On May 22, the House passed a reconciliation bill, the One Big Beautiful Bill Act, which would partially pay to extend expiring tax cuts by cutting Medicaid. The Congressional Budget Office (CBO) estimates that the bill would reduce federal Medicaid spending by $793 billion over ten years and 10.3 million fewer people would be enrolled in Medicaid in 2034, including 1.3 million people with Medicare, otherwise known as “dual-eligible individuals”. The loss of Medicaid coverage for Medicare beneficiaries stems from delaying implementation of two rules that aimed to streamline the enrollment process and make it easier for people to maintain Medicaid coverage by reducing administrative barriers. Dual-eligible individuals would be disproportionately impacted by these provisions, comprising nearly 60% of the 2.3 million Medicaid enrollees who are estimated to lose coverage as a result of delaying these rules under the House reconciliation bill (Figure 1). Instead of placing a moratorium on implementation of the rules, the recently released Senate reconciliation language would prohibit nearly all of the provisions in the rules from ever being implemented.

Dual-eligible individuals have low incomes and modest savings. The 1.3 million people that would no longer have Medicaid if the eligibility and enrollment rules were not implemented would retain their primary health insurance coverage under Medicare, but lose Medicaid coverage of Medicare premiums, and in most cases, cost sharing, which are provided through Medicare Savings Programs (MSPs) administered by state Medicaid programs. Many would also lose coverage of Medicaid benefits that supplement their Medicare coverage, such as long-term care, dental services, and non-emergency medical transportation.

The loss of Medicaid coverage for Medicare beneficiaries stems from provisions in the House bill that would delay implementation of two Biden administration rules until 2035. The two rules that would be delayed under the House reconciliation bill were intended to make it easier for people to enroll in and maintain Medicaid coverage by minimizing administrative burden in the following ways.

• One rule aimed to reduce barriers to enrollment in the Medicare Savings Programs (MSPs), under which Medicaid pays Medicare premiums, and in most cases, cost sharing for low-income Medicare beneficiaries. Among other changes, the rule would automatically enroll Medicare beneficiaries with Supplemental Security Income (SSI) into the MSPs and would more closely align the MSP application to the application for Medicare’s Part D prescription drug Low-Income Subsidy (LIS).
• The second rule would more broadly streamline application, enrollment, and renewal processes in Medicaid. Among the changes most relevant for dual-eligible individuals are new requirements for states to assist applicants with procuring appropriate documentation to validate income and assets, a requirement to renew Medicaid coverage only once per year, and a prohibition on requiring in-person interviews as part of the application process

CBO estimates that delaying these two rules would reduce federal spending by $167 billion over 10 years, making this the second largest source of cuts to federal Medicaid spending in the bill. Illustrating why administrative burdens may make it hard for dual-eligible individuals to maintain Medicaid, prior KFF research finds that among people who newly become eligible for both Medicare and Medicaid, 28% lose Medicaid coverage within the first year despite living on fixed incomes.

Although states have already implemented some of the rules’ provisions (Table 1), if the rules are delayed, it is expected that further implementation will cease and states may resume some practices that were prohibited under the rules. For example, 38 states report sending pre-populated renewal forms to Medicaid enrollees who qualify because they are ages 65 and older or have a disability, a practice they may discontinue if the rules are delayed. Alternatively, it’s possible that some states will reinstate requirements for applicants to submit paper documentation or report for in-person interviews. In a few cases, states will be required to reinstate application requirements or be prohibited from using more streamlined application processes.

Losing Medicaid coverage would substantially increase out-of-pocket costs for low-income Medicare beneficiaries. Because Medicare beneficiaries who qualify for Medicaid typically have very low incomes and little to no savings, the loss of Medicaid payment for the costs of Medicare’s premiums and cost sharing could make their Medicare coverage unaffordable. For example, the first rule would automatically enroll low-income Medicare beneficiaries who receive Supplemental Security Income (SSI) into a MSP. Without the MSP, such people must pay 20% of the $967 SSI monthly benefits for the $185 Medicare Part B monthly premium in 2025. (In order to qualify for SSI, individuals must have low incomes, limited assets, and either be over age 64 or have a qualifying disability.) This same individual would have additional out-of-pocket costs if they went to the doctor or were admitted to the hospital. Those additional out-of-pocket costs could discourage low-income beneficiaries from using health care and is the reason for CBO’s estimate that delaying implementation of the rules would reduce Medicare spending by $11 billion over 10 years.

Additionally, some of the 1.3 million Medicare beneficiaries expected to lose Medicaid under the House reconciliation bill may also lose subsidies that help pay for prescription drug premiums and cost sharing. Medicare beneficiaries with Medicaid are automatically enrolled in the Medicare Part D Low-Income Subsidy (LIS), which provides assistance with Part D prescription drug premiums and cost sharing. Illustrating the connection between Medicaid enrollment and LIS coverage, between December 2024 and January 2025, the number of LIS recipients decreased by 1 million, following Medicaid disenrollments that stemmed from the unwinding of the Medicaid continuous enrollment provision. Before the decline, LIS enrollment had been slowly but steadily growing over time.

Note: Originally published on May 15, 2025. This content was updated on July 8, 2025 to reflect the provisions in the final bill signed into law on July 4, 2025.

Introduction

Congressional Republicans recently passed a budget reconciliation package that will make significant changes to Medicaid and the Affordable Care Act (ACA), with a number of provisions specifically limiting access to health coverage for immigrants. The bill was signed into law on July 4, 2025 and includes provisions to meet spending targets that would make significant cuts to the Medicaid program and also include immigrant eligibility restrictions for ACA Marketplaces and Medicare. Beyond these changes, reductions have been made in other areas that would have significant impacts for immigrant families, including eligibility restrictions for the Child Tax Credit and the Supplemental Nutrition Assistance Program. The legislation also provides hundreds of billions of dollars in additional funding for immigration enforcement. This includes funding to further militarize enforcement and build detention centers for immigrant children and families.

This policy watch discusses key provisions in the new law that are aimed at limiting health coverage for immigrant families. These provisions would likely increase the uninsured rate among immigrant families, including citizen children in those families, and have broader ramifications for the nation’s workforce and economy given the role immigrants play.

Medicaid Changes

Eliminate Medicaid and CHIP eligibility for many lawfully present immigrants. Under current law, in addition to meeting other eligibility requirements, lawfully present immigrants must have a “qualified” immigration status to be eligible for Medicaid or CHIP. Qualified immigrants include lawful permanent residents (LPRs); refugees; individuals granted parole for at least one year; individuals granted asylum or related relief; certain abused spouses and children; certain victims of trafficking; Cuban and Haitian entrants; and citizens of the Freely Associated States (COFA migrants) residing in states and territories. In addition, many lawfully present immigrants must wait five years after obtaining qualified status before they may enroll in Medicaid; states may waive the five-year wait for children and pregnant individuals. Some states have state-only funded coverage programs for undocumented immigrants. Undocumented immigrants already are ineligible for federally funded Medicaid coverage. Emergency Medicaid pays hospitals for the costs of emergency care provided to immigrants who would qualify for Medicaid except for their immigration status, which hospitals are required to provide under federal law.

A provision in the final version of the bill that was signed into law will restrict the definition of qualified immigrants for purposes of Medicaid or CHIP eligibility to LPRs, Cuban and Haitian entrants, citizens of the Freely Associated States (COFA migrants) lawfully residing in the US, and lawfully residing children and pregnant adults in states that cover them; thereby eliminating Medicaid eligibility for many lawfully present immigrants. These eligibility restrictions would further limit access to health coverage for lawfully present immigrants likely resulting in an increase in their uninsured rate and increased barriers to accessing care. This provision will become effective October 1, 2026.

Reduce the federal Medicaid match rate for Emergency Medicaid for immigrants who would be eligible for Medicaid expansion coverage but for their immigration status. Currently, undocumented immigrants and some lawfully present immigrants are not eligible for federally funded Medicaid coverage. Emergency Medicaid reimburses hospitals for the costs of emergency care provided to immigrants who would qualify for Medicaid except for their immigration status, which hospitals are required to provide under federal law. Data from the Centers for Medicare and Medicaid Services show that spending on Emergency Medicaid accounts for less than 1% of total Medicaid spending. The final bill that was signed into law will limit federal matching payments for Emergency Medicaid for individuals who would otherwise be eligible for expansion coverage except for their immigration status to the state’s regular federal Medicaid match rate as opposed to the expansion match rate. This change will shift costs to states to reimburse hospitals for the costs of care they are required to provide, but only in states that have expanded Medicaid under the ACA. This provision will become effective October 1, 2026.

Under the initial House-passed bill, reduce the federal Medicaid match rate for the ACA Medicaid expansion group from 90% to 80% for states that use their own funds to expand health coverage to certain immigrants, but this provision was not included in the final version of the bill. Some states have established fully state-funded coverage programs for at least some undocumented and lawfully present immigrants who are not eligible for federally funded Medicaid. As of April 2025, 14 states plus DC provide health coverage to children regardless of immigration status, including 7 states plus DC that extend coverage to at least some adults regardless of immigration status. The initial House-passed bill would have penalized states that offer this coverage by reducing the expansion match rate from 90% to 80% for states that provide health coverage or financial assistance, including using their own funds, to purchase health coverage for individuals who do not have a qualified status (including undocumented immigrants) and who are not lawfully residing children or pregnant adults covered under the Medicaid option for these groups. This provision was removed from the final version of the bill that was signed into law.

Under the House-passed bill, end requirement and federal Medicaid financing for states to cover people while they are verifying immigration or citizenship status, but this provision was not included in the final version of the bill. Under current law, states verify an applicant’s immigration status for Medicaid through the Department of Homeland Security’s Systematic Alien Verification for Entitlements (SAVE) system, which can provide automatic real-time verification. If the SAVE system cannot verify immigration status in real time, states are required to provide Medicaid benefits to applicants during a “reasonable opportunity period” of 90 days while their immigration status is being verified, if they meet all other eligibility criteria. Under the initial House-passed bill, states would no longer have been required to provide Medicaid benefits to applicants during a “reasonable opportunity period,” although they could do so at state option. The provision would also have prohibited states from claiming federal matching funds during a reasonable opportunity period, meaning that, if states elected to provide this coverage, they would do so with solely state funds. This provision was removed from the final version of the bill that was signed into law.

Changes to ACA Marketplace Coverage

Eliminate ACA Marketplace coverage for many lawfully present immigrants. Under existing law, citizens and lawfully present immigrants are eligible to enroll in ACA Marketplace coverage and receive premium subsidies and cost-sharing reductions. The group of lawfully present immigrants eligible for Marketplace coverage is broader than the group of “qualified immigrants” who are eligible for Medicaid. In general, Marketplace coverage is limited to individuals with incomes at or above 100% of the federal poverty level (FPL), since most of those with lower incomes would be eligible for Medicaid. However, because some lawfully present immigrants with lower incomes remain ineligible for Medicaid (e.g., due to the five-year waiting period), Marketplace eligibility was also extended to lawfully present immigrants with incomes under 100% FPL who do not qualify for Medicaid due to their immigration status.

A provision in the final version of the bill signed into law would limit eligibility for subsidized ACA Marketplace coverage to lawfully present immigrants who are lawful permanent residents (LPRs or “green card” holders), Compact of Free Association (COFA) migrants residing in the U.S., and certain immigrants from Cuba and Haiti, thereby eliminating eligibility for many lawfully present immigrants, including asylees, refugees, people with Temporary Protected Status, as well as Deferred Action for Childhood Arrivals (DACA) recipients beginning January 1, 2027. The legislation also eliminates Marketplace eligibility for all lawfully present immigrants with incomes under 100% of the federal poverty level beginning January 1, 2026, leaving some ineligible for either Medicaid or Marketplace coverage.

Changes to Medicare Coverage

Eliminate Medicare eligibility for many lawfully present immigrants. Currently, lawfully present immigrants are eligible for Medicare if they have the required work quarters and meet the disability or age requirements. Those without required work history can also purchase Medicare Part A after residing legally in the U.S. for five years continuously. A provision in the final version of the bill signed into law would limit Medicare eligibility to lawfully present immigrants who are LPRs (“green card” holders), COFA migrants residing in the United States, and certain immigrants from Cuba and Haiti. This will eliminate eligibility for many lawfully present immigrants including refugees, asylees, and people with Temporary Protected Status. Current beneficiaries subject to the new restrictions would lose coverage no later than 18 months from enactment of the legislation. The Commissioner of Social Security would review beneficiaries to identify those who would be subject to the restrictions and notify them that their benefits will be terminated.

Health Coverage and Economic Implications

Noncitizen immigrants already are disproportionately likely to be uninsured due to limited access to health coverage options. Although most are working, they tend to be employed in industries and jobs that are less likely to offer employer-sponsored health coverage and face eligibility restrictions for federally funded health coverage. The provisions highlighted in this policy watch will further curtail access to health coverage for both undocumented and lawfully present immigrants and will likely lead to coverage losses and increased barriers to care among immigrant families. Because parental coverage has spillover effects on children’s coverage, coverage losses among immigrant parents may also lead to coverage losses for citizen children in immigrant families. Overall, one in four children in the U.S. lives with an immigrant parent, including one in ten (12%), or 9 million, who are citizen children with a noncitizen parent. People who are uninsured often delay or go without needed care, which can contribute to health conditions becoming worse and more costly. Data from the 2023 KFF/LA Times Survey of Immigrants show that uninsured immigrant adults are about three times as likely as their insured counterparts to report not having a usual source of care other than an emergency room (42% vs. 13%) and not having had a doctor’s visit in the past 12 months (52% vs. 18%); they also are about twice as likely to report skipping or postponing care in the past 12 months (36% vs. 19%). Reduced coverage and access to care may also negatively impact the U.S. economy and workforce due to lost productivity since immigrants play an outsized role in many occupations including health care, construction, and agriculture.

Medicaid Work Requirements Are Generally Popular, But Arguments Can Shift Views

Nearly two-thirds (64%) of the public holds unfavorable views of the “One Big Beautiful Bill” passed last month by the House, nearly twice the share who view the bill favorably (35%), a new KFF Health Tracking Poll finds.

The budget reconciliation bill that includes tax and budget cuts – much of which affect health care – is viewed unfavorably by large majorities of Democrats (85%) and independents (71%), but favorably by six in 10 Republicans (61%).

Among Republicans and Republican-leaning independents who identify as supporters of President Trump’s Make America Great Again (MAGA) movement, a large majority (72%) view the bill favorably. In contrast, most Republicans and Republican-leaning independents who don’t identify as MAGA supporters view the bill unfavorably (66%).

When people hear facts and arguments about the bill’s impact on health care, support shrinks and opposition grows, including among MAGA supporters.

For example, after being told that the bill would decrease funding for local hospitals, the share with favorable views falls to 21% and unfavorable views rise to 79%. Similarly, after being told that the bill would increase the number of people without health insurance by about 10 million, support falls to 25% and opposition rises to 74%.

Among MAGA supporters, support drops by more than 20 percentage points after hearing each of the two arguments, resulting in less than half in the group viewing the law favorably.

“The public hasn’t had much time to digest what’s in the big, beautiful, but almost incomprehensible bill as it races through Congress, and many don’t have a lot of information about it,” KFF President and CEO Drew Altman said. “Our poll shows that views toward the bill and its health-care provisions can shift when presented with more information and arguments about its effects, even among MAGA supporters.”

As Congress debates significant reductions in federal spending on Medicaid and the Affordable Care Act (ACA), the poll finds the public views the two programs more favorably than ever before.

Regarding Medicaid, 83% of the public now views the Medicaid program favorably, including large majorities of Democrats (93%), independents (83%), and Republicans (74%). That’s up from 77% in January, with the biggest jump occurring among Republicans. Unfavorable views of the program now stand at 17%, down from 23% in January.

Similarly, two-thirds (66%) of the public now have favorable views of the ACA, the highest level of support recorded in KFF polls since the law’s enactment in 2010. Favorable views of the ACA have been on the rise since 2017 during an unsuccessful attempt by Congressional Republicans to repeal the law during President Trump’s first term.

Views of the ACA remain split along partisan lines, with most Republicans (63%) holding unfavorable views, and most Democrats (94%) and independents (71%) holding favorable ones.

Medicaid Work Requirements Are Generally Popular, But Arguments Can Shift Views

The poll also gauges the public’s views on a provision in the House bill that would require most adult Medicaid enrollees to prove that they are working, engaged in other qualified activities, or meet exemption criteria, to keep their coverage.

The poll finds two-thirds of the public – including the vast majority of Republicans (88%) and MAGA supporters (93%), and half (51%) of Democrats – initially support requiring nearly all adults with Medicaid coverage to prove they are working, looking for work, in school, or doing community service, with exceptions for caregivers and people with disabilities.

However, attitudes toward this provision can shift dramatically when people are presented with facts and arguments related to its impact.

For example, when told most adults with Medicaid are already working or unable to work, and they could potentially lose coverage due to the challenges in providing paperwork to prove it, about half of supporters change their view, resulting in nearly two-thirds of adults (64%) opposing Medicaid work requirements and a third (35%) supporting it.

Similarly, overall support for work requirements drops to 40% after supporters hear that the policy would not have a significant impact on employment and would increase state administrative costs.

In the other direction, overall support increases to 79% when opponents of Medicaid work requirements hear the argument often made by supporters that such a requirement could save money and help fund Medicaid for groups like the elderly, people with disabilities, and low-income children.

The poll also gauges views on other health care provisions in the bill:

• A narrow majority (54%) opposes a provision that would reduce federal funding to states that use state money to expand health coverage to immigrants, including some undocumented immigrants, who don’t qualify for Medicaid. Just under half (45%) support the provision, including three-quarters of MAGA supporters (76%).
• Two-thirds (67%) oppose a provision that would stop all payments to Planned Parenthood and other clinics for services such as birth control and health screenings that they provide to people on Medicaid if the clinics also offer abortion services. A majority (62%) of MAGA supporters favor the provision, while Republican women are split (51% oppose, 49% support).
• Nearly two-thirds (65%) oppose provisions in the bill that would reduce ACA Marketplace enrollment by shortening the annual sign-up period and requiring more paperwork to verify people’s eligibility for coverage. Most Democrats (79%) and independents (68%) oppose the changes, while Republicans are split (51% support, 47% oppose). A narrow majority (55%) of MAGA supporters favor the change.

Most of the Public, Including Those who Rely on Medicaid, Worry About Bill’s Impact

Among the public overall, 72% say they are concerned that more adults and children will become uninsured because of the bill’s changes to Medicaid and the ACA. This includes large majorities of Democrats (90%) and independents (77%), and nearly half of Republicans (48%).

Among people who have a current personal or family connection to the Medicaid program, nearly 8 in 10 (77%) say they are concerned about a potential increase in the uninsured.

People under age 65 with Medicaid coverage also say they would face significant hardships if they were to lose their coverage. Without Medicaid, more than half say it would be “very difficult” to afford their prescription medications (68%), afford to see a health care provider (59%) or get and pay for another form of coverage insurance coverage (56%). 

In addition, most Medicaid enrollees say that losing Medicaid coverage would have a “major impact” on their financial well-being (75%), overall quality of life (69%), their mental health (66%), and their physical health (60%). Four in ten say it would have a “major impact” on their ability to work.

Designed and analyzed by public opinion researchers at KFF, this survey was conducted June 4-8, 2025, online and by telephone among a nationally representative sample of 1,321 U.S. adults in English and in Spanish. The margin of sampling error is plus or minus 3 percentage points for the full sample. For results based on other subgroups, the margin of sampling error may be higher.

This data note has been updated to include new polling data.

This data note provides an overview of recent KFF polling on the public’s views of and connections to Medicaid, the federal-state government health insurance for certain low-income adults and children and long-term care program for adults 65 and older and younger adults with disabilities.

#1: Most Americans Have Some Connection to Medicaid

Most adults report some level of connection to the Medicaid program. About seven in ten (69%) adults say that someone close to them has received help from Medicaid at some point, including over half (56%) who say either they themselves or a member of their family has been covered by the program and an additional 13% who say a close friend has been covered. Substantial shares of Democrats (56%), independents (58%), and Republicans (51%) say they or a family member has ever been covered by Medicaid.

#2: The Public Holds Favorable Views of Medicaid

Majorities of the public across partisanship hold favorable views of Medicaid. The June 2025 KFF Health Tracking Poll found that more than eight in ten adults have a “very favorable” (42%) or “somewhat favorable” (41%) view of the program, while less than one in five (17%) have an unfavorable view. Large majorities of Democrats (93%), independents (83%), and Republicans (74%) view the program favorably. KFF polling has found that the public has viewed Medicaid more positively than negatively since at least the late 1990s.

#3: Nearly All Adults Say Medicaid Is Important for People in Their Communities and More Than Half See It As Important for Their Families

Nearly all adults (97%) say Medicaid is at least somewhat important for people in their local community, including about three in four (73%) who say it is “very important.” Large majorities across partisans say Medicaid is important to people in their local community – though Republicans are less likely to say it is “very important.”

A majority (56%) of adults also say Medicaid is important for them and their family, including about a third (35%) who say it is “very important.” More than three in four adults who have been covered by Medicaid or have had a family member covered by the program say it is “very important” or “somewhat important” to them and their families. Across partisans, about six in ten Democrats and independents say Medicaid is important to them and their families, as do 44% of Republicans.

#4: Few Adults Want To See a Decrease in Federal Medicaid Spending

The February 2025 KFF Health Tracking Poll found that few adults (17%) say they want to see Congress decrease federal spending on Medicaid. Most people say they want to see Congress either increase Medicaid spending (42%) or keep it about the same (40%). A majority of Democrats (64%) want Congress to increase spending on Medicaid while pluralities of independents (46%) and Republicans (43%) want to see Congress keep Medicaid funding about the same.

#5: Some Public Misconceptions About Medicaid Remain

Despite large shares of the public having some connection to Medicaid, there is still some confusion about who and what is covered by Medicaid. For example, just 38% of the public know that Medicaid is the government program that pays for nursing homes and long-term care services; one in four adults incorrectly believe that Medicare pays for these services, and 31% of the public say they don’t know.

Similarly, though KFF analysis has shown that about two-thirds of adults ages 19-64 who have Medicaid coverage are already employed, just about four in ten adults (43%) are aware most people in the program are working while more than half (56%) incorrectly think most working-age people with Medicaid are unemployed.

Additionally, just about half of the public (53%) know that undocumented immigrants are not eligible for health insurance programs like Medicaid paid by the federal government, whereas slightly less than half of the public are either unsure (28%) or incorrectly believe (18%) that undocumented immigrants are eligible for health insurance programs paid for by the federal government.

#6: Views of Whether Medicaid Is Health Insurance or Welfare Vary by Partisanship

When asked whether Medicaid is primarily a government health insurance program or a government welfare program, a larger share of the public (62%) as well as two-thirds of independents and three-fourths of Democrats (74%) say Medicaid is primarily a health insurance program. A smaller majority of Republicans (54%) say Medicaid is primarily a welfare program.

#7: Medicaid Expansion Is Popular in Non-Expansion States

The Affordable Care Act’s (ACA) gave states an option to expand their Medicaid coverage to nearly all adults with incomes up to 138% of the Federal Poverty Level and receive additional federal funding for their expanded Medicaid populations.

As of 2025, 41 states and Washington, D.C. have expanded their Medicaid programs under the ACA while 10 states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming) have not adopted the expansion. KFF polling has found that two-thirds of people living in non-expansion states think their state should expand Medicaid to cover more low-income people under the ACA. This is nearly twice the share who say they want their state Medicaid program to stay as it is (34%).

As the Trump administration moves to institute changes to the process by which vaccines are recommended for the U.S. public, as well as the actual recommendations themselves¹ , consumers could lose access to no-cost health insurance coverage of vaccines. This is due to the fact that several laws and regulations tie such coverage to recommendations made by the Advisory Committee on Immunization Practices (ACIP) and/or those made by the Director of the Centers for Disease Control and Prevention (CDC). ACIP is a federal advisory committee established in 1964 to provide advice and guidance to the CDC Director on the use of vaccines for the public. The CDC Director reviews recommendations made by ACIP, and if adopted, they are published as official CDC/HHS recommendations in the Morbidity and Mortality Weekly Report (MMWR). ACIP also is charged with establishing and revising the list of vaccines used for the Vaccines for Children Program. The CDC Director, or Secretary of HHS, can choose not to adopt an ACIP recommendation, to modify it, or to make their own recommendations and, in most, but not all cases, the HHS decision ultimately determines whether coverage is required.

In light of changes made by the administration, this policy brief provides an overview of vaccine coverage requirements by payer or program, as specified in law, regulations, and other policy guidance.²   As it shows, coverage requirements for all payers, except for vaccines covered under Medicare Part B, are currently linked to either ACIP and/or CDC vaccine recommendations. Therefore, a narrowing or removal of a vaccine recommendation, as was recently done for COVID-19, would mean that most insurers would no longer be required to provide no-cost coverage. (see Summary and Detailed Tables below).

Findings

Almost all payers are required to cover recommended vaccines at no-cost. This is currently the case for private insurance and employer-sponsored health plans, Medicaid, and Medicare. There is also a mandatory program for Medicaid-eligible and uninsured children – the Vaccines for Children Program – that provides recommended vaccines for free to eligible children (there is no such program for uninsured adults). The first requirement of coverage was in 1981, as part of Medicare Supplementary Insurance (Part B). The most recent was enacted in 2022, when the Inflation Reduction Act (IRA) required coverage of recommended vaccines under Medicare Part D and expanded Medicaid coverage for some adults not already covered.

Vaccine coverage requirements are linked to ACIP/CDC recommendations in almost every case. All payers, except under Medicare Part B, are required to provide no-cost coverage for vaccines recommended by ACIP/CDC. For example, most private insurers are required to cover vaccines that have, in effect, an ACIP recommendation. Vaccines covered under Medicare Part B are the exception, with four vaccines specifically authorized for coverage at no cost in statute.

The point at which a vaccine is considered “recommended” for purposes of requiring no-cost coverage varies somewhat by payer, and in some cases has been determined through subsequent rule-making or federal policy. For private insurers, Medicare Part D, and Medicaid expansion, the requirement is tied to an ACIP recommendation that has been adopted by the CDC Director, as specified in final regulations or guidance. For traditional Medicaid and CHIP, an ACIP recommendation is sufficient. For purposes of the Vaccines for Children Program, the list specified by ACIP determines what is included.

If ACIP or CDC vaccine recommendations were to be narrowed or removed, as was recently done in the case of COVID-19, most payers would no longer be required to provide no-cost coverage. On May 27, Secretary Kennedy announced that the COVID-19 vaccine was no longer recommended for healthy children, ages six months to 17 years, or for healthy pregnant women (COVID-19 vaccines were previously recommended for all children ages six months or older and pregnancy had previously been considered a condition that put people at increased risk for moderate or severe COVID-19 disease). This means that insurers will no longer be required to provide free vaccines for these populations unless they have an underlying health condition that places them at higher risk (in the case of children, the CDC subsequently revised the pediatric vaccine schedule to base the recommendation on “shared clinical decision-making”, which means free insurance coverage should be required if a doctor recommends a child be vaccinated based on that child’s individual circumstance).

1. For example, the FDA recently announced planned changes to the criteria used to approve COVID-19 vaccines, Secretary of Health and Human Services, Robert F. Kennedy Jr. narrowed existing COVID-19 vaccine recommendations and also reconstituted the membership of ACIP. ↩︎
2. Also see: https://modern.kff.org/coronavirus-covid-19/issue-brief/vaccine-coverage-pricing-and-reimbursement-in-the-u-s/; https://advisory.avalerehealth.com/wp-content/uploads/2023/10/Guide-to-Vaccine-Coverage-Policies.pdf; https://www.healthaffairs.org/content/forefront/vaccine-policy-crisis-secretary-kennedy-dismisses-entire-advisory-committee. ↩︎
3. The date in which the requirement takes effect may differ from date first enacted by law. ↩︎
4. Private insurance requirements pertain only to non-grandfathered plans and in-network providers. ↩︎
5. Sources: Patient Protection and Affordable Care Act; Final Rule: Coverage of Certain Preventive Services Under the Affordable Care Act; CMS, Affordable Care Act Implementation FAQs – Set 12 ↩︎
6. Sources: Title XVIII of the Social Security Act, §410.57; MedPAC, Medicare vaccine coverage and payment. ↩︎
7. Sources: Inflation Reduction Act; CMS, Contract Year 2023 Program Guidance Related to Inflation Reduction Act Changes to Part D Coverage of Vaccines and Insulin; CMS, REVISION – Contract Year 2023 Program Guidance Related to Inflation Reduction Act Changes to Part D Coverage of Vaccines. ↩︎
8. Sources: Inflation Reduction Act; CMS, SHO# 23-003, RE: Mandatory Medicaid and Children’s Health Insurance Program Coverage of Adult Vaccinations under the Inflation Reduction Act; Social Security Act §1937; 42 CFR §440.347 – Essential health benefits; CMS, Coverage and Payment of Vaccines and Vaccine Administration under Medicaid, the Children’s Health Insurance Program, and Basic Health Program; ↩︎
9. Omnibus Budget Reconciliation Act of 1993; Social Security Act §1928. ↩︎
10. Source: 42 U.S.C. § 247b. ↩︎

Affordable Care Act (ACA) Marketplace enrollment increased following the enactment of enhanced premium tax credits in 2021, as more individuals became eligible for subsidies. In 2025, individual market enrollment reached a record high of 25.2 million people. However, it is not yet known how many ACA enrollees effectuated coverage, so the size of the on- and off-exchange market remains uncertain. In 2024, the effectuation rate was 96.9%. If that rate holds steady, approximately 23.6 million people would have enrolled in coverage through the exchanges in 2025, with an estimated 1.6 million enrolled off-exchange. (Note: The aforementioned effectuation rate and estimates of on and off-exchange enrollment for 2025 were corrected on June 18, 2025).

The House-passed reconciliation bill includes only a few provisions that directly affect Medicare spending. It includes no provisions related to Medicare Advantage, the private plan alternative to traditional Medicare, even though analysis by the Medicare Payment Advisory Commission (MedPAC) estimates payments to Medicare Advantage plans are $84 billion (or 20%) more than spending for similar beneficiaries in traditional Medicare. In contrast, the bill instead focuses on major changes to Medicaid and the Affordable Care Act (ACA), which would reduce federal spending by over $1 trillion and increase the number of uninsured people by an estimated 10.9 million. (When combined with the effects of allowing the ACA’s enhanced premium tax credits to expire, CBO estimates 16 million more people will be uninsured in 2034.) Despite some reports last week that Senate Republicans were considering including changes to how the federal government adjusts payments to Medicare Advantage plans based on the health status of their enrollees, those now appear unlikely to be included in the Senate version.

The Medicare Advantage quality bonus program, established by the Affordable Care Act, increases Medicare payments to Medicare Advantage plans based on a five-star rating system. Plans may, but are not required to, use the additional payments to cover the cost of supplemental benefits, including reduced cost sharing, extra benefits not covered by traditional Medicare (e.g., vision, hearing and dental), and lowering Part B and/or Part D premiums. The star ratings are intended to help consumers make informed decisions when choosing among Medicare Advantage plans and the bonus payments are intended to encourage plans to compete based on quality. However, MedPAC and others have observed that the star ratings incorporate too many measures, do not adequately account for social risk factors, and may not be a useful indicator of quality because star ratings are reported at the contract rather than the plan level. Medicare Advantage contracts typically include multiple plans, which may have different benefits, costs, networks, service areas, and enroll different populations (i.e., plans that are open for general enrollment and special needs plans that limit enrollment to dual-eligible individuals).

Critiques of the quality bonus program have led to calls to replace, reform or end the program. In 2018, the Congressional Budget Office estimated that eliminating the quality bonus program would lower federal spending by almost $100 billion over ten years. Given the sharp increase in both actual and projected Medicare Advantage enrollment since CBO’s analysis, the savings from eliminating bonuses could be substantially higher. For example, 33 million people were enrolled in Medicare Advantage in 2024, which was 5 million more than CBO projected at the time of the analysis, and CBO’s most recent projections for future Medicare Advantage enrollment are nearly 30% higher than previously projected. The degree to which changes to the quality bonus program would impact plan quality or the availability of supplemental benefits would depend on the specifics of any proposal and how insurers modified plan offerings in response. Though the proposal that had reportedly been under consideration by the Senate, the No UPCODE Act, does not directly address the quality bonus program, to the extent the changes in the legislation results in lower risk scores of Medicare Advantage enrollees, spending under the quality bonus program would also be lower.

This analysis examines trends in bonus payments to Medicare Advantage plans, enrollment in plans in bonus status (plans that qualify for a benchmark increase based on their quality star rating), and how these measures vary across plan types using publicly available information on Medicare Advantage enrollment, payment rates, and quality ratings.

Key Takeaways:

• Federal spending on Medicare Advantage bonus payments will total at least $12.7 billion in 2025, similar to spending in 2023, and more than four times higher than in 2015. Since 2015, Medicare has spent at least $87 billion on quality bonus program payments.
• Most Medicare Advantage enrollees (75%) are in plans that are receiving bonus payments in 2025. Since 2019, at least 7 in 10 Medicare Advantage enrollees have been in a plan receiving a bonus payment.
• The average bonus payment per enrollee is highest for employer- and union-sponsored Medicare Advantage plans ($438) and lowest for special needs plans ($332), raising questions about the implications of the quality bonus program for high-need beneficiaries.

Medicare Advantage plans will receive at least $12.7 billion in bonus payments in 2025.

Estimated bonus payments to Medicare Advantage plans will total at least $12.7 billion in 2025, similar to 2023. Bonus payment spending had decreased slightly in 2024 following a decline in star ratings after the expiration of COVID-19 pandemic-era policies. Those policies prevented individual measures that go into calculating the star ratings from declining between 2021 and 2022 and temporarily increased star ratings for certain plans. Bonus payments have increased sharply since the program started, more than quadrupling from $3.0 billion in 2015 to $12.7 billion in 2025 (Figure 1). The total spending on the quality bonus program is less than 2.5% of the projected payments to Medicare Advantage plans in 2025 ($540 billion).

Medicare spending on bonus payments has grown faster than enrollment in Medicare Advantage, which has doubled since 2015. This spending comes at a time when the Medicare program is facing growing fiscal pressures. Medicare Advantage benchmarks (and corresponding spending) have grown faster than traditional Medicare spending in part because of the increase in bonus payments.

These estimates are a lower bound because bonus payments are risk adjusted, which is likely to increase bonus payments. The estimates also do not include additional spending that results if plans increase their bids when their benchmark is higher because of being in bonus status. For example, a plan might increase its bid to increase payments to providers, add more expensive providers to its network, or retain a larger amount as profit, provided they meet medical loss ratio requirements.

The distribution of bonus spending across plan types is similar to the distribution of enrollment in 2025, though employer plans comprise a slightly larger share of bonus spending than enrollment. Individual plans account for 61% ($7.8 billion) of bonus spending and 62% of enrollment, employer plans account for 20% ($2.5 billion) of bonus spending and 17% of enrollment, and special needs plans account for 19% ($2.4 billion) of bonus spending and 21% of enrollment in 2025 (Appendix Table 1).

Most Medicare Advantage enrollees (75%) are in plans that receive bonus payments.

In 2025, nearly 26 million people, or 75% of Medicare Advantage enrollees, are in plans that are receiving bonuses. That compares to just under 9 million people (55%) in 2015 (Figure 2). The share of enrollees in plans that receive bonus payments in 2025 is slightly higher than the previous year (72%).

Average annual bonus payments are highest for enrollees in employer- and union-sponsored plans.

In 2025, Medicare Advantage plans receive an average annual bonus of $372 per enrollee, more than double the $184 average bonus per enrollee in 2015 (Appendix Table 2). Average bonuses in group employer- and union-sponsored plans have consistently been higher than for other plans. The average bonus per enrollee in a group employer- or union-sponsored Medicare Advantage plan is $438 in 2025, compared to $368 for individual plans and $332 for special needs plans (SNPs) (Figure 3).

Bonuses are higher per enrollee in employer plans because these plans have higher average star ratings, resulting in a larger share of enrollees receiving coverage from plans that qualify for bonuses. Across the entire period of 2015 to 2025, the share of all enrollees in employer- or union-sponsored plans that received a bonus never went below 80%. In contrast, at least 80% of enrollees in individual and special needs plans were in a plan that received a bonus in only one year – 2023 (Figure 4).

Relatively low bonus payments for special needs plans, raises questions about the implications for higher need beneficiaries, including people who are dually eligible for Medicare and Medicaid.

On May 22, 2025, the U.S. House of Representatives passed a budget reconciliation bill—called the One Big Beautiful Bill Act (OBBBA)—that includes significant reductions in federal Medicaid spending to help offset the cost of tax cuts, along with changes to the Affordable Care Act (ACA), immigration reforms and  other provisions. Together, the combination of policies that increase the number of uninsured, policies that limit the ability of states to raise revenues to increase provider payments, and other changes are expected to have financial consequences for hospitals, affecting some hospitals more (or less) than others. Financial pressure on hospitals could affect patient care to the extent that hospitals respond by cutting certain expenses—such as by offering fewer services, laying off staff, or investing less in quality improvements—or close altogether, especially in rural areas. This is in addition to the direct impact of losing coverage on individuals, who would be less likely to obtain needed care as a result.

According to the Congressional Budget Office (CBO), the bill is projected to cut federal Medicaid spending by $793 billion and reduce spending related to the ACA Marketplaces by $268 billion over a decade, totaling $1.04 trillion in cuts after accounting for the indirect effects on federal revenues. CBO projects that the number of uninsured Americans would increase by 10.9 million as a result of the OBBBA—7.8 million due to changes to Medicaid and 3.1 million due to changes to the ACA exchanges—and by 16.0 million when combined with the expected expiration of the ACA enhanced premium tax credits and the implementation of proposed rules for the ACA exchanges. The substantial increase in uninsured Americans would likely lead to more uncompensated care, putting an additional strain on hospital finances. The bill would also restrict states’ future ability to raise the state share of Medicaid revenues through provider taxes, which often support higher payments for hospitals, and would limit the ability of states to create new state directed payments to increase payments to hospitals. The impact of the OBBBA on hospital finances would vary across hospitals. For example, it is likely that the OBBBA would have a disproportionate impact on hospitals caring for a relatively large number of Medicaid patients and other patients with low incomes.

Because the OBBBA is projected to increase the deficit, CBO projects it would trigger about $500 billion in mandatory reductions in Medicare spending between 2026 and 2034, including a 4% reduction in payments to hospitals, unless Congress takes action to circumvent them (which Congress has historically done).

This issue brief discusses the potential implications of the OBBBA for hospitals and explains how some hospitals (such as rural hospitals as well as urban hospitals that serve a large share of Medicaid patients) may be less well positioned than others (such as hospitals that serve a large share of commercial patients) to absorb revenue losses given their current financial status. Analyses of hospital operating margins are based primarily on RAND Hospital Data and reflect 2023 numbers.

About 4 in 10 hospitals had negative operating margins, and 12% had margins below -10%, but 24% had margins at or above 10%, suggesting some will have greater capacity than others to absorb any losses

About four in ten (39%) hospitals had negative operating margins in 2023 (Figure 1). Operating margins are a measure of financial standing that indicate the extent to which hospitals profit or lose money on patient care and other operating activities. Hospitals with negative operating margins could have a particularly hard time absorbing any losses resulting from the reconciliation bill. This could especially be the case for the more than one in ten (12%) hospitals with operating margins below -10%.

However, the remaining three fifths (61%) of hospitals had positive margins, though some of these hospitals had relatively modest margins (e.g., 22% had positive margins of less than 5%).  Roughly a quarter of all hospitals (24%) had relatively high margins of at least 10%. These hospitals may be most likely to withstand major spending reductions in the OBBBA.

Rural hospitals were more likely to have negative margins than urban hospitals

A larger share of rural versus urban hospitals had negative margins (44% versus 35%) (Figure 2). The share with negative margins was especially high among hospitals in the most remote rural areas (49%), defined here as rural areas not adjacent to a metropolitan area.

Rural hospitals have a unique set of financial challenges and could have an especially hard time adjusting to any losses resulting from the OBBBA. For example, rural hospitals tend to be smaller facilities with lower volume. Operating at a smaller scale can lead to a higher cost of providing care on average—e.g., to the extent that the fixed costs of operating a hospital, such as maintaining a minimum number of staff, are spread across fewer patients—and may limit the ability of rural hospitals to offer specialized services.

The ability to absorb any losses resulting from the reconciliation bill would likely vary across rural hospitals, as is true of hospitals overall. More than four in ten (44%) rural hospitals had negative margins, and about one in seven (15%) had margins of less than -10%. Negative margins were more common among rural hospitals in states that had not expanded Medicaid (especially those in the most rural areas) and among sole community, Medicare-dependent, and low-volume hospitals, among other differences. A major provision in the reconciliation bill – a work and reporting requirement in Medicaid – would only apply to the Medicaid expansion. However, other provisions, such as cutbacks on the ACA Marketplaces, would likely disproportionately affect states that have not expanded Medicaid.

At the same time, more than half (56%) of all rural hospitals had positive margins. Nearly a quarter (23%) of rural hospitals had relatively modest margins (less than 5%) while about one fifth (19%) had margins of at least 10%. Positive margins were more common among rural hospitals with more beds, with higher occupancy, that were affiliated with a health system, and that were not government-owned.

Hospitals that serve a large share of Medicaid patients in urban and rural areas were more likely than others to have negative margins, and they could be disproportionately affected by the House-passed bill

Hospitals where Medicaid covered a high share of stays—a group that could also have an especially hard time absorbing any losses resulting from the OBBBA—were more likely than others to have negative margins. For example, 45% of hospitals with high shares of Medicaid patients had negative margins versus 35% among hospitals with low shares. The share with negative margins was relatively high among hospitals with high Medicaid shares in both urban and rural areas (44% and 48%, respectively). Relatedly, operating margins were lower than average among hospitals with high Medicaid shares (e.g., they were 2.3% among hospitals with high shares versus 7.0% among those with low shares).

Hospitals caring for a disproportionate share of Medicaid patients and other patients with low incomes have unique financial challenges. For example, Medicaid and other public payers tend to reimburse at lower rates than private insurance, and it may be more expensive to treat patients with low incomes in ways that are not captured in reimbursement rates.

Further, it is likely that hospitals caring for a relatively large share of Medicaid patients and other patients with low incomes would take the biggest hit under the OBBBA, since the bill achieves much of its savings through Medicaid cuts along with changes to the ACA exchanges that would increase the number of uninsured individuals.

Hospitals with for-profit ownership, high commercial shares, and high commercial-to-Medicare price ratios were more likely to have positive margins than other hospitals, among other differences

While about six tenths (61%) of hospitals had negative operating margins, the share was higher among for-profit hospitals (71%), hospitals where commercial payers cover a relatively large share of stays (73%), hospitals with high commercial-to-Medicare price ratios (75%), hospitals that were part of a broader health system (66%), and hospitals with high market shares (73%) (Figure 4). These hospitals may have an easier time than others in absorbing any losses related to the OBBBA.

In most states (29), at least four in ten hospitals had negative margins in 2023

The share of hospitals with negative margins varied across states, but in more than half of all states (29 states), at least four in ten hospitals had negative margins (Figure 5). At least half of hospitals had negative margins in 14 states. This includes a mixture of red states (such as Kansas and Oklahoma) and blue states (such as Massachusetts and New York). At least 60% of hospitals had negative margins in four states: Kansas, Mississippi, Vermont, and Washington.

Differences in hospital finances across states may be attributable to variations in demographics, hospital ownership and type, commercial reimbursement rates, and state and local health and tax policy. For instance, the share of hospitals in the red may have been relatively low in Texas in part because the state has a relatively large number of for-profit hospitals (which are less likely to have negative margins) among other factors. The relatively low share of hospitals with negative margins in Florida may be at least partly due to relatively high commercial prices as a percent of Medicare rates.

Some states with a relatively large share of hospitals with negative margins may be disproportionately affected by the OBBBA and other policy changes. For instance, three fifths (60%) of hospitals in Mississippi had negative margins. If the OBBBA were enacted, the ACA enhanced tax credits expired, and the proposed rules for the ACA Marketplaces were implemented, then the share of people who are uninsured is expected to increase, putting a particular strain on hospitals in states that experience large increases in the number of uninsured.  The uninsured rate in Mississippi would increase by 6 percentage points—one of the highest increases in the country—based on KFF estimates. As another example, in Washington, where more than three fifths (63%) of hospitals had negative margins, the reduction in federal Medicaid as a share of baseline spending resulting from the OBBBA would be the largest of all states (17% over ten years) according to KFF estimates.

The bill could trigger about $500 billion in mandatory Medicare cuts, including cuts in payments to hospitals and other providers, unless Congress intervenes

Because the bill is expected to increase the federal deficit, CBO projects it would trigger about $500 billion in mandatory cuts to Medicare spending between 2026 and 2034—including a 4% cut in payments to hospitals and other providers—unless Congress intervened. The automatic reductions in Medicare payments to hospitals and other health care providers and plans, known as “sequestration,” would be required under the Statutory Pay-As-You-Go (PAYGO) Act. If these cuts did go into effect, they would come at a time when the Medicare Payment Advisory Commission has recommended that Congress increase Medicare payment rates in 2026 relative to current law and could raise concerns about the adequacy of Medicare reimbursement. Historically, Congress has voted to waive automatic Medicare payment reductions due to sequestration under statutory PAYGO rules.