rule allows states to permit applicants for medically needy coverage to prospectively deduct new types of medical expenses. People may qualify through a medically needy pathway if their income is higher than permitted under a different pathway but lower than the medically needy limit, or if they “spend down” to the medically needy limit by deducting health care expenses from their income. Previously, individuals applying through the medically needy pathway could only prospectively deduct medical expenses for institutional care. The rule allows individuals who are not in institutional settings to deduct prospective medical expenses, such as home care and prescription drugs, when applying for Medicaid coverage through the medically needy pathway.

To enhance program integrity, the rule updates requirements for how and how long states must maintain case records. Outdated regulations that do not specify what information from case records state must maintain have led to inconsistencies in recordkeeping across states and have contributed procedural payment errors captured in CMS’ annual Payment Error Rate Measure (PERM) rates because of insufficient documentation. The rule specifies that states must maintain records for all eligibility determinations in an electronic format, clarifies what information must be contained in the records, and requires that records be kept for a minimum of three years. These provisions take effect in June 2027 and were the only provisions in the rule that were not subject to the delay in implementation even though they had not yet been implemented.

Provisions Subject to the Moratorium on Implementation

The law pauses implementation of provisions that align renewal policies for individuals eligible through MAGI and non-MAGI pathways. The ACA created consistent, streamlined application and renewal policies for individuals who qualify for Medicaid based on modified adjusted gross income (“MAGI”); however, these policies were not extended to “non-MAGI” enrollees who qualify for Medicaid based on old age or disability. The rule requires states to extend the streamlined MAGI procedures to non-MAGI individuals. These include eliminating in-person interviews as part of eligibility determinations, requiring states to renew coverage no more frequently than every 12 months, requiring that non-MAGI applications and forms be accepted through the same modalities as MAGI applications and forms, and requiring states to send pre-populated renewal forms to non-MAGI enrollees whose ongoing eligibility cannot be confirmed through available data sources. As of January 2025, all states have stopped in person interviews, 47 states offer applications and forms to non-MAGI applicants in all the same modalities as forms sent to MAGI applicants, and 37 states send pre-populated renewal forms to non-MAGI enrollees. 

Provisions to clarify state and enrollee requirements when changes in enrollee circumstances occur were also paused. States are required to redetermine eligibility when reported or identified changes in circumstances may affect an individual’s eligibility. If information is needed from the individual to complete a redetermination, states are required to give enrollees a minimum of 10 days to respond to these requests. Unlike individuals who lose coverage at their regularly scheduled renewal, individuals disenrolled for failure to provide additional information relating to a change in circumstance are not given a 90-day reconsideration period during which they can submit information confirming ongoing eligibility and have their coverage reinstated.

The rule updates and clarifies steps states must take in responding to changes in circumstances. It specifies that if a state identifies a change in circumstance that may affect an enrollee’s eligibility, the state must first attempt to verify the change with available data. If there is not sufficient data to verify the change, the state must contact the enrollee and request additional information and must provide the enrollee with at least 30 calendar days to respond to the request. The rule also requires states to provide a 90-day reconsideration period if an enrollee is disenrolled for failure to provide the requested information. As of January 2025, 7 of the 15 states that conduct periodic data checks to identify changes in circumstances already provide at least 30 calendar days for enrollees to respond to requests for additional information. 

The law delays implementation of updates to state performance and timeliness standards for eligibility determinations at application that apply these standards to eligibility redeterminations at renewal and following changes in circumstances. Current rules require states to develop performance and timeliness standards for determining eligibility at application. States are required to complete eligibility determinations at application within 90 days for people applying on the basis of disability and 45 days for all other applicants. The rule extends the performance and timeliness standards to eligibility redeterminations at regularly scheduled renewals and following identification of changes in circumstances.

Other provisions that are delayed include more efficient data matching, required state processes to respond to returned mail, and clarification of continued benefits during renewal periods. The rule simplifies eligibility verification by allowing for verification of citizenship with a State vital statistics agency or DHS SAVE to be considered evidence of citizenship that does not require additional documentation. When a state receives returned mail with no forwarding address, the rule establishes a three-step process where the state must check reliable sources for updated address information; if updated information is unavailable, take additional steps to confirm the enrollee’s address using modalities other than mail; and if unable to contact the enrollee, move the enrollee to a fee-for-service delivery system, suspend coverage, or terminate coverage. The rule clarifies that states must provide continued enrollment and benefits to enrollees during a review if the state fails to make a timely eligibility redetermination.

Overview

Employer-sponsored health insurance (ESI) is the primary source of health coverage for working non-elderly adults, but adults working part time (fewer than 35 hours per week) have less access to these benefits than their full-time counterparts. Among non-elderly adults employed by public or private employers (excluding the self-employed), 18.5 million, or 14% of adult workers, work part time. This report examines the characteristics of part-time workers and their access to employer-sponsored health benefits.  

Part-time workers—particularly those living in households without a full-time worker—are less likely to be offered health coverage and less likely to be enrolled in an employer plan, either through their own employer or as a dependent on someone else’s plan. Part-time workers who do not have employer coverage may be eligible for Medicaid or for subsidized coverage in the Affordable Care Act (ACA) Marketplaces. However, recent cuts in these coverage programs included in the Republican tax and spending law, as well as the potential expiration of enhanced Marketplace tax credits, will make it harder for individuals who may not have access to an affordable, job-based plan to find coverage. 

Who are Part-Time Workers? 

Workers cite a wide range of reasons for usually working part-time. Some of the most common include enrollment in school or a training program (30%); family or personal obligations, including childcare obligations (26%); and having a job where full-time work is less than 35 hours per week (19%). Smaller shares report working part time because they are unable to find full-time work (7%) or due to illness, health, or medical limitations (4%).  

Generally, part-time workers can be broken into two categories: those working part time for economic reasons (such as inability to find work or seasonal declines in demand), and those working part time for non-economic reasons (such as medical limitations, childcare responsibilities, family or personal obligations, retirement, or jobs where full-time work is less than 35 hours per week). For this analysis, workers enrolled in school or training programs are treated as a separate category due to their large share of the part time workforce. The analysis focuses on non-elderly adult workers who usually work part time; it excludes full-time workers who happened to be working part time at the time of the survey. 

On average, part-time workers are younger than full-time workers (35 years old vs. 41 years old) and are more likely to be women (66% vs. 46%). More than half (52%) of part-time workers earned a high school diploma (or equivalent) as their highest level of education. Compared to full-time workers, part-time workers are less likely to have earned a bachelor’s degree (27% vs 44%), or a postgraduate degree such as a master’s or doctorate degree (9% vs 16%). 

Part-time workers are more likely than full-time workers to have household incomes below twice the federal poverty level (30% vs. 13%), which is about $30,120 for a single person and $62,400 for a family of four. At the same time, part-time workers are not a homogeneous group; many live in households with higher incomes. Specifically, 42% of part-time workers have household incomes above 400% of the federal poverty level (about $124,800 for a family of four), and 24% have incomes above 600% of the poverty level (about $187,200 for a family of four). 

Where do Part-Time Workers Work? 

About one in three part-time workers (33%) are employed in service occupations. More specifically, the most common occupations are food preparation and food service-related roles (15%), followed by office and administrative support (13%), sales (12%), transportation and material moving (9%), and education, training, and library occupations (9%). The most common jobs among part-time workers are cashier, waiter, retail salesperson, and personal care aide. 

Among the major industry categories, 31% of part-time workers are employed in education, health care, or social assistance; 21% work in the arts, entertainment, recreation, or food services industry; and 17% are in wholesale and retail trade. The most common industries for part-time workers overall are restaurants and other food services; elementary and secondary schools; colleges, universities, and professional schools; hospitals (excluding facilities specifically for psychiatric and substance abuse); and supermarkets or other grocery stores. 

What Share of Part-Time Workers Have a Full-Time Worker in the Household? 

Sixty-five percent of part-time workers live in a household with a full-time adult worker. Those living with a full-time worker are much less likely to have a household income below 200% of the federal poverty level compared to those without at least one full-time worker in their household (18% vs. 52%). 

What is the Health Insurance Coverage of Part-Time Workers ?

Compared to full-time workers, part-time workers are less likely to have employer-based health coverage, either through their own workplace or as a dependent on another plan. They are also less likely to work for an employer that offers health coverage to any of their employees. If a part-time worker is working for an employer that offers coverage, they are less likely to be eligible to enroll in that coverage. 

Fifty-four percent of part-time workers have employer-based health coverage, compared to 78% of full-time workers. Notably, part-time workers living in a household without a full-time worker are much less likely to have employer-based coverage (36%) than those in households with at least one full-time worker (63%). Only 19% of part-time workers have employer-based coverage from their own jobs, compared to 62% of full-time workers. 

Overall, part-time workers are more likely to be uninsured than their full-time counterparts (13% vs 9%). Among part-time workers, those living in a household without a full-time worker are more likely to be uninsured (17%) than those living with a full-time worker (11%). Part-time workers are also more likely to be covered by Medicaid (21%) or Direct-Purchase (12%) than full-time workers (7% and 6% respectively). Direct purchase coverage would primarily be through the ACA marketplaces and typically comes with a tax credit to subsidize the premium, scaled with income. 

Offers and take-up of employer-based coverage 

One of the reasons part-time workers are less likely to have health coverage through their job is that they are less likely to work for employers who offer health benefits. Specifically, only 60% of part-time workers work for an employer that offers health insurance, compared to 84% for full-time workers.  

Among part-time workers who do work for an employer offering health benefits, just 64% are eligible to take up the coverage. For those who work for an employer offering coverage but are not eligible to enroll:

•  84% do not work enough hours per week or weeks per year to qualify,
•  8% are contract or temporary employees,
•  and 5% have not worked for their employer long enough to become eligible. 

Of the 60% of part-time workers that work for an employer that offers health insurance, only 64% are actually eligible for coverage at their job. Overall, 19% of part-time workers are covered by their own employer. Among those part-time employees who are eligible but do not take up coverage offered at work, 68% cite having other coverage as the reason for not enrolling, while 28% find the coverage too expensive. 

Part-time workers—especially those living in households without a full-time worker—tend to have lower incomes and are less likely to be covered by a job-based health plan. Even when coverage is offered, many part-time workers cite cost as a reason for not enrolling. These workers may struggle to afford the premiums required to enroll in the plan, or the cost-sharing required by the plan when they go to use services. While, overall, those with employer-sponsored plans spend an average of 3.9% of their income on premiums and cost-sharing, the financial burden is much higher for lower-income households. Fifteen percent of workers have household incomes below 200% of the federal poverty level. 

Employer-sponsored insurance remains the linchpin of coverage for non-elderly working adults, but workers with lower incomes or part-time schedules are significantly less likely to have access to this type of insurance. For part-time workers who are either ineligible for or cannot afford job-based coverage, upcoming federal policy changes may further limit their options. Changes to Medicaid and the Affordable Care Act in the Republican tax and spending package — formerly known as the “One Big Beautiful Bill”— are projected to result in 10 million more people becoming uninsured by 2034. Furthermore, if the enhanced premium tax credits that reduce the cost of ACA Marketplace coverage for many enrollees are not extended beyond 2025, an additional 4.2 million people are expected to lose coverage. 

Some employers have taken steps to make coverage more accessible for low-wage workers. In 2024, 14% of firms with 200 or more employees offered a plan with reduced benefits and low premium contributions specifically designed to be affordable for low-wage workers. Additionally, some firms provide voluntary benefits to part-time workers outside of their standard health plans. These benefits may include financial assistance for hospitalization or specialized services such as telehealth. In 2024, 3% of small firms and 14% of large firms that did not offer standard coverage to part-time workers offered a voluntary benefit. Despite these efforts, access to employer-sponsored health benefits remains a significant challenge for many part-time workers. 

Enhanced premium tax credits (ePTCs), first introduced as part of the American Rescue Plan Act in 2021, have made ACA Marketplace coverage more affordable for the millions of enrollees that receive them. Enhanced tax credits have lowered the share of household income ACA Marketplace enrollees are expected to contribute out-of-pocket toward the premium payment for a benchmark silver plan. For those already eligible for premium subsidies, ePTCs have increased the total amount of tax credits the enrollee receives, while middle-income enrollees making above 400% of poverty ($62,600 for an individual enrolled in coverage for plan year 2026) have become newly eligible for the tax credits. The ePTCs were extended until the end of 2025 by the Inflation Reduction Act.

This data note compares how the out-of-pocket portion of premiums would differ if the ePTCs expire, or become extended, for select scenarios. (To produce your own estimate of how premium payments would differ compared to if the enhanced tax credits become unavailable, KFF provides an interactive tool where users are able to input their desired geography, income, and family size).  

If enhanced premium tax credits expire, subsidized ACA Marketplace enrollees can expect their out-of-pocket premium payments to rise substantially. For example, a 27-year-old making $35,000 (224% of poverty) would pay $1,033 annually for a benchmark silver plan in 2026 with the ePTCs. Without the enhanced tax credits, however, they will pay $2,615 – a $1,582 (153%) increase.

With the enhanced tax credits in place, Marketplace enrollees making between 100%-150% of the federal poverty level are eligible for a fully subsidized benchmark plan. Prior to the availability of the ePTCs, enrollees making just above the poverty level were expected to contribute about 2% of their household income towards a benchmark plan. If the enhanced tax credits expire, low-income enrollees who are currently paying $0 for a benchmark plan will have to start paying for coverage again. For example, a 35-year-old couple earning $30,000 can expect to start paying $1,107 annually for a Marketplace benchmark plan.

What happens if premiums rise substantially in 2026?

There are two ways of thinking about premiums in the ACA Marketplaces. First, there is the net premium, which is what the enrollee pays out-of-pocket after taking into account their tax credit. Second, there is the gross premium, which is the amount the insurance company charges (part of which is paid by the federal government and part of which is paid by the enrollee). The expiration of the enhanced premium tax credits will affect the net premium directly (as enrollees receive less financial assistance) and it will also indirectly affect the gross premium insurers charge.

A KFF analysis of rates (gross premiums) proposed by Marketplace insurers for the 2026 plan year found that insurers are requesting a median increase of 18% in their rates. Insurers cited several reasons for these rate increases, including that they anticipate that some healthier members will leave the ACA Marketplaces once their net (or, out-of-pocket) premium payments increase if the ePTCs expire. This results in an enrollee base that is less healthy and more expensive, on average. Insurers say that rates are rising by about 4 percentage points more than they otherwise would, due to the expiration of the enhanced premium tax credit.

If enhanced premium tax credits expire, enrollees with incomes between the poverty level and four times the poverty level will continue to be eligible for financial assistance – they will just receive a smaller tax credit than they currently do. As shown in the examples above, these enrollees will pay significantly more for their monthly premium, but they will still pay a certain percent of their income for the benchmark silver plan. In other words, the increase in their monthly premium will primarily be a result of a smaller tax credit — the amount subsidized enrollees pay is largely shielded from increases in the amount insurance companies charge.

However, if enhanced premium tax credits expire, people with incomes over four times the poverty level will no longer be eligible for any financial assistance. Because their monthly payments will no longer be tied to a certain percentage of their income, these enrollees will not only lose financial assistance but will also be exposed to any increase in underlying gross premiums. With the enhanced tax credits, middle-income enrollees making above 400% of poverty currently have their out-of-pocket premium payments for a benchmark plan capped at 8.5% of their income. However, if the ePTCs are not renewed, these enrollees will experience a “double whammy” – losing their eligibility for Marketplace premium tax credits and facing the annual increases in the cost of a Marketplace plan.

On average, a 55-year-old couple making $85,000 is currently receiving $13,567 in premium tax credits annually, covering 65% of the total cost of a benchmark plan. If the ePTCs expire, this couple would lose financial assistance and pay the full annual cost of $20,792, assuming premiums stay the same. However, if the gross premium grows at a rate of 18% into 2026, the 55-year-old couple can expect their net (out-of-pocket) premium payments to more than triple if ePTCs expire, increasing by $17,310 (240%), from $7,225 to $24,535 annually for the same plan.

How do Trump Administration Regulations Affect Premium Payments?

The maximum household required contribution for a benchmark ACA Marketplace plan is indexed annually to adjust for growth in premiums relative to income. Since the introduction of enhanced premium tax credits, new (and more generous) required contribution levels for premiums were implemented without annual adjustment.

As the ePTCs are set to expire, the IRS has released the required contributions for 2026. The Trump administration introduced changes in the calculation of required contribution through the Marketplace Integrity and Affordability rule earlier this year. Compared to the indexing methodology in place previously, the maximum out-of-pocket contribution for benchmark premiums for those that receive premium tax credits has increased as a share of income.

Prior estimates indicated that in 2024, out-of-pocket premium payments among subsidized enrollees would have been over 75% higher without the enhanced tax credits. Enrollees could expect to pay even more in 2026, on average, due to annual increases in the average costs of premium and IRS changes to the contribution requirements.