The 2025 federal budget reconciliation bill passed by the House aims to promote the use of health savings accounts (HSA) through a variety of changes to the HSA provisions included in the 2003 law that created HSAs. While these changes could provide more incentives for individuals to use HSAs, they would cost the federal government almost $45 billion over 10 years, according to an estimate from the Congressional Budget Office. This Policy Watch provides an overview of HSAs and examines key HSA-related provisions in the House-passed budget reconciliation bill and their costs to the federal budget.

What Are HSAs?

HSAs are tax-advantaged spending accounts designed to help enrollees in high-deductible plans (HDHPs) pay out-of-pocket medical costs. Individuals can contribute amounts and later make withdrawals to pay for unreimbursed qualified medical expenses (e.g., deductibles, copays, coinsurance, services not covered by insurance). There are annual contribution limits for individuals (for 2025, the contribution limit is $4,300 for individual coverage, $8,550 for a family). Employers are also eligible to make contributions to their employees’ HSAs, as well as family members on behalf of an individual with an HSA. HSAs are owned by the individual, not the employer. These accounts are characterized as “portable,” meaning they can be carried to a new job or retained upon retirement or loss of work.

A key feature of these accounts is that an individual must be enrolled in an HSA-eligible HDHP with a deductible of at least $1,650 for an individual or $3,300 for a family in 2025. HSA enrollees must pay all medical costs out-of-pocket until they reach the deductible, except for specified preventive services and certain insulin products, which insurance can start paying for before the deductible is met.

Also, an individual cannot have other health coverage in addition to the HDHP to be eligible for an HSA. So, receipt of medical services outside of the HDHP may jeopardize eligibility for an HSA. Additionally, once an individual is enrolled in Medicare, they can no longer contribute to an HSA (although they can still access funds in an existing HSA).

Health savings accounts are unique in offering a “triple-tax advantage”: contributions are tax deductible, growth of funds via investment is tax-free and account balances roll over, and withdrawals are tax-free if they are used for qualified medical expenses (e.g., doctor visits, prescription drugs, medical equipment) incurred after the HSA is established.

How Have HSAs Been Used?

According to the KFF 2024 Employer Health Benefits Survey, 22% of firms offering health benefits offered a high-deductible health plan (HDHP) paired with an HSA to their employees. Larger firms offering health benefits are much more likely than smaller firms to offer an HSA-qualified HDHP (50% for offering firms with 200 or more workers compared to 21% for firms with 3-199 workers). In addition to the contributions that enrollees can make to their HSA, employers are also permitted to contribute to covered workers’ HSAs. Among firms that contribute, the average employer contribution is $842 for single coverage and $1,539 for family coverage.

HSA-qualified HDHPs are also offered on the Affordable Care Act (ACA) Marketplace; however, the share of total health plans offered on the Marketplace that are HSA-eligible HDHPs has decreased from 7% in 2017 to 3% in 2023, and total enrollment in these plans has fallen from 8% in 2017 to 5% in 2022. Even though the deductibles of most HDHPs offered on the ACA Marketplace well exceed the minimum deductible requirements for HSAs, some HDHPs sold on the Marketplace cover services before the deductible in addition to the specific health service designs that the IRS does not permit for HSA-eligible plans. As a result, some Marketplace HDHPs cannot be paired with an HSA. The drop in HSA availability on the Marketplace could also be because the Centers for Medicare and Medicaid Services (CMS) limits insurers on the exchange to offering no more than two non-standardized plans for each standardized plan they offer in a metal level for a given product/network type (e.g., HMO, PPO).

There are disparities in HSA contributions and balances across race and income groups. Research has found that higher-income individuals are more likely than those with lower incomes to be enrolled in an HSA. One explanation for this difference could be that those with higher incomes have more means to pay for out-of-pocket expenses for medical care received pre-deductible. Additionally, the tax advantages of HSAs may be particularly attractive to higher-income individuals, who may have more disposable income to maximize contributions than individuals with lower-incomes, who may not be able to afford to contribute to an HSA. Because they are in a higher tax bracket, the reduction of taxable income by making HSA contributions is also of greater value to a higher-income family than to a family with a household income in a lower tax bracket (or that earns too little to file a federal tax return). For instance, a married couple with a household income of $600,000 saves 35 cents for every dollar they contribute to their HSA, while a married couple making a combined $80,000 saves 22 cents per dollar contributed to their HSA.

Research also finds that HSA enrollment is skewed more towards White HDHP enrollees than their Black and Hispanic counterparts, which might be exacerbating existing racial income disparities and financial barriers to health care. In an analysis conducted by the Employee Benefits Research Institute (EBRI) in 2022, accountholders living in disproportionately Black or Hispanic zip codes had, on average, lower HSA balances and lower contributions than accountholders living in disproportionately White zip codes.

Investing HSA balances provides a unique, untaxed wealth-building vehicle for those who are aware of this option and have the means to do so. Despite the appeal of the tax-free investment option though, only 9% of HSA holders in 2024 invested a portion of their funds, according to a Devenir report. However, investments made up a more substantial portion of HSA assets that same year, representing a little over two-fifths of total assets. Separately, EBRI found that disproportionately White and Asian zip codes, as well as zip codes with a higher median household income, had a higher propensity to invest HSA funds in 2022.

How Have Standards for HSAs Changed in Recent Years?

The first Trump administration was a proponent of expanding access to HSAs. In 2019, an Executive Order and subsequent guidance expanded the list of services allowed to be covered pre-deductible by HSA-qualified HDHPs to include preventive services that help maintain health status for those with certain chronic conditions. This definition was further expanded in IRS guidance from 2024. Congress in COVID-relief legislation permitted telehealth services to be covered by HDHPs pre-deductible up until the end of last year. In the Inflation Reduction Act, Congress changed the HSA law to allow individuals to access certain insulin products pre-deductible.

How Would the House-Passed Budget Reconciliation Bill Expand HSAs?

If passed by the Senate and signed into law, key changes to HSAs would include:

Making gym memberships a qualified medical expense that individuals can pay for with their HSA. The reconciliation bill would allow HSA distributions to pay for certain sports and fitness expenses, such as gym memberships and participation/instruction in physical activities. Annual HSA distributions for these expenses would be capped at $500 for single taxpayers and $1,000 for joint or head of household filers. This is the costliest provision in the budget reconciliation bill: $10.5 billion from 2025 to 2034.

Allowing individuals to qualify for an HSA even if they are covered by a direct primary care arrangement or an on-site employee clinic. Direct primary care (DPC) is a different model of primary care delivery in which patients pay a periodic fee to a practice that covers unlimited primary care services (e.g., vaccines, lab work, office visits, consultive services) without cost-sharing. DPC does not usually cover specialized and other services and is therefore not generally considered comprehensive coverage. Some HDHP enrollees and others choose to add DPC to meet their primary care needs. The budget reconciliation bill stipulates that DPCs that meet specific requirements will not be treated as a health plan. In addition, the legislation would also treat dollars used to pay DPC fees as an HSA-specific qualified medical expense. This would allow HSA holders to add it on as a complement to their HDHP and use their HSA funds to pay DPC membership fees, with the caveat that these fees cannot exceed $150 monthly ($1,800 annually) in order to not be considered a health plan. This provision is projected to cost about $2.8 billion from 2025 to 2034.

On-site employee sponsored health clinics are health care facilities on an employer’s premises (or facilities used primarily for the same employer) that provide free or reduced cost services to employees. Current law makes an individual ineligible to use an HSA if they have access to an on-site employee clinic that provides significant health benefits (i.e., providing care for all medical needs for free or waiving copays and deductibles) in addition to disregarded coverage and preventive services. The budget reconciliation bill proposes to not treat on-site employee clinics offering qualified items and services as health plans for purposes of determining HSA eligibility if the services provided at the clinic meet certain parameters. This provision is projected to cost about $2.4 billion from 2025 to 2034.

Increasing the amount certain individuals can contribute to their HSAs in a year and allowing contributions that the law currently restricts. For example:

• The annual contribution limit to a health savings account for an individual would increase by $4,300 for individuals with self-only coverage and by $8,550 for family coverage, which doubles the 2025 basic limits on annual contributions. This increase would phase out at certain income levels ($75,000 to $100,000 of adjusted gross income; for joint filers with family coverage, $150,000 to $200,000 of adjusted gross income). This provision is projected to cost about $8.4 billion from 2025 to 2034.
• Individuals who are age 65 or older and enrolled only in Medicare Part A (not Part B) would be allowed to still make HSA contributions. This provision is projected to cost about $7.4 billion from 2025 to 2034. Other tax code changes would also apply to these individuals.

Treating Marketplace bronze plans and catastrophic plans as a high-deductible plan that can be paired with an HSA. To increase accessibility of HSAs in the individual market, bronze plans and catastrophic plans would be treated as HDHPs. Bronze plans have the highest cost-sharing and lowest premiums among metal-tier plans, while catastrophic plans have lower premiums than bronze plans and deductibles are equal to the ACA annual limit on out-of-pocket costs ($9,200 for individual coverage in 2025 and $10,150 in 2026). This provision is projected to cost about $3.6 billion from 2025 to 2034.

How Much Would the HSA-related Provisions of the House Budget Reconciliation Bill Cost the Federal Government?

If passed by the Senate and signed into law, HSA tax deductions would cost the federal government almost $14.8 billion in lost revenue in fiscal year (FY) 2025, and if eligibility and regulations governing the accounts remained the same, they would cost an estimated $180.9 billion from 2025 to 2034. The House-passed budget reconciliation bill contains ten reforms that broaden the range of HSA-eligible qualified medical expenses, loosen restrictions on individual contributions, and increase access to HSAs. According to the Congressional Budget Office’s estimated revenue effects for this bill, these expansions would increase the total projected cost of HSAs by approximately $44.3 billion over the next ten years (Figure 1).

Looking Forward

Efforts to expand HSAs would mean new large government expenditures, at a time when proposed tax cuts and significant changes to Medicaid and ACA programs will leave more people without coverage. Congress arguably created HSAs in 2003 to be paired with HDHPs as a tool to pay for current health care costs and to incentivize price shopping for anticipated health services. Today, expansions to HSAs appear to focus less on cost-conscious shopping, as federal rules have added more pre-deductible coverage of certain items and services and expand the items that can be treated as medical services, but only for consumers with health savings accounts. Proposals aimed at promoting “choice and control” would allow more individuals to use funds in an HSA to pay directly for certain services. Although some pre-deductible items and services are aimed at managing specific chronic illnesses, these provisions do not reach all consumers who could benefit from other types of specialized items and services, which often come at a high cost, to manage and treat their chronic condition.

Note: This brief was updated on May 29, 2025 to update fully state-funded coverage programs for adults and children.

As of 2023, there were 22.4 million individuals who are noncitizen immigrants residing in the U.S., accounting for about 7% of the country’s total population. Among noncitizen immigrants, about six in ten are lawfully present immigrants while the remaining four in ten are undocumented immigrants. Noncitizen immigrants, particularly those who are undocumented, face significant barriers to accessing health coverage and care and are significantly more likely than citizens to be uninsured. These higher uninsured rates reflect more limited access to private coverage and eligibility restrictions for federally funded coverage options. Some states have taken up options in Medicaid and the Children’s Health Insurance Program (CHIP) to expand coverage for lawfully present immigrants and/or established fully state-funded programs to fill gaps in coverage for immigrants. This brief provides an overview of state take-up of these options and state health coverage programs for immigrants regardless of status. It also examines how health coverage and care for immigrants vary by state coverage policies using data from the 2023 KFF/LA Times Survey of Immigrants.

There has been increased state action to expand coverage to immigrants, including immigrant adults, in recent years although these efforts are limited by funding constraints. As of April 2025, 14 states plus D.C. provide fully state-funded coverage for income-eligible children regardless of immigration status, seven states plus D.C. provide fully state-funded coverage to some income-eligible adults regardless of status, and most states have taken up options in Medicaid and CHIP to expand coverage to lawfully present immigrant children and pregnant women. Data and research suggest that coverage expansions for immigrants are associated with lower uninsured rates and improved access to care. A provision in the budget reconciliation bill being considered by Congress would penalize states that have used their own funds to expand coverage to immigrants, including undocumented immigrants, by reducing the federal Medicaid match rates for their Affordable Care Act Medicaid expansion group. Under this provision, there would be cost shift to states if they maintain their coverage expansions or coverage losses among immigrant families if they eliminate them.

Health Coverage for Immigrants

Noncitizen immigrants have high uninsured rates because they have more limited access to private coverage due to working in jobs that are less likely to offer coverage and face eligibility restrictions for federally funded coverage options. Lawfully present immigrants may qualify for Medicaid and CHIP but are subject to eligibility restrictions that result in some, particularly recent immigrants, being ineligible to enroll even if they meet other eligibility criteria. For example, many must meet a five-year waiting period before qualifying for Medicaid or CHIP. Lawfully present immigrants can purchase coverage through the Affordable Care Act (ACA) Marketplaces and may receive tax credits for this coverage without a waiting period. Undocumented immigrants are ineligible to enroll in Medicaid or CHIP or to purchase coverage through the ACA Marketplaces. Medicaid payments for emergency services reimburse hospitals for emergency care they are obligated to provide to individuals who meet other Medicaid eligibility requirements (such as income) but who do not have an eligible immigration status, including undocumented immigrants. These payments help cover costs to hospitals for providing emergency care to immigrants who remain ineligible for Medicaid but are not coverage for individuals.

Medicaid and CHIP Options for Lawfully Present Immigrants

In general, lawfully present immigrants must have a “qualified” immigration status to be eligible for Medicaid or CHIP, and many, including most lawful permanent residents or “green card” holders, must wait five years after obtaining qualified status before they may enroll even if they meet other eligibility requirements. Some immigrants, such as those with Temporary Protected Status, are lawfully present but do not have a qualified status and are not eligible to enroll in Medicaid or CHIP regardless of their length of time in the country. For children and pregnant people, states can cover lawfully residing immigrants without a five-year wait, otherwise known as the Immigrant Children’s Health Improvement Act (ICHIA) option. As of April 2025, 37 states plus D.C. have taken up this option for children and 31 states plus D.C. have elected the option for pregnant people (Figure 1). Indiana plans to implement the option for children and pregnant people in 2025.

A total of 24 states plus D.C. have also extended coverage through the CHIP From-Conception-to-End-of-Pregnancy (FCEP) option, which provides prenatal care and pregnancy related benefits to targeted low-income children beginning from conception to end of pregnancy regardless of their parent’s citizenship or immigration status (Figure 2). While other pregnancy-related coverage in Medicaid and CHIP requires 60 days of postpartum coverage, the CHIP FCEP option does not include this coverage. However, some states that took up this option provide postpartum coverage through a CHIP health services initiative or using state-only funding. Twelve of the states that have implemented the FCEP option (California, Colorado, Connecticut, Illinois, Maine, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Texas, and Washington) plus D.C. have used state funding or CHIP health services initiatives to extend postpartum coverage to 12 months to align with the Medicaid extension established by the American Rescue Plan Act. Maryland extends coverage for four months postpartum, and Alabama and Virigina extend coverage for 60 days postpartum using CHIP health services initiatives.

Fully State-Funded Coverage

Beyond state take-up of options in Medicaid and CHIP, some states provide fully state-funded coverage to fill gaps in coverage for immigrants. States vary in the eligibility and scope of benefits offered through these coverage programs. These programs extend coverage to lawfully present immigrants who are in the five-year waiting period for Medicaid or CHIP or do not have “qualified status” and are ineligible for federally funded coverage as well as undocumented immigrants. These programs also extended coverage to Deferred Action for Childhood Arrivals (DACA) recipients who previously were not considered lawfully present for purposes of eligibility for federally funded health coverage programs. Effective November 1, 2024, new regulations changed the definition of lawfully present to include DACA recipients for purposes of eligibility to purchase coverage through the ACA Marketplaces and to receive tax credits to help pay for premiums and cost sharing. However, as of April 2025, implementation of this coverage expansion is halted in 19 states due to pending litigation.

As of May 2025, 14 states plus D.C. provide comprehensive state-funded coverage for children regardless of immigration status (Figure 3). These states include California, Colorado, Connecticut, Illinois, Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Utah, Vermont, Washington, and D.C. Additionally, two of these states (New Jersey and Vermont) also provide state-funded coverage to income-eligible pregnant people regardless of immigration status, with Vermont extending this coverage for 12 months postpartum.

As of April 2025, seven states (California, Colorado, Illinois, Minnesota, New York, Oregon, Washington) plus D.C. have also expanded fully state-funded coverage to some income-eligible adults regardless of immigration status (Figure 4). Some additional states cover some income-eligible adults who are not otherwise eligible due to immigration status using state-only funds but limit coverage to specific groups, such as lawfully present immigrants who are in the five-year waiting period for Medicaid coverage, or provide more limited benefits.

• California extended state-funded health coverage to income-eligible young adults ages 19-25 in January 2020, adults ages 50 and older in May 2022 and adults ages 26 to 49 regardless of immigration status in January 2024, making all low-income immigrants in the state eligible for state-funded health coverage regardless of immigration status. California plans to pause enrollment for undocumented adults 19 and older in 2026.
• Colorado uses state funds to provide Marketplace coverage with premium subsidies to individuals with incomes at or below 300% of the federal poverty level (FPL) regardless of immigration status through OmniSalud using a section 1332 waiver. Colorado previously provided subsidized plans with $0 premiums through SilverEnhanced Savings, but the program is capped at 12,000 people and has paused enrollment for 2025 due to funding constraints.
• D.C. provides health coverage to low-income adults 21 and older regardless of immigration status through its longstanding locally funded Healthcare Alliance program.
• Illinois extended state-funded coverage to low-income individuals ages 65 and older regardless of immigration status through its Health Benefits for Immigrant Seniors (HBIS) program in December 2020 but has paused enrollment due to funding constraints as of April 2025. Illinois previously extended coverage to low-income immigrants ages 42 to 64 regardless of immigration status through the Health Benefits for Immigrant Adults (HBIA) program in 2022 but paused enrollment with plans to end HBIA coverage by July 2025 due to funding constraints.
• Minnesota extended state-funded health coverage to income-eligible individuals regardless of immigration status in January 2025. However, Minnesota plans to end coverage for undocumented adults by 2026.
• New York extended state-funded coverage to individuals ages 65 and older regardless of immigration status beginning in 2023.
• Oregon extended state-funded health coverage to all income-eligible adults regardless of immigration status in July 2023.
• Washington uses state funds to provide Marketplace coverage with premium subsidies to individuals with incomes up to 250% FPL regardless of immigration status through Cascade Care using a section 1332 waiver, but subsidies are no longer available for 2025 due to funding constraints. In July 2024, Washington extended state-funded health coverage to individuals with incomes up to 138% FPL regardless of immigration status, but the program is capped at 13,000 people and has paused enrollment for 2025 due to funding constraints.

In addition to these states, Maryland plans to allow income-eligible individuals to purchase Marketplace coverage without subsidies regardless of immigration status starting November 2025 through a section 1332 waiver.

Impact of State Coverage Expansions on Health Care Access and Use

Data suggest that state coverage options for immigrants make a difference in their health coverage and health care access and use. The 2023 KFF/LA Times Survey of Immigrants shows that immigrants residing in states with more expansive coverage policies for immigrants have higher rates of health coverage, are less likely to postpone or go without care, and are more likely to receive care and to have a trusted health care provider compared to their counterparts living in states with less expansive coverage policies, as described below. (See Box 1).

Immigrant adults in states that provide more expansive coverage, including the ACA Medicaid expansion for low-income adults and at least some state-funded coverage for immigrants, are half as likely to be uninsured as those in states with less expansive coverage (11% vs. 22%). This difference is driven by higher rates of Medicaid and other public coverage (including state-funded coverage) in states with more expansive coverage compared to those with less expansive policies (23% vs. 9%) while rates of private and Medicare coverage are similar (Figure 5).

Reflecting higher rates of health coverage, immigrant adults in states with more expansive policies are somewhat less likely to say they skipped or postponed care due to cost. Immigrants in states with more expansive policies are half as likely to report delaying or going without medical care (4% vs. 10%) or dental care (7% vs. 14%) due to cost than those in less expansive states (Figure 6).

Differences in use of care among immigrants by state coverage policies are smaller, which may reflect use of safety-net resources available to uninsured immigrants such as community health centers and emergency rooms. Most (77%) immigrant adults in the U.S. report seeking health care in the past year. The shares reporting seeking health care are slightly lower in states with less expansive coverage (74%) compared to those in states with more expansive coverage (79%), although the majority still report seeking care. This pattern may reflect use of safety-net resources available to uninsured immigrants such as community health centers or emergency rooms. Immigrant adults are more likely than U.S.-born adults to say they rely on community health centers (CHCs) as their usual source of care, reflecting CHCs’ in providing free or low-cost care to low-income and uninsured populations and their ability to provide culturally and linguistically appropriate care. Immigrants in states with less expansive policies are somewhat more likely to say they use a CHC (33% vs. 28%) and somewhat less likely to say they use a private doctor’s office (39% vs. 44%) (Figure 7). Immigrant adults in states with less expansive policies are also less likely to report having a medical provider they trust to answer questions about their health than those in more expansive states (68% vs. 78%).

Other research suggests that state coverage expansions for immigrants can reduce uninsured rates, increase health care use, lower costs, and improve health outcomes. Noncitizen children are more likely to be uninsured and experience more delays in health care due to cost than their citizen siblings. Citizen children with a noncitizen parent are also more likely to be uninsured than citizen children with U.S-born parents. California’s 2016 expansion to cover low-income children regardless of immigration status was associated with a 34% decline in uninsurance rates. Similarly, a study found that children who reside in states that have expanded coverage to all children regardless of immigration status were less likely to be uninsured, to forgo medical or dental care, and to go without a preventive health visit than children residing in states that have not expanded coverage. Other research has found that expanding Medicaid coverage to pregnant people regardless of immigration status was associated with higher rates of prenatal care and improved outcomes including increases in average gestation length and birth weight among newborns, while more restrictive state coverage policies were associated with reduced postpartum care utilization. The cost of providing insurance to immigrant adults through Medicaid expansion was also found to be less than half the per person cost of doing so for U.S-born adults. Recent estimates also suggest that the state-funded expansion to all immigrants regardless of status in California could reduce poverty among noncitizen immigrants and their families.

PEPFAR’s latest reauthorization expired on March 25, 2025, heightening the stress the program is now experiencing as the Trump administration reviews and rolls back foreign aid. It has also raised several questions about whether PEPFAR can continue in the absence of reauthorization. This policy watch provides an update on what this means for PEPFAR. As it notes, because PEPFAR operates largely under permanent authorities of U.S. law, the program continues as long as funds are appropriated by Congress (although certain time-bound requirements lapsed as of March 25, 2025). At the same time, the changes and reforms being instituted by the Trump administration are posing larger challenges for PEPFAR going forward.

What is “authorizing” legislation, and how does it differ from “appropriations” legislation?

There is an important distinction between “authorizing” and “appropriations” legislation. Authorizing (or reauthorizing) legislation, which is the purview of Congressional authorizing committees, establishes programs and policies, oversight and reporting requirements, and provides guidance to appropriators on funding amounts and conditions. It may include time-bound provisions or may provide no end date for programs to operate, which they can do as long as they are funded. Such legislation can be put forward as a standalone bill or attached to another legislative vehicle. Appropriations legislation, under the purview of Congressional appropriations committees, provides budget authority, allowing funding to be provided to an agency or program; absent an authorization (or reauthorization), an appropriations bill can have the effect of allowing the continued operation of an existing program by providing funding.

How was PEPFAR created?

PEPFAR was created in 2003 through authorizing legislation (The Leadership Act), which established the program, its structure – including creating a new position of U.S. Global AIDS Coordinator at the Department of State (with the rank of Ambassador) and participation in the Global Fund – and other program aspects without any end date or sunsetting of the program (with the exception of some provisions). This means that PEPFAR largely operates under permanent authorities of U.S. law that allow for the program to continue as long as Congress appropriates funding. The recent Continuing Resolution for FY 2025 included the same level of funding for PEPFAR as provided in FY 2024.

What is PEPFAR “reauthorization”?

Since PEPFAR was a new program when created in 2003 and because it included some time-limited provisions, Congress has passed reauthorizing legislation four times, some of which included modifications to adapt to new circumstances and others with only date changes (extensions) to allow expiring provisions to continue (see Table 1 and the KFF side-by-side of PEPFAR legislation over time.). Reauthorization has also served to demonstrate Congress’ support for the program. The first three reauthorizations of the program were each for five-year periods. The most recent was short-term, extending expiring provisions for only one year, largely due to partisan debate related to abortion. This is not the first time PEPFAR reauthorization has lapsed while Congress considered reauthorization. For example, in 2018, some provisions of the PEPFAR Stewardship Act lapsed at the end of FY 2018 (Sept. 30, 2018) until the PEPFAR Extension Act was enacted more than two months later on Dec. 11, 2018, and in 2023, some provisions of the PEPFAR Extension Act lapsed at the end of FY 2023 (Sept. 30, 2023) until the recent short-term extension was enacted nearly six months later on March 23, 2024.

Table 1

PEPFAR Legislation

What happened when PEPFAR’s latest reauthorization “expired”?

Under the recent short-term reauthorization of PEPFAR, there were eight time-bound requirements that “sunset” on March 25, 2025, when they were not extended by Congress. These included requirements related to Global Fund support, a funding directive for orphans and vulnerable children (OVC), and others (see Table 2). This means that these provisions are not currently required, although the administration can choose to follow them.

Table 2

PEPFAR Reauthorization’s Time-Bound Provisions

Does this mean that the PEPFAR program is not authorized anymore?

No. PEPFAR is a permanent part of U.S. law and will continue, provided funds are appropriated, which Congress has once again done for FY 2025, the current fiscal year.

Are there any other impacts of having a lapsed reauthorization?

If PEPFAR is not reauthorized this year or in the near future, as mentioned above, the program won’t end, but there are practical and symbolic implications for the program and the people it serves, including:

• The lack of reauthorization marks a significant departure from PEPFAR’s long-time bipartisan support, following its short-term reauthorization last year. PEPFAR had long enjoyed strong bipartisan support across multiple Congresses and administrations. Despite the fact that funding for PEPFAR could continue absent reauthorization, the program may be more vulnerable in future funding debates.
• Failure to reauthorize the program, alongside recent foreign aid developments, may further concern partner countries and the people served by PEPFAR. In light of uncertainty surrounding the future of the program under the Trump administration, the lack of reauthorization by Congress creates further uncertainty in the field. It could also weaken PEPFAR’s partnerships and diplomatic efforts, particularly regarding longer-term planning, financial sustainability, and country leadership of efforts.

What is next for PEPFAR reauthorization?

While it is unknown what Congress will choose to do regarding PEPFAR reauthorization, options include:

• Do nothing. This legally allows the program to continue, since Congress has appropriated funding for its operations in FY 2025.
• Extend the dates of the eight lapsed time-bound provisions, in a reauthorization bill or another legislative vehicle.
• Reauthorize the program with changes to address concerns raised by members of Congress and others related to abortion (which shaped congressional consideration over the past two years) and the need to better demonstrate sustainability and transition plans to scale-down the program over time (such as requiring progressive country co-financing or graduation requirements.

What is the outlook for PEPFAR more broadly?

More broadly, however, PEPFAR is, for the first time in its two-decade history, facing significant challenges that could impede its ability to fulfill its mission. Recent actions of the Trump administration, such as the foreign aid freeze, the proposed “realignment” of USAID’s functions into the State Department, and cancellation of many grant awards, have significantly affected PEPFAR services, operations, and health outcomes. This has included reduced spending on PEPFAR, below the funding levels appropriated by Congress, raising questions about whether the administration will spend all the funding that has been appropriated for this purpose. At the same time, a divided Congress is likely to mean heightened disagreements over funding levels more generally across the federal budget, particularly amid administration efforts to cut spending and dramatically reduce the U.S. government footprint in foreign aid, including for global health. The administration has already indicated that it may seek rescissions of prior year funding amounts, which could further affect PEPFAR activities and funding, should Congress agree to these. In addition, the President’s budget request for FY 2026 has included significant cuts to global health, although it specifies that PEPFAR funding “is preserved for any current beneficiaries.” Cuts to PEPFAR’s budget were proposed in the first Trump administration but were rejected by Congress. The current dynamic, however, is much less certain.

Most women use contraception at some point in their lives and for low-income women in particular, Medicaid provides access to family planning services which include contraceptives as well as many preventive and primary care services related to sexual and reproductive health. Congress is considering changes to Medicaid that would reduce federal spending on the program and lead to an estimated 7.6 million people losing Medicaid coverage and becoming uninsured. As the largest public payer for family planning services in the US, changes to Medicaid, including reductions in enrollment, benefits, or the type of providers that can participate in the program could have a large impact on access to contraception and other family planning care for low-income individuals. Amid debates to limit federal Medicaid support, this brief presents five facts to know about Medicaid’s role for family planning.

1. Medicaid plays an outsize role providing coverage for low-income women of reproductive age.

Medicaid, the nation’s health coverage program for poor and low-income people, provides access to health and long-term care services for millions of low-income women across the nation. Nationally, Medicaid covers one in five adult women of reproductive age (18 to 49 years old), and more than four in ten (44%) with low incomes (Figure 1). Medicaid coverage of adult reproductive age women with low incomes ranges across the country, from roughly one in five in Texas (22%) to six in ten (61%) in New York and New Mexico.

The ACA’s Medicaid expansion plays a major role in the program’s coverage of reproductive age women. Nearly four in ten (38%) adult women of reproductive age who are enrolled in Medicaid are covered through the expansion pathway. Ten states have not expanded Medicaid under the ACA.

2. All state Medicaid programs cover family planning benefits, which include contraception as well as a broad range of preventive health services.

The Medicaid program has a long history of covering family planning as part of a comprehensive set of preventive services, and the federal government pays a higher federal match rate of 90% for family planning services than it does for other health care services. Federal Medicaid law classifies family planning services and supplies as a “mandatory” benefit category that states must cover, but it does not formally define the specific services that must be included, giving states flexibility in how they design the coverage. States routinely cover prescription contraceptives and related services such as gynecologic exams and testing and treatment for sexually transmitted infections (Figure 2).

Research has found that the ACA’s Medicaid expansion is associated with an increased use of the most effective long-acting contraceptives as well as use of contraception after having a baby.

3. Medicaid coverage supports access to consistent contraceptive care which reduces unintended pregnancies and alleviates cost barriers for women with low incomes.

Federal law prohibits states from imposing out-of-pocket charges for family planning care in Medicaid, an important cost protection for women with low incomes. According to a national survey on contraceptive experiences, one in five (20%) reproductive age women who were uninsured reported that they had to stop using contraception in the past year because of the cost, compared to 5% of women covered by Medicaid.

Nationally, about half of reproductive age women with Medicaid coverage obtained family planning services in 2021, and in some states (Figure 3), it is higher (59% in Ohio and 60% in Louisiana). The family planning benefit most commonly accessed by women with Medicaid was oral contraceptives, which are also the most used reversible contraceptive among women in the general population. Medicaid also covers intrauterine devices, contraceptive implants, sterilization procedures, and injectable contraceptives along with follow up care.

4. Many Medicaid enrollees seek family planning services at specialized family planning clinics that also offer abortion services, such as Planned Parenthood.

Congress is considering a proposal to ban Planned Parenthood and other Medicaid essential community providers from participating in the Medicaid program. The federal Medicaid statute allows Medicaid enrollees to seek care from any provider that is qualified and willing to participate in the program, and for family planning services specifically, federal law allows enrollees to seek services outside of managed care provider networks if they desire. Some Medicaid providers, including many Planned Parenthood clinics, offer both family planning services and abortion care. Medicaid reimburses these clinics for the family planning services they provide but does not pay for abortion care because of the Hyde Amendment’s ban on the use of federal funds for abortions (except in the cases of rape, incest, or life endangerment). The current reconciliation bill under consideration in Congress (and passed by the House) would prohibit Planned Parenthood and some other family planning clinics that also provide abortion services from participating in the program and getting reimbursed for serving Medicaid patients. While the reconciliation bill seeks to reduce federal spending, the restriction on Medicaid payments to Planned Parenthood is a priority of Republican leaders and has been included in the reconciliation bill despite the fact that the Congressional Budget Office projects the provision would raise federal spending by $300 million.

Medicaid accounts for a major share of Planned Parenthood clinics’ financing. Excluding these clinics from Medicaid would likely result in many clinic closures and could lead to provider shortages in areas where they have a larger presence. Nationally, one in ten (11%) female Medicaid enrollees ages 15 to 49 who received family planning services went to a Planned Parenthood clinic in 2021, with larger shares in some states – as high as 29% in California (Figure 4). In some areas, there may not be other safety-net providers to absorb the patients Planned Parenthood currently serves. In other areas, existing clinics may not have the capacity to provide the same scope of care that family planning clinics, like Planned Parenthood, offer. KFF research has found that specialty reproductive health care clinics such as Planned Parenthood clinics offer a broader range of services to their patients compared to non-specialized clinics. In 2013, Texas replaced its Medicaid family planning program with a state-funded program that excluded Planned Parenthood as a participating provider. Following the change, there was a sizable drop in Medicaid claims for contraceptives and an increase in Medicaid-funded births.

5. More than half of states have established programs that use Medicaid coverage to pay for family planning services for people who are uninsured.

To help address gaps in coverage, several states extend Medicaid coverage for family planning services to people who do not qualify for full Medicaid benefits (usually because their incomes exceed the state income eligibility thresholds or they do not otherwise qualify for Medicaid). States can establish these family planning programs as a State Plan Amendment or through a Section 1115 waiver (Figure 5). States have the latitude to decide which services they cover in these limited scope family planning programs, though pharmacy coverage is restricted to family planning and related services. Nationally, 31 states provide family planning coverage to individuals who do not qualify for full Medicaid benefits. In 26 states, eligibility for the program is based solely on meeting certain income requirements, while eligibility in four states is limited to people who lose Medicaid for any reason (1 state) or lose Medicaid postpartum coverage (3 states). Most of the states (23) provide coverage to men as well as women.

Improving maternal and infant health is a national priority at the state and federal level. In the face of preventable maternal mortality, stark racial and ethnic disparities, and large gaps in the availability of maternity and reproductive health care in many communities, policymakers, clinicians, and other health care stakeholders have turned to the Medicaid program to improve the health of women and children.

As a primary payer for maternity care in the U.S., the Medicaid program is an integral component of maternal and infant health in the country. Many federal initiatives aiming to improve maternal and infant health include policies to strengthen the Medicaid program, and many state program leaders cite improving maternal and child health as a top priority. President Trump and other conservatives have called for increasing the birth rate. At the same time, Congress is considering changes to Medicaid that would reduce federal spending on the program and lead to an estimated 7.6 million people losing Medicaid coverage and becoming uninsured. This brief examines Medicaid’s pregnancy and postpartum coverage and its support for strengthening and improving maternal health outcomes.

1. Medicaid finances over four in ten births nationally and nearly half of births in rural communities.

Medicaid is the largest single payer of pregnancy-related services, financing 41% of births nationally in 2023 (Figure 1) and over half of births in four states (Louisiana, Mississippi, New Mexico, Oklahoma). The program plays a particularly large role in rural areas, paying for nearly half (47%) of all births in rural communities and helping to shore up financing for hospitals in rural areas suffering from provider shortages. Rural counties in states with more expansive Medicaid eligibility criteria for pregnancy coverage are more likely to have hospitals that provide obstetric services than rural counties in states with more restrictive program eligibility thresholds. Recognizing the importance of assuring that pregnant people have access to care, federal Medicaid law also explicitly prohibits out-of-pocket charges for any pregnancy-related care, an important protection for pregnant people covered by the program, as out-of-pocket health expenses for maternity care can reach thousands of dollars.

2. All states have chosen to extend Medicaid eligibility to pregnant people beyond the federal minimum requirements.

By federal law, the minimum Medicaid eligibility level for pregnant women is 138% of the federal poverty level (FPL), which is $36,770 for a family of three. Many states also use the federal Children’s Health Insurance Program (CHIP) program to extend eligibility to pregnant women at higher income levels. However, nearly all states, across partisan divides, have used their flexibility to set Medicaid income eligibility criteria for pregnancy above the minimum requirement so that more pregnant people can qualify for coverage. As a result, the median eligibility limit (Figure 2) for pregnancy coverage in Medicaid and CHIP is well above the minimum requirement in states that voted for President Trump (205% FPL) and states that voted for former Vice President Harris (217% FPL).

Many states chose to broaden eligibility for pregnant people during the 1980s, in part responding to high rates of infant mortality, particularly in southern states. Recognizing the importance of prenatal care for both maternal and infant health outcomes, states embraced the opportunity to cover pregnant people and get them into care as early as possible.

3. States use Medicaid to strengthen and improve maternal health care quality and outcomes.

Amid a national crisis in maternal health, characterized by high rates of maternal mortality and morbidity, regional shortages in maternity clinicians, closures of maternity wards in rural and urban communities, and ongoing concerns about reproductive care access, several states are leveraging their Medicaid programs to improve the quality of maternity care and maternal health outcomes. These efforts include increased investment in outreach and education to enrollees and providers about maternal health issues; expanded coverage for benefits such as doula care, home visits, and substance use disorder and mental health treatment; and use of new payment, delivery, and performance measurement approaches. For example, South Dakota has created a pregnancy care management program that offers enhanced reimbursement to providers for care coordination and meeting prenatal and postpartum care program objectives.

KFF research has found that most states cover a broad range of maternity care services, including prenatal screenings, folic acid supplements, labor and delivery, and breastfeeding supports (Figure 3). In addition, a growing number of states have expanded benefits beyond traditional maternity services in recent years, such as for doula services and home visiting programs, to promote better maternal and infant health outcomes and reduce racial/ethnic health disparities. Some states are focusing on other support services. For example, Nebraska, Tennessee, and New Jersey are piloting programs that provide nutrition counseling and medically indicated meals for pregnant/postpartum individuals. In the face of federal funding cuts, these program enhancements may be difficult or impossible for states to continue to support.

4. Medicaid expansion broadens access to Medicaid coverage before pregnancy, providing an important pathway to primary and preventive care that has been demonstrated to improve pregnancy outcomes.

Decades of research has found that pre-pregnancy health is a key determinant of both maternal and infant outcomes. Coverage prior to pregnancy provides access to important primary and preventive care as well as the opportunity to assess and manage chronic diseases that affect pregnancy, including hypertension, obesity, and diabetes. KFF research finds that Medicaid expansion covers 38% of women ages 19-49 enrolled in the program. Women in Medicaid expansion states are more than twice as likely (Figure 4) to be enrolled in the program prior to becoming pregnant compared to women in non-expansion states (59% vs. 26%). Conversely, most women in non-expansion states obtained Medicaid coverage only after becoming pregnant, with about one-third (34%) enrolling after the first trimester. As a result, Medicaid expansion is associated with increased use of prenatal services as well as lower rates of adverse birth outcomes such as low birthweight newborns. Federal law stipulates that children born to women covered by Medicaid are automatically eligible and enrolled in the program for the first year of their life.

5. Individuals who qualify for Medicaid during pregnancy face an income eligibility cliff one year after giving birth, but the cliff is not as steep in expansion states.

Until recently, Medicaid pregnancy coverage ended at 60 days postpartum. This changed with a provision in the American Rescue Plan Act (ARPA) of 2021 that gave states a new option to extend postpartum coverage to 12 months. Today, all but two states (Arkansas and Wisconsin) have adopted this optional eligibility extension, which means that birthing parents can stay covered for a year.

Medicaid eligibility levels for parents are much more restrictive than those related to pregnancy, which means that in all states some new parents no longer qualify for Medicaid after the postpartum period, but there is a divide in access to coverage between expansion and non-expansion states. In states that have adopted the Medicaid expansion, new parents with income below 138% FPL can retain Medicaid eligibility and those with income above that level are generally eligible for subsidized coverage in the Marketplace. In contrast, in states that have not adopted Medicaid expansion, more low-income parents are at risk of becoming uninsured just as their children enter the toddler years because adults with incomes below the poverty level do not qualify for subsidies in the Marketplace and because of the extremely low Medicaid eligibility levels for parents (Figure 5). For example, in Texas, parents in a family of three only qualify for continued Medicaid coverage after the postpartum period if they make less than $3,900 a year (15% FPL). Across all non-expansion states, median eligibility for parents is 33% FPL, which is approximately $8,800 annually for a family of three.

Medicaid expansion offers continuous coverage following the postpartum period for many parents and promotes access to care for many parents’ ongoing health needs, including conditions that may have been identified during pregnancy but require ongoing care and treatment. This includes many chronic diseases that are leading causes of adverse maternal health outcomes, such as hypertension and other cardiovascular conditions as well as depression and other mental health conditions. KFF research shows that women in Medicaid expansion states are able to retain coverage for longer periods after a delivery. The program’s coverage of contraception and family planning can help people prevent, plan, and space subsequent pregnancies for optimal outcomes.

Key Facts

• The Ryan White HIV/AIDS Program, first enacted in 1990, is the largest federal programdesigned specifically for people with HIV, serving over half of all those diagnosed. It is a discretionary grant program dependent on annual appropriations from Congress.
• It is the nation’s safety net program for people with HIV, providing outpatient HIV care, treatment, and support services to those without health insurance and filling in gaps in coverage and assisting with costs for those with insurance limitations.
• Most Ryan White clients are low-income, male, people of color, and half are gay and bisexual men and other men who have sex with men.
• The program is the third largest sourceof federal funding for HIV care in the U.S., following Medicare and Medicaid and is the largest source of HIV discretionary funding. Funding is distributed to states/territories, cities, and HIV organizations in the form of grants. In FY 2024, the Ryan White HIV/AIDS Program was funded at $2.6 billion, which includes continued funding for the federal “Ending the HIV Epidemic” (EHE) initiative, created by President Trump during his first term.
• While the Ryan White Program has a long history of bipartisanship, the Trump administration has indicated that it will seek to eliminate the EHE, including its funding, end one part of the Ryan White program, and move the remainder of Ryan White into a new HHS agency as part of a larger departmental reorganization.

Overview

The Ryan White HIV/AIDS Program (Ryan White), the largest federal program designed specifically for people with HIV in the United States, serves over half of people in the U.S. diagnosed with HIV. First enacted in 1990, Ryan White has played an increasingly significant role as the number of people living with HIV has grown over time and people with HIV are living longer. It provides outpatient care and support services to individuals and families affected by HIV, functioning as the “payer of last resort,” by filling in the gaps for those who have no other source of coverage or face coverage limits or cost barriers. Multiple “parts” of the program (described below) can purchase health insurance on behalf of clients, which is often less expensive than paying for drugs alone and offers broader health coverage (which is different from when the program pays directly for medical costs as those must relate specifically to HIV).

The program has been reauthorized by Congress four times since it was first created (1996, 2000, 2006, and 2009) and each reauthorization has made adjustments to the program. The current authorization lapsed in FY 2013, but the program has continued to be funded through the annual appropriations process as there is no “sunset” provision or end date attached to the legislation. The program is currently administered by the HIV/AIDS Bureau (HAB) at the Health Resources and Services Administration (HRSA) of the Department for Health and Human Services (HHS), which provides funding to state, local, and community-based grantees to provide HIV services across the country.

The Ryan White Program has been a central component of the federal government’s Ending the HIV Epidemic (EHE) initiative, launched in 2019 under the first Trump Administration. New EHE funding has allowed the program to serve new people and brought others who had fallen out of care, back in. However, questions have been raised about whether the Trump administration will support the EHE going forward.

Clients

More than half a million Ryan White clients received at least one medical, health, or related support service through the program in 2022, with many receiving multiple types of services:

• More than half (59%) had incomes at or below the federal poverty level (FPL) (which in 2022 was $13,590 for a single person or $27,750 for a family of four); 28% had incomes between 101% and 250% FPL.
• Nearly one-fifth (18%) were uninsured, a decrease from 28% in 2013, prior to major coverage expansions under the Affordable Care Act (ACA). Most clients (82%) have some form of insurance coverage: Medicaid is the primary payer for Ryan White clients, covering 39%, including those dually eligible for Medicare. Other coverage includes: private insurance (20%), Medicare only (10%), and other or multiple sources of insurance (12%).
• Clients are largely male (72%); 25% are female and 3% are transgender. Approximately half (46%) are between the ages 45 and 64, up from 22% in 2016. More than one-third (39%) are between 25-44. Smaller shares are under 25 (4%) or over 64 (12%). Differing from the U.S. population overall, most clients are people of color (72%), including 45% who are Black and 25% who are Hispanic. Just over one-quarter of clients (25%) are White. Half (52%) are gay and bisexual men, or men who have sex with men.

Structure & Funding

The Ryan White Program is the third largest source of federal funding for HIV care in the U.S., after Medicare and Medicaid. In FY24 funding for the program totaled $2.6 billion in FY 2024. Federal funding for the program, which is appropriated by Congress annually, began in FY1991 and increased significantly in the mid-1990s, primarily after the introduction of highly active antiretroviral therapy (HAART). For many years thereafter, funding continued to increase, first slowing down and then, eventually, flattening out. This trend began to shift modestly when new funding as part of the EHE Initiative marked the first significant increase to the program in many years. Since then, funding for EHE has risen substantially, increasing to $165 million in FY 2024. (See Figures 2 and 3)

However, funding for the Ryan White Program overall has not kept pace with inflation and does not necessarily meet the needs of a rising number of clients. (See Figure 3).

The Ryan White HIV/AIDS Program is composed of “Parts,” each with a different purpose and funded as a separate line item through annual Congressional appropriations. Funding is provided to states and territories (Part B) cities (Part A), and to providers, community-based organizations (CBOs), and other institutions (Parts C, D, and F), in the form of grants (described in detail in Table 1). In recognition of the varying nature of the HIV epidemic, grantees are given broad discretion to design key aspects of their programs, such as specifying client eligibility levels and service priorities. However, there are requirements, including that, unless granted a waiver, grantees must spend 75% or more of funds on “core medical services” under Parts A through C and that all state AIDS Drug Assistance Programs (ADAPs) must have a minimum formulary for medications

Ryan White HIV/AIDS Program & Care Outcomes

While many clients have gained coverage under the ACA, Ryan White continues to play a critical role as a safety net provider for those who remain uninsured or underinsured, helping to fill the gaps for clients with insurance, including assisting with insurance affordability and access to support services. Notably, Ryan White clients are significantly more likely to have sustained viral suppression compared to those without program support (68% v. 58%) and this pattern was observed across all coverage types. Viral suppression affords optimal health outcomes at the individual level and, because when an individual is virally suppressed they cannot transmit HIV, a significant public health benefit.

Key Issues

First enacted as an emergency measure, the Ryan White Program has grown to become a central component of HIV care in the U.S., playing a critical role in the lives of many low and moderate-income people with HIV. Looking ahead, there are several key issues facing the program that will be important to monitor, including:

• Future funding. As a federal grant program, funding is dependent on annual appropriations by Congress, and funding levels do not necessarily correspond to actual need (i.e. the number of people seeking services or the costs of services) and, as noted above, the program’s funding has not kept pace with inflation. As a result, not all states and communities have been able to meet the needs of people in their jurisdictions. Additionally, the Trump administration has proposed eliminating Part F of the program in its preliminary budget released in May 2025, and, in an earlier leaked budget document, proposed to eliminate the EHE. It has yet to be seen whether Congress will continue to appropriate funding to Part F or EHE and at what level.
• Structural changes and commitment to HIV. The Trump administration has also been actively scaling back the nation’s HIV response through staffing and funding cuts which have impacted HHS significantly, including HRSA/HAB. These changes could make program management, grant delivery, and data collection/analysis more challenging. This administration also plans to move HRSA to a new agency, the Administration for a Healthy America, but it is unclear how this will work and what impact it will have on the program.
• Major changes to the health policy landscape. The Trump administration and Congress are implementing or exploring significant, broader health policy changes that could impact the Ryan White Program. These include efforts to restrict access to gender affirming care, including in the Ryan White Program, as well as proposals to substantially change the Medicaid program which could lead to large coverage losses for individuals and/or cost-shifting to states and the Ryan White.

The substantial Medicaid savings in the reconciliation bill that has been passed by the House could have major implications for nearly 15,000 federally certified nursing facilities and the 1.2 million people living in them. Nursing facilities provide medical and personal care services for older adults and people with disabilities, and Medicaid covered 44% of long-term institutional care costs in 2023. In response to cuts in federal Medicaid spending, states could opt to lower Medicaid reimbursement rates for nursing facilities, which could result in reductions in staffing that are tied to lower nursing facility quality and poorer outcomes. A separate Medicaid provision would tighten eligibility by reducing the home equity limit overtime, making it more difficult for people to qualify for nursing facility, home care and other long-term care services.

The proposed legislation would also put a moratorium on implementing a Biden-era rule intended to help address long-standing concerns about staffing shortages and the quality of care in nursing homes. The Congressional Budget Office (CBO) estimates that eliminating the rule would save $23.1 billion over 10 years. Even if the legislation does not pass, a recent court decision overturned the first-ever minimum staffing ratios for nursing facilities that were part of the rule. The Trump administration is considered unlikely to appeal the court’s decision. Amid debates to limit federal Medicaid support, this brief provides information on how Medicaid programs support nursing facilities and the people living in them.

1. Medicaid is the primary payer for over 6 in 10 residents in nursing facilities.

As of July 2024, there were 1.2 million people living in nursing facilities, over 60% of whom had Medicaid as a primary payer. The share of people living in nursing facilities with Medicaid as their primary payer has remained steady, but the total number of residents living in nursing facilities decreased by 10% over the last decade. The decline in the total number of nursing home residents over the past decade may in part reflect a preference for home-based care, including care in assisted and independent living facilities, rather than in nursing facilities.

Medicaid is the primary payer for nursing facility care, providing long-term care services not offered by Medicare. Medicare covers up to 100 days of skilled nursing facility care following a qualifying hospital stay and does not cover long-term nursing facility care, custodial nursing facility care, or nursing facility care that does not follow a qualifying hospital stay. Despite Medicaid’s primary role in funding nursing facility services, KFF polling shows that four in ten people identify Medicare as the main source of coverage for low-income people in nursing facilities.

2. Medicaid paid for 44% of the $147 billion that the US spent on institutional long-term care in 2023.

Medicaid is the primary payer for long-term care (LTC) in the US, paying for at least 44% of institutional LTC and 69% of home care. Unlike Figure 1, which reflects the number of people using any nursing facility care, including short-term skilled care paid for by Medicare and other post-acute care payers, Figure 2 reflects spending on long-term institutional care only and excludes short term skilled care paid for by Medicare and other payers. The institutional care services in Figure 2 include costs for long-term nursing facility stays, intermediate care facilities, and continuing care retirement communities. The costs attributable to each type of facility are unknown because the National Health Expenditures data do not break these costs out separately. There are fewer nursing facility residents and nursing facilities than there were a decade ago, and more people use home care now than nursing facility care, leading to the higher U.S. spending on home care.

3. Medicaid enrollees who use institutional long-term care are more likely to be 65+, White, and enrolled in Medicare when compared to those using home care.

In 2021, there were 1.4 million people who used Medicaid institutional LTC throughout the year. This includes about 1.3 million people who used Medicaid nursing facility care and 0.1 million people who used care in an intermediate care facility. Figure 1 reports fewer people using nursing facility care since it captures the number of people in a nursing facility in a given month while Figure 3 reflects nursing facility use over the course of the year. Most Medicaid enrollees who use institutional LTC are ages 65 and older while most who use home care are under 65. Most Medicaid enrollees using institutional LTC are dually enrolled in Medicare, compared to just over half of those using home care. People who use institutional LTC are also more likely to be White than those using home care.

4. Medicaid financing for nursing facilities is complex.

There are four main sources of Medicaid funding for nursing facilities including:

• Payments from the state to nursing facilities that are tied to specific patient care (known as fee-for-service or FFS base payments),
• Payments from a private health plan to nursing facilities that are tied to specific patient care in cases where the state is paying private health plans to provide Medicaid benefits (known as managed care payments),
• Payments from nursing facility residents (which represent patient cost sharing), and
• Supplemental payments from states to nursing facilities that are not tied to specific patients.

According to the Medicaid and CHIP Payment and Access Commission, fee-for-service payments are the largest source of Medicaid spending (57%) followed by managed care payments (29%). Residents paid 9% of the total, and the remaining 5% came from supplemental payments to providers.

Under current law, states are permitted to finance the non-federal share of Medicaid spending through multiple sources including healthcare-related taxes or “provider taxes”, though legislation that has been passed by the House would prohibit states from establishing any new provider taxes or increasing the rates of existing taxes. CBO estimates that the moratorium would save $89.3 billion over 10 years. Provider taxes are defined as state taxes where at least 85% of the tax burden falls on health care items or services or entities that provide or pay for health care. All but six states finance part of the state share of nursing facility spending with provider taxes on nursing facilities, and the moratorium or new or addition taxes could limit states’ options to fund their share of nursing facility costs in the future, potentially resulting in reduced Medicaid spending, coverage, and payment rates to nursing facilities. States may also finance the state share of payments with intergovernmental transfers or certified public expenditures for the 6% of nursing facilities that are publicly owned (although this varies across the states from less than 1% in the District of Columbia and Connecticut to 43% in Wyoming).

5. Substantial cuts to Medicaid could undermine efforts to increase nursing facility staffing levels.

Research finds that higher staffing levels in nursing facilities have been consistently tied to better outcomes for residents and are closely tied to overall quality of care. States are currently leveraging Medicaid to support nursing facility staffing efforts through higher payment rates, but those payment rates may be unsustainable if Medicaid spending is significantly cut. In a 2024 survey of state Medicaid programs, most states (45 of 49 reporting states) reported increasing nursing facility FFS base rates in both FY 2024 and FY 2025 in response to staffing shortages. Several states reported particularly significant nursing facility base rate increases, including Iowa with a 25.49% base rate increase and Ohio with a 17% increase.

Beyond increasing payment rates, states are making efforts to bolster nursing facility staffing by leveraging Medicaid to strengthen the nursing facility direct care workforce. These strategies include increases to minimum wage that would apply to workers in nursing facilities (eight states), strengthening direct care worker benefits (five states), and requiring nursing facilities to pass reimbursement increases through to the workforce (six states). Other strategies adopted by state Medicaid programs include efforts to promote and subsidize health care careers, increased payments to nursing facilities for maintaining higher levels of staffing, and incentive payments for demonstrating that a certain share of a nursing facility’s total revenue was spent on workforce compensation and benefits.

These chart collections provide key data about deductibles and other cost-sharing requirements included in plans sold through the Affordable Care Act (ACA) health insurance marketplaces. Marketplace plans, like most other private health coverage, require enrollees to pay a portion of the cost when they access health services. Cost-sharing can include deductibles, copayments, and coinsurance, though the deductible is a simple and visible measure of how much an enrollee may be expected to pay for major health services. The deductible is the amount an enrollee must pay toward the cost of in-network covered services before the plan will start paying for most types of care. Some plans have a separate deductible amount for medical care and prescription drugs. Under the Affordable Care Act, private plans are required to pay the full cost of certain in-network preventive services (even before the enrollee has met the deductible amount). Marketplace plans are categorized into “metal levels” based on deductible and other cost-sharing amounts.

Cost-Sharing for Plans Offered in the Federal Marketplace, 2025 (.ppt)

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Legislation passed by the House of Representatives on May 22^nd includes a number of Medicaid provisions that would cut federal Medicaid spending by more than $700 billion over the next ten years and notably increase the number of people without health insurance. Provisions that would only apply to states that have adopted the ACA expansion account for more than half of all of the savings estimated by CBO. Some critics of Medicaid expansion have argued that expansion diverts resources away from other groups of Medicaid enrollees, including people with disabilities and children, and that expansion enrollees are “able-bodied” implying they have minimal health care needs. However, data show that expansion states spend more per enrollee overall and on each eligibility group than non-expansion states and that nearly half of expansion enrollees have a chronic condition. This data note builds on a previous analysis about Medicaid expansion enrollees to understand more about their health care utilization patterns compared to other enrollees. Specifically, this data note analyzes 2021 Medicaid claims data to compare utilization of health care services among Medicaid expansion enrollees with other Medicaid enrollees in expansion states and to compare utilization of health care services among adult Medicaid enrollees living in expansion and non-expansion states.

In expansion states, adults covered through the ACA expansion use more services than other adults who are eligible on the basis of having low-income (Figure 1). While some groups claim that expansion adults are primarily “able-bodied” adults with minimal health needs, analysis of 2021 Medicaid claims data finds that expansion adults were more likely to use prescription drugs (62% vs. 55%) and behavioral health treatment (30% vs 23%) compared to other adults. High utilization of these services by expansion adults likely reflects that one-third have a chronic physical health condition and a quarter have a chronic behavioral health condition. However, their utilization rates were lower than rates among adults who qualified on the basis of having a disability.

Medicaid enrollees in expansion states are more likely to use health care services than similar enrollees in non-expansion states (Figure 2). Though some groups suggest that Medicaid expansion takes resources away from traditional Medicaid enrollees, analysis of 2021 Medicaid claims finds that rates of health care utilization among adults in expansion states is higher than utilization among adults in non-expansion states. About 90% of adults eligible for Medicaid on the basis of disability in expansion states used any health care services, compared with just 77% of adults eligible on the basis of disability in non-expansion states. Similarly, excluding adults who qualified through the expansion pathway, 75% of other adults in expansion states (those who qualified for Medicaid on the basis of low-income) used health care services, while just 66% of their counterparts in non-expansion states had any utilization. Notably, expansion adults had similar utilization rates as adults eligible on the basis of disability in non-expansion states.

A state’s expansion status is not the sole reason for the variation in utilization rates. Rather, there are a variety of factors that may contribute to this variation, including substantial differences in state adoption of optional long-term care and behavioral health care programs; provider participation in such programs; and variation in the duration and scope of covered benefits as well as cost sharing requirements.

These differences in utilization persist for specific services for low-income adults and people with disabilities (Figure 3). Adults eligible on the basis of low-income (excluding those eligible through the ACA expansion) in expansion states had notably higher utilization of certain services than those in non-expansion states, including outpatient care (64% vs 58%) and prescription drugs (55% vs 47%).

Similarly, among adults eligible on the basis of disability, utilization of certain services needed to manage their conditions is higher in expansion states than in non-expansion states. In expansion states, 81% of adults with disabilities had any claims for prescription drugs compared to just 63% of those in non-expansion states. These enrollees in expansion states were also over twice as likely to use long-term care (25% vs 12%) and had higher utilization of behavioral health treatment services (62% vs 44%) as those in non-expansion states.

When controlling for health status, enrollees in expansion states still had higher rates of utilization than those in non-expansion states (Figure 3). Enrollees who qualified on the basis of disability and who had three or more diagnosed chronic conditions had the highest utilization rates of prescription drugs, long-term care, and behavioral health treatment in both expansion and non-expansion states, compared to all other adult enrollees. However, within this group of adults with particularly high health care needs, those in expansion states had higher utilization than those in non-expansion states for prescription drugs (98% vs. 93%), long-term care (33% vs. 23%), and behavioral health treatment (84% vs. 78%). (The measure of overall utilization for those with chronic conditions is not reported since enrollees have to have at least one health care claim to have a chronic condition diagnosis.)