Over one-third of Medicaid spending pays for long-term care, with most of the spending paying for home care—also known as “home- and community-based services” or HCBS. Medicaid pays for almost 70% of all home care spending in the U.S., nearly all of which is provided through optional services. Among those optional services, states rely heavily on Medicaid “waivers” to provide home care, which allow them to manage costs using mechanisms such as capping spending or enrollment in the waiver (Box 1). States may also use waiting lists to track and manage people who want to receive but are not yet receiving home care. While waiting lists may result from caps on waiver spending or enrollment, states also used them for other administrative reasons (Box 2).

Medicaid’s significant spending on home care and the availability of mechanisms for limiting such spending could spur states to cut home care spending in response to the 2025 reconciliation law. Cutting spending on home care could result in either fewer people receiving any benefits or people receiving fewer covered services, even though the need for home care is unlikely to fall in future years. The recently passed reconciliation law is estimated to reduce federal Medicaid spending by $911 billion between 2025 and 2034, roughly a 14% reduction in federal funding for the program. During the last major reduction in federal Medicaid spending, all states reduced spending on home care by serving fewer people (40 states) or by cutting benefits or payment rates for long-term care providers (47 states).

Using data from the 23^rd KFF survey of officials administering Medicaid home care programs, this issue brief describes the mechanisms states are currently using to limit Medicaid spending on home care and their plans for adopting new mechanisms in state fiscal year (FY) 2026. The survey was sent to all home care programs in all 50 states and the District of Columbia (hereafter referred to as a state), which states completed between April and July 2025. All states except Florida completed the survey, although response rates for specific questions may have been lower. States generally completed the survey prior to enactment of the reconciliation law, so changes to limit spending in FY 2026 are not attributable to the new law. Survey findings are reported by state and waiver target population, although states often offer multiple waivers for a given target population. Key takeaways include:

• For most home care services, which are delivered through waiver programs, 44 out of the 50 responding states constrain spending through limits on either total enrollment (37 states) or on total spending (15 states, Figure 1). Most states (37) also cap waiver spending per participant for at least one waiver.
• Most states (44) reported using mechanisms in at least one waiver to restrain spending that applies to specific services, such as limiting the amount of spending for services per participant (38 states) or limiting the quantity of personal care enrollees may receive (34 states).
• Nearly a third of responding states (15) reported planning to adopt new strategies in FY 2026 to contain home care costs. Since most survey responses were collected before enactment of the reconciliation bill, it is not yet known how this number will change as states prepare for the forthcoming cuts to federal Medicaid spending.
• Fewer mechanisms are available to states in managing spending for home care services provided outside of waivers, but nearly all states use prior authorization as a tool to manage that type of spending.

Mechanisms for Limiting Waiver Home Care Spending and Enrollment

Most states (37) manage Medicaid spending on home care by capping either total enrollment, or both total spending and enrollment (Figure 1). Most states also cap per person spending for home care waiver services. The two primary types of waivers states use to offer Medicaid home care are 1915(c) and 1115. The two waivers differ in that 1915(c) waivers are specifically used to provide Medicaid home care to people who require an institutional level of care whereas 1115 waivers can test all types of new Medicaid approaches (Box 1). Among the 50 responding states that provide home care through waivers, 15 states have caps on total waiver spending, 37 have caps on the total number of participants, and 37 have caps on spending per person (Appendix Table 1).

Use of caps on total spending, participation, or costs per participant were reported in 44 states (Figure 2). Among the 50 responding states with waivers, 44 had caps of some sort, including 15 with caps on total spending, 37 with caps on total participants and 37 with caps on spending per participant. For both 1915(c) and 1115 waivers, states are required to meet cost neutrality requirements to demonstrate that the costs per enrollee in waiver services do not exceed the per enrollee costs of institutional care (Box 1). States may meet this requirement by showing that average costs per enrollee are below the average costs of institutional care or they may establish cost limits for all participants enrolled in the waiver. States that adopt such individual cost limits [see Instructions, Technical Guide and Review Criteria V3.7] must specify the safeguards in place to address people’s needs after they have reached the individual cost limit.

Use of caps is similar for waivers that serve different target populations. Among waivers for people with intellectual or developmental disabilities (47 states) or people who are ages 65 and older or have physical disabilities (45 states), the number of states with caps on total spending (8 and 6 respectively), participation (27 and 28), and spending per participant (26 and 22) are similar. Similar trends also apply for waivers that are available in a smaller number of states (Appendix Table 2).

Less than a quarter of states (11) reported planning to adopt new mechanisms to limit waiver enrollment or spending in state FY 2026. Among states that are planning to adopt new mechanisms, caps on the number of waiver participants are most common (8 states) with few states planning to newly cap spending per waiver participant (4) or total waiver spending (1). Only two states, Maryland and Oregon, reported planning to adopt more than one mechanism (Appendix Table 4).

Mechanisms for Limiting the Costs of Specific Waiver Home Care Services

Most states (44) use at least one mechanism to constrain the costs of specific home care services per participant in their waivers (Figure 3). Among states with service-specific limits, caps on spending for specific services (38 states) are more common than volume-based limits such as maximum hours of personal care or number of visits (used by 34 states).

States are more likely to use spending caps for waivers that serve people with intellectual and developmental disabilities but are more likely to use volume-based limits for waivers that serve older adults and people with physical disabilities. Of the 47 states offering 1915(c) waivers serving people with intellectual and developmental disabilities, close to two-thirds of states (31) cap spending for waiver services per participant and nearly a third limit personal care hours or visits per person (15 states). For the 45 states with waivers serving people who are ages 65 and older or have physical disabilities, limits on the quantity of personal care are more common (24 states) than caps on spending for waiver services per participant (19 states). The number of states with these service caps varies for less common waivers. The maximum number of hours or visits of personal care vary by state and over a third of states determine limits through a functional assessment (19 states).

States reported capping spending on a range of different waiver services, including home and vehicle accessibility modifications and adaptive equipment and assistive technology. Home and vehicle accessibility modification limits, such as ramps and wheelchair van lifts, vary across states; Delaware and Nebraska have waivers serving people with intellectual and developmental disabilities that cap adaptations to $10,000 per participant every five years while Massachusetts waivers for the same population limit home modifications to $50,000 and vehicle modifications to $25,000 per participant in a five-year period. Some states, like Illinois, group all equipment, technology, and modifications into a combined category for spending limitations, but other states have separate caps. For example, Louisiana’s waiver serving people with intellectual and developmental disabilities caps spending on specialized medical equipment at $2,500 per year and Michigan’s waiver for people who are ages 65 and older or have physical disabilities caps spending on assistive technology at $5,000 per year.

For FY 2026, 12 states reported planning to adopt new waiver service limits to constrain costs. New caps on spending for specific types of waiver services per participant (8 states) are more common than limits on the quantity of personal care (5 states). Connecticut is the only state that reported planning to adopt both mechanisms (Appendix Table 4).

Use of Prior Authorization to Manage Spending on State Plan Home Care

For Medicaid home care that is provided through the state plan, states cannot use waiver-specific mechanisms for constraining costs but do generally use prior authorization. State Medicaid agencies often require enrollees to obtain approval of certain health care services or medications before the care is provided—an insurance practice commonly referred to as “prior authorization.” In Medicaid, prior authorization is used for both mandatory services, such as home health, and optional services, such as personal care, and is widely used by Medicaid managed care organizations. If the requested service is deemed not appropriate or medically necessary, the request may be denied (fully or partially), but enrollees may be able to appeal the decision through certain appeals and exemption procedures. However, the appeals process can be difficult to navigate, and individuals may be denied access to needed care while waiting for a decision. In a KFF survey conducted in July 2025, 79% of Medicaid enrollees under age 65 and 67% of those ages 65 and older found delays and denials of health care services by health insurance companies to be a major problem.

Nearly all states (47) reported using prior authorization to constrain costs on either personal care or home health services (Figure 4). Among those states, over half (26) use prior authorization for all home care services, while the remaining states (21) have this policy in place for only some services. Home health is a mandatory benefit for all states, and 40 states use prior authorization for home health. Personal care is an optional benefit offered by 33 states, and nearly all (29) use prior authorization for personal care. Common services that require prior authorization include personal care, private duty nursing, specialized equipment and technology, and home and vehicle modifications. Prior authorization is also used for home care service requests above certain thresholds (e.g. more than 40 hours per week of personal care).

States reported that prior authorization for Medicaid home care services may be conducted by various entities, including Medicaid agencies, other state entities, managed care organizations, or case managers. Across state plan services, the most common entities responsible for approving or denying services are managed care organizations (12 states), utilization management vendors (7 states), state Medicaid agencies (6 states), or other state agencies (6 states). The same entities are typically responsible for conducting prior authorization for waiver services.

States may also use prior authorization for waiver services, but it may be part of person-centered service planning requirements that apply to all 1915(c) waivers [see Instructions, Technical Guide and Review Criteria V3.7]. All services provided through a 1915(c) waiver must be specified in advance through a written service plan, also known as a plan of care. The plan is intended to provide a complete picture of how enrollees’ needs are met. The plan documents which specific waiver services will be provided to participants, including the amount, duration, and frequency of each service, and the types of providers that may furnish each service.

KFF asked states about whether they required cost sharing for home care and found that few do. Only 3 states reported requiring cost sharing for personal care offered through waivers (Georgia, Illinois, and Rhode Island) and 3 states reported requiring copayments for other waiver services (Minnesota, Oklahoma, and Rhode Island). Additionally, 3 states (Georgia, Idaho, and Maine) reported requiring copayments for home health services. No states reported adopting new copayments for state FY 2026. Starting October 1, 2028, the reconciliation law requires states to impose cost sharing of up to $35 per service on adults eligible for Medicaid through the Affordable Care Act Medicaid expansion with incomes 100-135% FPL. Nearly 400,000 Medicaid enrollees who use long-term care are eligible on account of the Medicaid expansion, and that group will be required to pay cost sharing under this requirement. It is unknown whether states will choose to apply the cost sharing requirements for home care more broadly—either on account of administrative efficiencies or as a mechanism to reduce state spending on home care in response to the historic reduction in federal Medicaid funding from the reconciliation law.

Medicare Advantage, the private plan alternative to traditional Medicare, covers over half of eligible Medicare beneficiaries. Initially, one of the goals of having Medicare contract with private plans was to generate savings for the Medicare program by introducing competition between private plans. However, private plans have never generated savings for Medicare, in part because the way Medicare pays private insurers has never sufficiently accounted for the differences in health status between beneficiaries in traditional Medicare and those enrolled in Medicare Advantage plans. In addition, the payment system was designed to attract insurers to the Medicare Advantage market, providing payments sufficient to maintain profitability as well as to fund supplemental benefits, which are valued by enrollees. This has limited the amount of savings realized by the federal government when private plans achieve efficiencies and have lower costs than traditional Medicare.

The Medicare Payment Advisory Commission (MedPAC) estimates that, in 2025, payments from the federal government to Medicare Advantage plans exceed what spending would have been in traditional Medicare by 20%, which translates into $84 billion in additional spending. Higher payments to Medicare Advantage plans increase total Medicare spending, strain the Part A Hospital Insurance trust fund and drive-up Part B premiums for all Medicare beneficiaries. This raises questions about whether the current payment system provides strong financial returns to insurers at the expense of the federal budget, Medicare beneficiaries themselves, and U.S. taxpayers, while also providing popular supplemental benefits such as dental and vision for Medicare Advantage enrollees. It also raises questions about whether the current payment system results in an inequitable distribution of supplemental benefits, in that it finances these additional benefits for Medicare Advantage enrollees but not traditional Medicare beneficiaries.

According to press reports, some Senators briefly considered including changes to how the federal government adjusts payments to Medicare Advantage plans based on the health status of their enrollees as part of the reconciliation legislation enacted into law on July 4, 2025. Some reportedly raised the possibility of including the No UPCODE Act, a bipartisan bill that includes a subset of payment reforms recommended by MedPAC. While these changes were ultimately not included in the reconciliation bill, there appears to be ongoing interest in refining the current methodology for setting payments to plans, given the impact of the current payment system on Medicare spending and the federal budget.

This brief explains how Medicare Advantage payments are determined, including a description of the parameters that are set in law and those that can be modified by the executive branch through its regulatory authority. It also provides an overview of policy options to change the Medicare Advantage payment system and includes a glossary of terms (italicized and bolded in text) related to Medicare Advantage payment policy.

Medicare Advantage payments are determined through an annual process.

Private plans have a long history in the Medicare program, and the details of how they are paid have changed over time to address evolving policy goals, largely as part of major pieces of legislation, including the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), the Balanced Budget Act of 1997, the Medicare Modernization Act of 2003, and the Affordable Care Act of 2010 (ACA).

Medicare Advantage plans receive a monthly payment per enrollee from the federal government to provide Medicare-covered services. In most cases, the funds received from the federal government are sufficient for plans to also cover supplemental benefits, such as vision, hearing, and dental services, to reduce cost sharing compared to what is required under traditional Medicare without a supplement, and to buy-down the Part D premium for plans that offer prescription drug coverage. Congress established the framework for the Medicare Advantage payment system giving the Secretary of the Department of Health and Human Services (HHS) authority in how it is implemented. In each step of the annual payment process described below, some components are set in statute (many of which were substantially revised by the ACA), while the Secretary of HHS is directed to define others, which is implemented by the Centers for Medicare & Medicaid Services (CMS), the federal agency that oversees and administers the Medicare program.  

Benchmarks are the maximum amount the federal government will pay Medicare Advantage plans.

The maximum amount the federal government will pay private insurers in a county for an average beneficiary who enrolls in a plan is called the benchmark. This amount is a percentage of what the federal government spends on beneficiaries in traditional Medicare in the county. The law stipulates that all counties nationwide are to be divided into quartiles based on traditional Medicare spending and sets the benchmark as a specific percentage. The maximum amount the federal government will pay private plans is less than traditional Medicare in one-quarter of counties and is equal to or more than traditional Medicare in the other three-quarters of counties.

Specifically, counties in the first quartile with the highest spending (such as Miami-Dade County, Florida) have a benchmark set at 95% of traditional Medicare spending. Counties in the second and third quartiles have benchmarks set at 100% and 107.5% of traditional Medicare spending, respectively. And counties in the fourth quartile with the lowest spending (such as Hennepin County (Minneapolis), Minnesota) have a benchmark of 115% of traditional Medicare spending.

The law also states that benchmarks are to be increased by a specific amount for plans that receive at least a 4-star rating under the quality bonus program. In most counties, benchmarks are increased by 5 percentage points for qualifying plans. The increase is 10 percentage points for qualifying plans in urban counties with historically high Medicare Advantage penetration and with lower-than-average traditional Medicare spending (double bonus counties). Benchmarks are capped and cannot be higher than they would have been prior to the ACA.  

In each U.S. county, the calculation of traditional Medicare spending for setting the benchmark includes spending for beneficiaries with Parts A and B, and beneficiaries with Part A only or Part B only, even though enrollment in both Part A and Part B is required for Medicare Advantage. Including Part A only and Part B only beneficiaries in the calculation of traditional Medicare spending for the purpose of calculating benchmarks has the effect of reducing average traditional Medicare spending compared to what it would be if spending was based only on beneficiaries enrolled in both Part A and Part B. 

While the law broadly defines how to consider historical traditional Medicare spending for purposes of setting Medicare Advantage benchmarks, it directs the Secretary of HHS, through CMS, to compute the per capita rate for payments and publish this amount. CMS, therefore, decides how to incorporate available data, as well as the economic and other assumptions to use when forecasting how health care spending will grow (since CMS is setting the payment for the upcoming year). CMS also develops, revises, administers and evaluates the methods used to calculate and assign star ratings, which are used to determine the annual increases in the benchmarks, as well as rebates received by plans (described below), and are available for beneficiaries to use to compare plans. To derive star ratings, CMS determines the specific quality measures to use, the source and year of data, how to weight measures, and the cut points for specific star values. In October of each year, CMS publishes updates to quality star ratings, which appear on the Medicare Plan Finder and are used for the subsequent payment year (after the one beginning in the coming January). That is, the quality star ratings published in the fall of 2025 will be used to determine payments for plans available to beneficiaries in 2027.

CMS publishes an Advance Notice of proposed methodological changes and payment policies early in the calendar year and a final Rate Announcement, including the county-level benchmarks, by the first Monday in April. Along with the rate announcement, CMS makes the rate book, as well as the bid pricing tool available at this time. This gives plans the information and time needed to prepare their bids (described in the next section).

Insurers submit bids to cover Medicare A and B services.

After CMS publishes the final rate announcement, insurers estimate how much it will cost to cover Medicare Part A and Part B services (excluding hospice) for the average Medicare beneficiary under each Medicare Advantage plan they propose to offer, plus administrative expenses and profit. Insurers submit their bids to CMS by the first Monday in June. (There is an exception to this process for employer- and union- sponsored plans, which do not submit bids, and instead are assigned a bid amount based on the enrollment-weighted average of bids for plans available in the same counties.) CMS is responsible for reviewing, negotiating, and ultimately determining whether to accept a bid.  CMS publishes the approved Medicare Advantage plans ahead of the October 1^st launch of the marketing period for the coming year and Medicare’s annual open enrollment period that runs from October 15 through December 7.

The law requires insurers to submit certain information as part of their bid, including: a description of the proposed costs of providing all items and services covered under the plan, the proportion attributable to Medicare-covered Part A and Part B benefits, basic Part D prescription drug coverage, and supplemental benefits. Plans are also required to submit the actuarial basis used in their calculations, including a description and the actuarial value of deductibles, coinsurance, and copayments. Plans are required to spend at least 85% of their revenue on plan-covered services (including extra benefits), leaving 15% for administrative expenses and profit. This is also called the medical loss ratio (MLR). Additional instructions to insurers, including information that CMS requires as part of the bid are addressed in the Annual Rate Announcement and included in the instructions for the bid pricing tool.

Payments to Medicare Advantage plans are comprised of two components, the base payment and the rebate.

For all approved bids, CMS calculates how much the federal government will pay the Medicare Advantage plan per enrollee, by comparing the insurer’s bid (to cover the cost of providing Medicare Part A and Part B services) to the benchmark. The precise benchmark against which a bid is compared depends on whether the plan is a local or regional plan, and the specific counties in which the plan operates. Bids for plans that operate across multiple counties are compared against a weighted average benchmark constructed using projections for plan enrollment across the different counties.

The payments to Medicare Advantage plans include the following two components:

• Base payment. For plans that bid at or below the benchmark, the base payment is 100% of the plan’s bid. If the bid is above the benchmark, the plan’s base payment is equal to the benchmark amount, and enrollees in that plan pay a supplemental premium equal to the difference between the bid and the benchmark.
• Rebate. In addition to the base payment, plans that bid below the benchmark receive a portion of the difference between the benchmark and bid, which is called a rebate. (Plans that bid at or above the benchmark receive no rebate.) The percentage of the difference a plan gets depends on the quality star rating of the contract of which it is a part (most Medicare Advantage contracts include multiple plans) and is specified in law. The rebate percentage is 70% of the difference for plans that are part of contracts with at least 4.5 stars, 65% for plans that are part of contracts with 3.5 to 4.5 stars, and 50% for plans that are part of contracts with less than 3.5 stars.
• Plans are required by law to use the rebate dollars to reduce cost sharing, pay for non-Medicare covered benefits (for example, dental, vision, and hearing services), or reduce the Part B and/or Part D premium (as well as to cover associated administrative costs and profit). Since 2018, the rebate portion of the payment has nearly doubled for individual plans, which are broadly available for general enrollment, and more than doubled for special needs plans, which are plans that restrict enrollment to beneficiaries with specific care needs or who are dually eligible for Medicare and Medicaid (Figure 1). Virtually all Medicare Advantage plans now provide supplemental benefits, usually for no additional premium.

Payments to Medicare Advantage plans are adjusted for the health status of enrollees.

The law requires CMS to adjust payments to Medicare Advantage plans for certain demographic characteristics and the health status of enrollees. This is called risk adjustment, and under this process enrollees are assigned a risk score that is intended to serve as a predictor of their expected health care spending. CMS is responsible for developing the risk adjustment model, including deciding which data to use, the number of years of diagnosis data to incorporate, and the set of diagnoses that will factor into the risk score.

CMS periodically revises and updates the risk adjustment model, including how it is referenced (i.e., moving from V24 to V28, the current version in use) and provides notification in the Advance Notice when it proposes to make changes. For example, this occurred in 2023 when CMS proposed an update to the data used to calibrate the risk adjustment model and the year used to estimate the effect of the different factors in the model, as well as changes to how certain conditions that were coded more frequently in Medicare Advantage than in traditional Medicare were incorporated (or not) into the risk adjustment model. After considering comments on their proposed changes, including from industry representatives that were concerned about the impact on benefits and costs, changes were incorporated into V28 and adopted through a phased in process during plan years 2024 and 2025. CMS also makes decisions about other model specifications, such as how to scale risk scores so that the average score for traditional Medicare beneficiaries in the payment year is equal to 1 (this is called the normalization factor).

The law requires the Secretary to reduce Medicare Advantage risk scores by not less than 5.9 percent to account for the difference in coding patterns between Medicare Advantage and traditional Medicare if the risk model is developed using traditional Medicare data (which it currently is). The requirement for an automatic reduction in risk scores is because Medicare Advantage enrollees tend to have more documented diagnoses than they would if covered under traditional Medicare. (See next section for a fuller discussion of coding intensity.)

Medicare Advantage payments exceed expected spending in traditional Medicare.

Medicare payments to Medicare Advantage insurers consistently exceed the amount Medicare would have been expected to spend on enrollees if they were covered under traditional Medicare, according to MedPAC (Figure 3). In 2025, MedPAC estimates that payments per enrollee are 20% higher than expected spending would be in traditional Medicare. That translates into $84 billion of additional spending for 2025 alone. The higher payments to plans and the associated higher spending under Medicare can be attributed almost entirely to coding intensity ($40 billion) and favorable selection ($44 billion), described in more detail below.

Coding intensity contributes to higher spending for Medicare Advantage enrollees.

The current risk adjustment system relies on diagnoses from health care encounters in the prior year and generally provides higher payments to Medicare Advantage plans for enrollees with more reported diagnoses. This system creates incentives for Medicare Advantage plans to document more health conditions for their enrollees than would have been recorded in traditional Medicare. In traditional Medicare, health care providers only have to record enough information about a person’s diagnosed health care conditions to support the service for which payment is being submitted. This results in Medicare Advantage enrollees looking sicker than they would if they had been covered under traditional Medicare. Since the risk adjustment model is calibrated on traditional Medicare beneficiaries, the difference in coding practices means that the model overpredicts spending for Medicare Advantage enrollees and thus pays more for Medicare Advantage enrollees than if they had been covered under traditional Medicare. MedPAC estimates that higher coding intensity in Medicare Advantage contributes $40 billion of the $84 billion in additional Medicare spending in 2025.

Medicare Advantage insurers utilize tools that are never or rarely used in traditional Medicare to capture more diagnoses than are included on health care claims, such as chart reviews and health risk assessments (HRAs), some of which occur in a person’s home rather than in a clinical setting. On the one hand, capturing additional diagnoses could help Medicare Advantage organizations better manage care for enrollees by providing a more complete picture of someone’s health. But on the other hand, such coding practices increase payments to Medicare Advantage insurers often without improving care. Analyses by the Health and Human Services Office of the Inspector General (HHS OIG) and Wall Street Journal found, for example, that enrollees in Medicare Advantage plans frequently had no health care services associated with many of the diagnoses that appear in submissions used to calculate risk scores. MedPAC estimates that in 2023, diagnoses documented from chart reviews and HRAs contributed $24 billion and $15 billion, respectively, to total Medicare Advantage spending, a finding consistent with estimates by other researchers.

The extent to which the embedded incentives and use of additional tools impacts risk scores varies substantially across Medicare Advantage insurers. MedPAC found that in 2023, 85% of Medicare Advantage enrollees were in a plan sponsored by an insurer estimated to have coding practices that increased their enrollees’ risk scores by more than CMS’ 5.9% reduction in risk scores. In other words, even with the across-the-board 5.9% reduction to risk scores applied by CMS, payments for the vast majority Medicare Advantage enrollees remain higher than expected spending in traditional Medicare due to coding intensity.

The reporting of diagnoses for risk adjustment that are not supported by a person’s medical record could be due to insufficient documentation or potentially constitute fraud. Risk Adjustment Data Validation (RADV) audits are the primary tool the government uses to identify and recover payments to plans that were made based on such diagnoses. However, due to limited resources and staff at CMS allocated for RADV audits, the federal government has audited only a small share of Medicare Advantage contracts and has not recouped a substantial amount of Medicare payments made to plans based on coding practices that could not be justified.  

In May 2025, CMS under the Trump administration announced it would audit every Medicare Advantage contract every payment year, substantially increase the staff dedicated to carrying out these audits, and expedite the completion of audits launched between 2018 and 2024. However, it is not clear whether CMS has taken any steps to hire the new staff. Additionally, a federal judge recently struck down a rule finalized under the Biden administration related to RADV audits, which may further complicate CMS’ ability to implement its announced audit strategy. Nevertheless, Dr. Mehmet Oz, the current Administrator for CMS, continues to express concern about coding practices that document more conditions without accompanying treatment, suggesting this will remain a priority for the agency. The Department of Justice also has several ongoing cases alleging that certain insurers submitted diagnoses to CMS for risk adjustment purposes that are not valid, meaning the enrollee does not have the condition at all, and thus are illegal under the False Claims Act.

Favorable selection into Medicare Advantage plans also leads to higher Medicare spending.

Among people with the exact same risk score (based on reported diagnoses and other characteristics) that is used to estimate expected health care spending, actual spending will vary. In other words, some people use more services and incur substantially higher costs than others who have the same reported medical conditions. If people whose actual spending is lower than average among all people with the same risk score are more likely to enroll in Medicare Advantage, then there is favorable selection into Medicare Advantage because the actual cost of providing coverage for enrollees (before any effects from care management) is lower than the payments made to plans. Analysis comparing traditional Medicare spending among people who subsequently enroll in Medicare Advantage and those who remain in traditional Medicare implies favorable selection because traditional Medicare spending among beneficiaries with similar risk scores was lower for those who subsequently enrolled in Medicare Advantage than beneficiaries who stayed in traditional Medicare. MedPAC estimates that favorable selection contributes $44 billion of the $84 billion in additional Medicare spending in 2025.

One reason spending varies across people with the same risk score is that people who are the same age and sex with the same health conditions (the primary inputs into the risk score model) vary in how much health care they actually use, even if their predicted spending would be the same based on having the same risk score. Many things that affect a person’s use of health care services are not captured in the risk score model, including personal preferences or circumstances, tolerance for risk, or clinical nuances that require more or less management of a particular condition.

In the presence of utilization management tools that are common features of Medicare Advantage plans, such as prior authorization, referral requirements, and the use of networks, people who expect to use more health care services may prefer to receive their coverage from traditional Medicare, where these tools are generally not used. While these utilization management tools may deter use of unnecessary or clinically inappropriate services and reduce what the plan spends on Medicare-covered services, these effects are separate from the impact of favorable selection.

Efficiencies achieved by Medicare Advantage insurers do not guarantee savings for the federal government.

Even without the differences in spending due to coding intensity and favorable selection, when plans operate efficiently and have lower costs than traditional Medicare, Medicare payments could still be higher for beneficiaries enrolled in Medicare Advantage plans than expected costs for these beneficiaries under traditional Medicare. This is because the payment system is not designed for the federal government to retain the majority of savings achieved by Medicare Advantage insurers.

First, benchmarks are set at or above traditional Medicare spending in three-quarters of counties (representing nearly 60% of all Medicare beneficiaries), meaning savings are not guaranteed in these counties because the maximum amount the federal government is willing to pay is at least as much as what spending would be in traditional Medicare. Second, benchmarks are further increased under the quality bonus program. For example, in 2025, 75% of Medicare Advantage enrollees are in a plan that receives bonus payments, at an estimated cost of at least $12.7 billion according to a prior KFF analysis. Third, insurers’ rebate payments are set so that they are paid between 50% and 70% of the difference between the benchmark and their bid (the estimated cost of providing Medicare-covered services), which limits the share of any savings attributable to efficiencies that are retained by the federal government.

While most Medicare Advantage plans estimate that their costs for covering Part A and Part B services are well below traditional Medicare spending, with the average bid equal to about 83% of traditional Medicare spending, payments from CMS can still exceed spending in traditional Medicare, particularly in counties with benchmarks set above traditional Medicare costs. That lower spending could stem from a number of factors, such as lower use of health care services, including fewer hospital admissions and less use of post-acute care.

Consider an illustrative county with a benchmark that is 115% of traditional Medicare spending and average traditional Medicare spending of $1,000 per month. Plans with an average bid and at least a 4-star quality rating would potentially receive payments in excess of traditional Medicare spending. As shown in Figure 4, a 4-star plan with estimated costs that are 17% below traditional Medicare spending, that is a bid of $830, would receive $1,071 a month for an average enrollee, compared to traditional Medicare spending of $1,000 per month. In this example, only the 3-star plan would achieve modest ($10 per month) savings for traditional Medicare.

Higher payments contribute to Medicare Advantage plans’ ability to provide extra benefits.

Virtually all Medicare Advantage enrollees are in a plan that offers reduced cost sharing and coverage of non-Medicare covered services, such as dental, vision and hearing, usually for no additional premium. Plans pay for these benefits using their rebate dollars. Additionally, most people in a plan that includes Part D prescription drug coverage do not have to pay the Part D premium, because the plan uses its rebate dollars to cover this cost. Thus, the higher payments to Medicare Advantage plans compared to spending in traditional Medicare allow private plans to provide additional benefits that enrollees potentially value. It is difficult to estimate how much value enrollees get, however, because detailed data on out-of-pocket spending, the use of extra benefits by enrollees, and plan spending by type of extra benefit are not readily available.

A variety of proposals have been put forward to reform the Medicare Advantage payment system.

The higher spending in Medicare Advantage relative to traditional Medicare has prompted numerous proposals to reform the Medicare Advantage payment system. Some proposals aim to address concerns related to coding intensity, either directly or through refinements to the methodology for adjusting payments to plans for the health status of enrollees (risk adjustment). Additional proposals would modify specific levers in the current payment system, such as the methodology for determining benchmarks, the quality bonus program and star ratings, or introducing a new reinsurance program. And others would adopt more fundamental changes to the payment approach, like implementing competitive bidding for Medicare Advantage plans. Often, proposals incorporate multiple reforms (Table 1). In many cases, the proposals described in this section would require Congressional action, while others could be implemented by CMS as part of rulemaking or the annual rate announcement.

Changes to the Medicare Advantage payment system that result in lower payments to plans raise concerns about the impact on plan availability, benefits, and costs. Specifically, since plans use payments from the federal government to reduce cost sharing, pay for non-Medicare covered services, and buy down the Part B and/or Part D premiums, some in the industry have argued that lower payments will translate into fewer extra benefits and higher premiums and other costs for enrollees. Analysis of how Medicare Advantage insurers respond to payment changes thus far suggests that the effects have been modest and that insurers have prioritized reducing their profits or lowering administrative costs over major changes to popular benefits. Following changes to the risk adjustment model that were phased in beginning in 2024, some insurers reduced the number of plans they offered, though overall the market was relatively stable. Ultimately, the response of insurers to changes in payment, and the impact on beneficiaries, will depend on the magnitude of the payment reductions and how gradually the changes are phased in overtime.

Proposals related to coding intensity and risk adjustment.

Several options to reduce the impact of coding intensity differences between Medicare Advantage and traditional Medicare have been proposed. For example, MedPAC recommends several policy changes, including developing a risk adjustment model that uses two years of traditional Medicare and Medicare Advantage diagnostic data to reduce year-to-year variation in the documentation of diagnoses, excluding diagnoses from HRAs (in either traditional Medicare or Medicare Advantage), and applying a coding adjustment that fully accounts for any remaining differences between traditional Medicare and Medicare Advantage. The Congressional Budget Office (CBO) has estimated that a subset of these policies (using two years of data and excluding diagnoses from HRAs) would save $124 billion over 10 years (2025 – 2034).

In recent years, policies to address coding intensity have also gotten increased attention from Congress. For example, the No UPCODE Act, sponsored by Senator Bill Cassidy (R-LA) and Senator Jeff Merkley (D-OR), largely modeled after the recommendations from MedPAC, would require CMS to exclude diagnoses from chart reviews and HRAs, use two years of diagnostic data, and take into account differences in Medicare Advantage and traditional Medicare coding patterns when determining adjustments to Medicare Advantage payment. The legislation has been introduced in two successive sessions of Congress.

Some proposals would increase the coding intensity adjustment applied to all Medicare Advantage plans above the 5.9% minimum. CBO included two variations of an increase in the across-the-board adjustment in its most recent set of Options for Reducing the Deficit, estimating that over 10 years, increasing the across-the-board risk score reduction from 5.9% to 8% would save $159 billion, while an increase from 5.9% to 20% would save more than $1 trillion (both over the 2025 – 2034 time period). A modification of this option would apply a tiered adjustment based on plans’ historical coding behaviors, so plans with higher coding intensity would have a higher adjustment. (CBO has not released an estimate of savings from this option.)

Proposals related to benchmarks.

Options to revise how the federal government determines benchmarks for Medicare Advantage payments include both changes to the quartile system and changes to the calculation of spending in traditional Medicare that serves as the basis for benchmarks. For example, MedPAC recommends replacing the current approach to benchmarks (based on traditional Medicare spending in counties, stratified by quartiles) with a policy that blends local area traditional Medicare spending with standardized national traditional Medicare spending. This approach would keep benchmarks above traditional Medicare spending in low-spending areas, maintaining incentives for insurers to participate in these markets, and below traditional Medicare spending in high-spending areas, allowing the Medicare program to reduce overall spending. The approach also aims to address concerns about basing benchmarks on traditional Medicare spending in counties with very high Medicare Advantage penetration and smooths the differences across counties with similar traditional Medicare spending. The proposal would also apply a 2% discount rate to the benchmark to ensure the federal government retains a minimum level of savings. Some of the savings achieved by the MedPAC proposal would be offset by its recommendation to calculate traditional Medicare spending based on beneficiaries enrolled in both Medicare Part A and Part B (rather than include beneficiaries with Part A only or Part B only), which has a substantial cost, and by eliminating the policy that caps benchmarks at their pre-ACA level. Under this recommendation, the rebate percentage would be set at 75% for all plans (rather than tied to star ratings). In June 2021, MedPAC estimated that taken altogether, these changes would result in $10 billion in savings over 5 years.

Other variations of options to revise the benchmark system include capping benchmarks at a percent of traditional Medicare costs or imposing requirements that adjustments to the benchmark reduce aggregate payments so that they do not exceed spending for similar beneficiaries in traditional Medicare. Paragon Health Institute estimates that capping benchmarks at 100% of traditional Medicare spending in all counties except those with the lowest Medicare Advantage penetration would save $385 billion over 10 years.

Proposals related to quality bonus program and star ratings.

Proposals to reform the Medicare Advantage program often include replacing, modifying, or ending the quality bonus program, and revising the quality star ratings system on which bonuses are based. For example, one Congressional proposal would end the benchmark increases for plans that obtain certain quality scores. In addition, MedPAC has proposed a comprehensive reform to the quality rating system that would replace the quality bonus program with a Medicare Advantage Value Incentive Program (MA-VIP). The MA-VIP would score a small set of measures, evaluate quality at the local level, account for social risk factors, distribute rewards based on a continuous scale so that there is not a sharp “cliff” where only plans above a certain threshold get a bonus, and incorporate both rewards for higher-performing plans and penalties for lower-performing plans. In June 2020, MedPAC estimated that these changes would save more than $10 billion over five years.

Another option includes making the quality bonus program budget neutral by offsetting spending on bonuses for high-quality plans with penalties paid by low-quality plans. The Committee for a Responsible Federal Budget (CRFB) estimates that making the quality bonus program budget neutral would save between $115 billion and $170 billion over 10 years (2024 – 2033).

Additionally, a narrower approach that largely retains the quality bonus program but eliminates double bonus counties would produce some savings. CBO estimates that eliminating double bonuses would save $18 billion over 10 years (2019 – 2028), but that savings estimate could be larger now given the growth in Medicare Advantage enrollment since the estimate was developed.

Proposals related to reinsurance or stop-loss payments.

Another approach would establish a reinsurance mechanism to protect Medicare Advantage insurers from extremely high and unexpected costs that are not otherwise addressed by the risk adjustment model. For example, insurers could be paid more for enrollees that had spending that was substantially higher than predicted, while insurers with enrollees with substantially lower than predicted spending would make payments into the program, designed so the whole system was budget neutral (known as a two-sided approach). One Congressional proposal includes stop-loss payments for plans that experience significantly higher expenditures than expected and authorizes the Secretary to implement such payments in a budget-neutral manner.

Competitive bidding proposals.

Another option would shift away from traditional Medicare spending as the basis for benchmarks and instead use bids submitted by insurers that estimate the cost of providing Part A and Part B services to determine the benchmark. This approach is referred to as competitive bidding. For example, under this approach, the maximum Medicare payment to plans (benchmarks) could be set at the enrollment-weighted average of bids submitted to provide a standard benefit package, similar to the process used in the Part D payment system. CBO has not scored a competitive bidding approach in recent years. The Bipartisan Policy Center estimates that this change could save between $400 billion and $500 billion over 10 years (2024 – 2033).

Over 17 million non-elderly Californians (55%) received health benefits through an employer in 2023. The California Health Benefits Survey (CHBS) tracks trends in their coverage, including premiums, employee premium contributions, cost sharing, offer rates, and employer benefit strategies. In 2025, the survey also included questions about provider networks, coverage for GLP-1 agonists, premium cost drivers, and employee concerns about utilization management. The CHBS is jointly sponsored by the California Healthcare Foundation (CHCF) and KFF.

The 2025 survey includes responses from 464 non-federal public and private firms either located in California or employing workers in the state. The results are representative of California workers. Fielded from January through July 2025, it is the first California Health Benefits Survey since 2022. CHBS is as an oversample of the national KFF Employer Health Benefits Survey, allowing comparisons between the coverage available to workers in California and the nation overall. Unless otherwise noted, this report defines small firms as those with 10–199 workers and large firms as those with 200 or more workers.

Key Findings

• Premiums for covered workers in California are higher than premiums nationally. The average annual single coverage premium in California is $10,033, higher than the national average of $9,325. The average annual family premium in California is $28,397, higher than the national average of $26,993.
• In total, the average family premium has increased annually by 7% in California, and 6% nationally. The average single premium has increased 8% annually in California and 6% nationally. Since 2022, the average premium for family coverage has risen 24% in California, higher than national measures of inflation (12.2%) and wage growth (14.4%).
• Workers are typically required to contribute directly to the cost of coverage, usually through a payroll deduction. On average, covered workers in California contribute 14% of the premium for single coverage and 27% for family coverage in 2025. These shares vary considerably, and some workers face much higher premium contributions, especially for family coverage.
• Overall, a higher share of covered workers in California are enrolled in an HMO than the national average. Over a third (34%) of covered workers in California are enrolled in an HMO, compared to 12% nationally.
• A lower share of covered workers in California face a general annual deductible for single coverage than covered workers nationally (75% vs. 88%), and the average deductible is lower ($1,620 vs. $1,886). The share of California covered workers with a deductible has increased from 68% in 2022 to 75% in 2025.
• Employers in California are significantly less likely than employers across the nation to say there were a sufficient number of mental health providers in their plans’ networks to provide timely access to services.
• Many employers report concerns about out-of-pocket costs: 47% of firms offering health benefits indicate that their employees have a “high” or “moderate” level of concern about the affordability of cost sharing of their plans. One in 10 covered workers in California face a general annual deductible of $3,000 or more for single coverage.
• Large California employers view drug prices as a major driver of rising premiums. Thirty-six percent of large firms report that prescription drug prices contributed “a great deal” to premium increases.
• Over one-quarter (28%) of large firms offering health benefits in California say they cover GLP-1 agonists when prescribed primarily for weight loss. Nearly one-third of these firms report higher-than-expected utilization.

Distributions of Workers and Employers

While 93% of all firms in California are small (10-199 employees), 72% of workers covered by health benefits are employed by large firms (200 or more employees). More than half of covered workers in California and nationally are employed by a firm with 1,000 or more workers (58% and 61%, respectively).

This survey asks employers about the cost of single coverage and coverage for a family of four for up to two of their largest plans.

Health Insurance Premiums

In 2025, the average premiums for covered workers in California are $10,033 for single coverage and $28,397 for family coverage. Premiums for covered workers in California are higher than for covered workers nationally for both single coverage ($10,033 vs. $9,325) and family coverage ($28,397 vs. $26,993).

Plan Type: Premiums vary by plan type. The average annual family premium for covered workers in HMOs is lower than the overall average ($26,562 vs. $28,397). Average premiums for covered workers in HDHP/SOs, including HSA-qualified plans, are similar to the overall average for both single and family coverage.

Firm Size: The average annual premium for family coverage is lower for covered workers at firms with 10 to 199 workers than for covered workers at larger firms ($24,990 vs. $29,595).

These premium amounts can be compared to the income of people with job-based coverage. In California, non-elderly individuals with employer-sponsored insurance who live alone have a median income of $86,000. Among families of four with employer-sponsored insurance, the median income is $183,560. Among all families of four, including those not enrolled in an employer plan, the median family income is $134,000.

Firm Characteristics: Premiums vary by the age of the firm’s workforce.

• In California, the average premiums for covered workers at firms with large shares of younger workers (firms where at least 35% of the workers are age 26 or younger) are lower than the average premiums for covered workers at firms with smaller shares of younger workers for family coverage ($24,906 vs. $28,614).
• In California, the average premiums for covered workers at firms with large shares of older workers (firms where at least 35% of the workers are age 50 or older) are higher than the average premiums for covered workers at firms with smaller shares of older workers for both single coverage ($10,543 vs. $9,413) and family coverage ($30,099 vs. $26,289).

Premium Growth: Since 2022, family premiums have increased 7% annually in California, similar to the national overall increase of 6%. Premiums for single coverage increased 8% annually in California and 6% nationally. For comparison, the annual inflation rate over the period was 4% on average, and workers’ wages increased 5%. In the last year, there was an increase of 4% in workers’ wages, and inflation was 2.7%.

Since 2022, the average premium for family coverage has risen from $22,891 to $28,397, an increase of 24%, compared to inflation (12.2%) and wage growth (14.4%). In the years before the 2022 CHBS was fielded, the economy had experienced high general inflation. Since 2020, inflation has risen by 24%, much faster than the 10% increase between 2015 and 2020, or the 8% increase between 2010 and 2015.

Distribution of Premiums: Premiums for family coverage in California vary considerably. Premiums are set based on a variety of factors, including the cost of providers in the network, the extent of covered benefits, the cost sharing structure, and the number of health services used by enrollees. Among California workers with single coverage, 15% are employed at a firm with an average annual premium of at least $12,500. Fifteen percent of covered workers are in a plan with a family premium of less than $21,000, while 27% are in a plan with a family premium of $33,000 or more.

Worker Contributions to the Premium

For many workers, health insurance is an important component of their total compensation. At the same time, most workers are required to contribute directly to the cost of their health insurance premiums, usually through payroll deductions. The average worker contribution for covered workers in California in 2025 is $1,303 for single coverage and $7,312 for family coverage. On average, covered workers in California contribute a similar amount to the national average to enroll in single or family coverage.

Employers contribute more to the cost of single coverage for covered workers in California than employers do nationally ($8,730 vs. $7,884).

Change Over Time: Compared to 2022, California covered workers contribute a similar amount to enroll in single coverage ($1,192 vs. $1,303) and family coverage ($6,735 vs. $7,312). Since 2022, the average contribution for family coverage in California has increased by about 9%, or roughly 3% per year, but this does not represent a statistically significant change.

Firm Size: In California, the average family coverage premium contribution for covered workers in smaller firms (10 to 199 workers) is much higher than the average for covered workers in larger firms ($9,980 vs. $6,374).

Firm Characteristics: In California, while the average premiums and worker contributions are similar between firms with a large share of lower-wage workers and those with fewer lower-wage workers, the average employer contribution differs. Firms with many lower-wage workers contribute less toward the cost of family coverage ($21,409 vs. $18,001).

Share of the Premium Paid for by Workers: On average, covered workers in California contribute 14% of the premium for single coverage and 27% of the premium for family coverage, similar to the national averages.

Firm Size: Covered workers in California in small firms contribute a higher percentage of the family premium than those in larger firms, 40% vs. 22%.

Share of the Premium Paid for by Workers by Firm Characteristics: The average share of the premium paid directly by covered workers differs across types of firms in California.

• Covered workers in private, for-profit firms have relatively high average contribution rates for single coverage (18%) and for family coverage (31%) coverage. Covered workers in public firms have relatively low average premium contribution rates for family coverage (20%). Covered workers in private not-for-profit firms have relatively low average premium contribution rates for single coverage (5%).
• Covered workers in firms with many higher-wage workers (where at least 35% earn $80,000 or more annually) have a lower average contribution rate for family coverage than those in firms with a smaller share of higher-wage workers (23% vs. 31%).
• Covered workers in firms that have at least some union workers have a lower average contribution rate for family coverage than those in firms without any union workers (20% vs. 32%).

Distribution of Worker Contributions: In California, for single coverage, 47% of covered workers at small firms are enrolled in plans with no premium contribution, compared to only 13% of covered workers at large firms. For family coverage, 35% of covered workers at small firms are enrolled in plans with a worker contribution of more than half the premium, compared to only 5% of covered workers at large firms.

A larger share of covered workers in California are enrolled in a single coverage plan without a premium contribution than covered workers nationally (23% vs. 12%). This pattern also holds among covered workers at small firms (13% vs. 7%).

Another way to illustrate the high cost of family coverage for some workers is to examine the share of workers facing large annual premium contributions. Many workers at small firms encounter substantial costs if they choose to enroll dependents. Among firms offering family coverage, 38% of covered workers in small firms are enrolled in a plan with a premium contribution exceeding $10,000, compared to 12% of covered workers in large firms.

Firms Offering Health Benefits

In 2025, 73% of employers with ten or more workers in California offered health benefits to at least some of their employees, higher than the national average (61%). Virtually all large firms offer health benefits to at least some of their workers, but fewer firms with 10–49 employees (67%) or 50-199 employees (93%) offer coverage. The share of employers offering health benefits to at least some workers in California is similar to 2022 (78%)

Because most workers are employed by larger firms, most workers work at a firm that offers health benefits to at least some of its employees. In 2025, 94% of California workers are employed by a firm that offers health benefits to at least some of its workers, more than the share nationally (91%).

Workers Covered by Firm Benefits

Not all workers at a firm offering health benefits are covered by those benefits. Some workers may be ineligible because they are temporary or part-time, they have to satisfy a waiting period, or they work in a job class that is not offered coverage. Other workers may decline coverage because they are covered under another plan, or believe the coverage is unaffordable.

Among firms that offer health benefits, 61% of workers are enrolled, both in California and nationally. The percentage of workers at California firms offering health benefits who are covered by their firm’s health plan is similar to 2022 (60%). The coverage rate at firms offering health benefits is similar for smaller firms and larger firms in 2025.

In 2025, 56% of California covered workers are at firms that offer health benefits to part-time employees.

Sixty-two percent of covered workers in California work at firms that impose a waiting period before coverage is available. Waiting periods are the time after being hired before a worker becomes eligible to enroll in health benefits.

Firm Characteristics:

• Among workers in California firms offering health benefits, those in firms with many higher-wage workers are more likely to be covered than those in firms with few higher-wage workers (70% vs. 53%).
• Among workers in California firms offering health benefits, those in firms with a small share of younger workers are more likely to be covered by their own firm than those in firms with a larger share of younger workers (63% vs. 40%).
• Similarly, workers in California firms offering health benefits with a large share of older workers are more likely to be covered by their own firm than those in firms with a smaller share of older workers (70% vs. 53%).

Enrollment by Plan Type

Health plans are often categorized into plan types based on coverage for out-of-network services and use of primary care gatekeeping. This survey defines four distinct plan types:

• HMO (Health Maintenance Organization): A plan that does not cover non-emergency services provided out of network.
• PPO (Preferred Provider Organization): A plan that allows use of both in-network and out-of-network providers, with lower cost sharing for in-network services and no requirement for a primary care referral.
• POS (Point-of-Service Plan): A plan with lower cost sharing for in-network services, but that requires a primary care gatekeeper for specialist or hospital visits.
• HDHP/SO (High-Deductible Health Plan with a Savings Option): A plan with a deductible of at least $1,000 for single coverage or $2,000 for family coverage, paired with a health reimbursement arrangement (HRA) or a plan which is health savings account (HSA)-qualified.

Among covered workers in California, about a third are enrolled in PPOs (33%) and in HMOs (34%). About a quarter are enrolled in an HDHP/SO (23%) and the remainder are enrolled in POS plans (9%). Covered workers in small firms are more likely to be enrolled in a POS plan than those at larger firms (19% vs. 5%).

HMOs have long played a prominent role in California. Since 2022, the share of covered workers enrolled in HMOs has been relatively stable (32% in 2022 and 34% in 2025). In 2025, 41% of covered workers in small firms and 32% of covered workers in large firms are enrolled in HMOs.

The distribution of workers across plan types differs considerably from the national distribution, particularly for smaller firms. Covered workers in California are more likely to be enrolled in HMO plans and less likely to be enrolled in a PPO plan or an HDHP/SO than their counterparts nationally.

Availability of Plan Types

Many employers may consider offering a variety of plans, with different balances of cost sharing and premium contributions, to make offerings attractive and affordable to a range of employees. In some cases, workers may be able to choose between different plan type options. In other cases, some workers might be offered one type of plan at one location, while workers at another location are offered a different type of plan.

Covered workers in California are more likely to work at a firm that offers an HMO plan, and less likely to work at a firm that offers an HDHP/SO or PPO plan, compared to covered workers nationally. Plans offered by a given firm may not be available to all workers at that firm.

Availability of HSA-Qualified Plans: Health Savings Accounts (HSAs) are individual savings accounts used to pay for health care expenses. Individuals can open an HSA if they are enrolled in a qualified high-deductible health plan, one with a deductible of at least $1,600 for single coverage and $3,200 for family coverage in 2025. HSA-qualified plans have higher deductibles on average, and sometimes lower premiums, than other plan types. In some cases, employers make a contribution to the savings account, which the enrollee can use to offset cost sharing or other health spending. Over half of large firms in California offer an HSA-qualified plan to some workers, compared to just one in 10 smaller firms.

Employer-based health coverage typically requires a portion of costs to be paid out of pocket when health services are used. Most health plans have a deductible that enrollees must meet before the plan pays for the majority of care. After the deductible is met, plans typically require enrollees to pay a copayment (a specified dollar amount) or coinsurance (a percentage of the cost of services) for each service they use. The reported cost sharing figures are for covered workers using in-network services. Plan enrollees receiving services from providers that do not participate in plan networks often face higher cost sharing and may be responsible for charges that exceed the plan’s allowable amounts. Many plans may have complex plan designs, with different tiers of cost sharing for different providers.

General Annual Deductibles

Prevalence of Deductibles: One feature of employer-sponsored plans that has gained prominence in recent years is deductibles. Seventy-five percent of covered workers in California are enrolled in a plan with a general annual deductible for single coverage, up from 68% in 2022. Similar shares of covered workers at small (76%) and large firms (75%) must meet a general annual deductible before the plan covers most services.

Covered workers in California are still less likely to be enrolled in a plan with a deductible than covered workers nationally (88% vs. 75%).

The likelihood of a plan having a general annual deductible varies by plan type. Thirty-six percent of California covered workers in HMOs have a general annual deductible for single coverage, compared to 79% of workers in POS plans and 92% of workers in PPO plans. A relatively small share of California covered workers enrolled in HMO plans sponsored by large firms are required to meet a deductible (25%).

Across plan types, the share of covered workers with a deductible is similar in California and nationally. However, lower enrollment in HDHP/SOs and higher enrollment in HMOs in California contributes to the overall lower prevalence of deductibles in the state compared to the national average.

Average General Annual Deductible Amounts: For workers in California with single coverage in a plan with a general annual deductible, the average annual deductible is $1,620, similar to the average deductible in 2022 ($1,466).

Covered workers in HDHP/SO plans typically face higher deductibles than covered workers in other plan types, both in California and across the country. For covered workers in California at large firms, the average deductibles for single coverage are $1,156 in HMOs, $1,123 in PPOs, and $2,121 in HDHP/SOs.

Though covered workers at small and large firms are similarly likely to face a deductible, average deductibles are significantly higher at small firms. Across all plan types, for California covered workers in plans with a general annual deductible, the average deductible for single coverage at firms with 10 to 199 workers is $2,063, higher than the average deductible at larger firms ($1,478).

California covered workers are both less likely to face a deductible and more likely to pay a lower average deductible (when they have one) for single coverage, compared to workers nationally ($1,620 vs. $1,886). Covered workers at small California firms who face a deductible also have lower average deductibles than workers at small firms nationally ($2,063 vs. $2,631).

The lower prevalence of deductibles and the lower average deductible amount in California can be assessed by assigning a value of zero to covered workers enrolled in plans without a deductible and calculating the resulting average. This measure reflects both the share of workers facing deductibles and the size of those deductibles. Using this approach, the average general annual deductible for single coverage among all covered workers (including those without a deductible) in California is $1,276, compared to $1,663 nationally. In California, this average increased 10% annually, rising from $959 to $1,276 since 2022. This change represents a 33% increase in the average deductible among all covered workers.

Distribution of Deductibles: Some covered workers face much higher deductibles. Among covered workers in California with a general annual deductible, 14% in an HMO, 8% in a PPO, and 21% in an HDHP/so have a deductible of $3,000 or more for single coverage.

Deductibles may present an affordability challenge for those enrolled in family plans, where multiple family members have to meet individual deductibles, or where an entire family’s spending is counted against a typically higher aggregate deductible. Among those with an aggregate family deductible, many covered workers face a deductible of $5,000 or more, including 22% of those enrolled in HMOs, 7% enrolled in PPO plans, 24% enrolled in POS plans, and 24% enrolled in HDHP/SOs.

Share of Covered Workers Enrolled in High-Deductible Plans: In California, 20% of covered workers are in plans with a general annual deductible of $2,000 or more for single coverage, similar to the share in 2022 (19%).

In total, 11% of covered workers in California face a deductible of $3,000 or more for single coverage. Covered workers in the state have a deductible of $3,000 or more at a rate higher than workers nationally (11% vs. 19%).

Firm Size: California workers at firms with 10 to 199 workers are considerably more likely to have a general annual deductible of $2,000 or more for single coverage than workers at larger firms (31% vs. 16%). Many covered workers at small firms face even higher deductible thresholds for single coverage. Almost one in five covered workers (18%) in small firms in California have a general annual deductible of $3,000 or more.

Copays and Coinsurance for Office Visits

The majority of covered workers in California are enrolled in health plans that require cost sharing for an in-network physician office visit, in addition to any general annual deductible.

Primary Care Visits: Seventy-nine percent of workers in California had a copay for primary care office visits. Among covered workers with a copayment for an in-network office visit, the average copayment is $28.

Specialist Office Visits: For specialist office visits 73% of covered workers in California had a copay, averaging $42.

The distribution of copays is similar for covered workers in California and nationally, with about one in ten facing a copay of more than $60 a for specialist office visit.

California covered workers in HDHP/SO plans are much more likely to face a coinsurance amount for both primary care visits (80%) and specialist visits (80%) than covered workers in other plan types.

Out-of-Pocket Maximum

Out-of-pocket limits are the maximum amount an enrollee is required to spend on cost sharing for in-network services in a year. After the enrollee reaches this limit, the plan pays for all covered expenses for the remainder of the plan year. Virtually all California covered workers are in a plan with an out-of-pocket limit, but the actual limits vary considerably: 20% of covered workers with an out-of-pocket maximum have an out-of-pocket maximum of $2,000 or less for single coverage, while 24% have an out-of-pocket maximum above $6,000. Workers with family coverage may face higher out-of-pocket limits, or individual limits for each plan enrollee.

Many firms, particularly larger firms, choose to pay the cost of the health services for covered workers directly from their own funds, rather than purchasing health insurance. These self-funded plans are often administered by an insurer or other entity, which processes claims and pays providers on behalf of the firm. Self-funded plans established by private employers are exempt from most state insurance laws, including reserve requirements, mandated benefits, premium taxes, and certain consumer protection regulations.

Forty-nine percent of covered workers in California are in a plan that is self-funded, the same percentage as 2022. Covered workers in California are less likely to be in a self-funded plan than covered workers nationally (49% vs. 67%). This can be partially attributed to HMOs being more common in California than they are nationally. Both in California and nationally, covered workers enrolled in HMOs are less likely to be in self-insured plans than workers in other plan types (22% in California vs. 42% nationally).

California covered workers in firms with 200 or more workers are much more likely to be in a self-funded plan. About three-quarters of covered workers in firms with 5,000 or more workers (78%) are in self-funded plans, compared to 11% of covered workers in firms with 10-199 workers.

Stop Loss: Many firms with self-funded plans purchase insurance, often referred to as “stop loss” insurance, to protect themselves from unexpected losses. At firms with 200 or more workers, 70% of California covered workers in self-funded health plans are in plans that have stop loss insurance.

Health Screening

Many large firms offer health screening programs to help identify health risks and health problems among enrollees. Health risk assessments are questionnaires asking about physical health, lifestyle, stress, or other activities. Biometeric screenings are in-person health examinations conducted by a medical professional to measure certain health metrics, such as weight, blood pressure, or cholesterol. Firms and insurers use the health information collected during screenings to target wellness offerings, manage cases, or offer health services or supports to enrollees before their health conditions worsen.

Health Risk Assessments: Fifty-two percent of California firms with 200 or more workers provide workers the opportunity to complete a health risk assessment in 2025. Among these large firms with a health risk assessment program, 49% use incentives or penalties to encourage workers to complete the assessment.

Biometeric Screening: Forty-four percent of California firms with 200 or more workers provide workers the opportunity to complete a biometric screening in 2025. Among these large firms with a biometric screening program, 59% use incentives or penalties to encourage workers to complete the screening. Among these large firms with a biometric screening program, 12% have incentives or penalties tied to whether enrollees meet or achieve specified biometric outcomes, such as maintaining a certain cholesterol level or body weight.

Taken together, 63% of California firms with 200 or more workers offering health benefits offer at least one of these health screening programs, including 81% of firms with 5,000 or more workers.

Wellness and Health Promotion

Many California firms with 200 or more workers offering health benefits also offer programs to encourage workers and their dependents to improve their health, including programs to help them to stop smoking or using tobacco (47%), or lose weight (47%), or other lifestyle or behavioral coaching (52%).

Overall, 84% of California firms with 200 or more workers offering health benefits also offer at least one of these three types of programs to their workers, including 96% of firms with 5,000 or more workers. Employers may offer incentives to encourage employees to participate in these programs.

Employers offering health benefits were asked about several aspects of their plan designs, network and coverage.

Provider Networks and Access to Primary Care

The design and structure of an employer’s provider network plays a significant role in the access to health services granted by their health plans. In their role as health care purchasers, employers may design networks to reduce costs by steering enrollees toward more efficient providers. Employers also may develop programs intended to supplement enrollee access to care.

Narrow Networks: Some employers offer their employees a health plan with a narrow, or relatively small, network of providers. Narrow network plans limit the number of providers that can participate in order to lower premiums and reduce costs. These networks are generally more restrictive than standard HMO networks.

• Twenty-four percent of California firms offering health benefits offered at least one narrow network plan to their workers in 2025.
• Firms with 10-199 workers in California are more likely to offer at least one plan with a narrow network than small firms nationally (26% vs. 9%).

Sufficiency of Networks: Provider shortages or restricted provider networks may mean there may not be enough available providers in plan networks to ensure enrollees have timely access to care. Firms offering health benefits were asked whether they believed that the provider network for their health plan with the largest enrollment had a sufficient number of providers to provide timely access to primary care, specialty care, and mental health services.

Among firms offering health benefits, 88% say that there is a sufficient number of providers in their health plan with the largest enrollment to provide timely access to primary care services and 83% say there is a sufficient number of specialist providers.

Conversely, only 52% of California firms that offer health benefits say that there is a sufficient number of providers in their health plan with the largest enrollment to provide timely access to mental health services for plan enrollees.

California employers are less likely than employers nationally to report having a sufficient number of mental health providers in their networks in their plan with the largest enrollment. Among firms with 10 to 199 workers offering health benefits in California, 52% indicate there are enough mental health providers, compared to 70% nationally. Among larger employers in California, 60% report having a sufficient number of mental health providers, compared to 68% nationally.

Other Network Strategies: Employers may work with health plans or vendors to modify or supplement plan networks to reduce costs or improve access. Employers were asked about a range of provider network strategies they had implemented.

• A small percentage of large employers contract directly with providers, such as hospitals or health systems, to provide for their employees outside of their health plan’s network. Among large California firms that offer health benefits 6% directly contract with a provider, including 15% of firms with 5,000 or more workers.
• Some firms offer plans with high-performance networks or tiered networks. These plans use cost sharing or other incentives to encourage enrollees to use in-network providers that have better performance or lower costs. Among California firms with 200 or more workers that offer health benefits, 11% offer a health plan with a high-performance or tiered network, including 16% of firms with 5,000 or more workers.
• Some employers may contract with a vendor to offer specialized care or a virtual care benefit for enrollees during menopause. These services may include education, access to specialty care and mental health support. Among California employers with 200 or more workers that offer health benefits, 9% have vendor contracts to provide support for workers or their dependents during menopause, including 19% of firms with 5,000 or more workers.

Primary Care

Alternative approaches to provide primary care, such as virtual care and direct primary care contracts, are sometimes offered by employers.

Among California firms with 50 or more workers that offer health benefits, 38% have a contract to provide virtual primary care services, including telehealth, that go beyond the services provided in their health plan networks. Firms with 1,000 or more workers are more likely than smaller firms to have a contract for virtual primary care services (46% vs. 37% respectively).

A direct primary care contract entails a fixed periodic fee that grants eligible members access to primary care and preventive services, supplementing the coverage provided by the plan’s network. Among firms in California with 50 or more employees that offer health benefits, 8% have a direct primary care contract in addition to the providers in the health plan networks.

Factors Contributing to Rising Premiums

Firms that offer health benefits report on the factors that they believe have contributed to higher health plan premiums in recent years. Employers were asked about the impact of prescription drug prices, coverage for new prescription drugs, higher prices for hospital services, higher utilization of health services, and the prevalence of chronic disease.

Among California firms with 200 or more workers offering health benefits:

• Thirty-six percent say that prescription drug prices contributed “a great deal” to higher premiums; this includes 63% of firms with 5,000 or more workers.
• Thirty-one percent say that the prevalence of chronic disease contributed “a great deal” to higher premiums; this includes 46% of firms with 5,000 or more workers.
• Twenty-eight percent say that higher utilization of health services contributed “a great deal” to higher premiums; this includes 18% of firms with 5,000 or more workers.
• Twenty-seven percent say that the use of new prescriptions contributed “a great deal” to higher premiums; this includes 40% of firms with 5,000 or more workers.

California’s Cost Growth Targets

California’s Office of Health Care Affordability has established a statewide health care spending growth target. Going forward, plans, purchasers, and regulators may use this target to encourage health care spending growth that is more in line with income growth for California families.

Familiarity With Targets: Among California employers with 200 or more workers offering health benefits, about seven in ten (70%) have not heard of the cost growth targets, and another 17% have “heard of it” but did not know any details. Only 2% say that they knew a “a fair amount” about the targets. Even among firms with 5,000 or more workers, only 6% say that they knew a “a fair amount” about them.

Impact of Targets: Given the low level of familiarity with the cost growth targets, relatively few employers think that they would have a big impact on health care spending. Seven percent of large California firms offering health benefits think that the targets would have “a great deal” of impact. Many employers do not know what the impact would be (40%).

Coverage For GLP-1s For Weight Loss

Health plans generally cover GLP-1 agonists for people with diabetes. However, these medications can also be effective for weight loss. The relatively high price of these drugs, combined with potential for long-term usage, has raised concerns about the costs for plans that cover them.

In 2025, among California firms that provide health benefits, 22% of those with 200 to 999 workers, 31% of those with 1,000 to 4,999 workers, and 50% of those with 5,000 or more workers cover GLP-1 agonists when used primarily for weight loss in their largest plan.

A larger share of large firms in California cover GLP-1 agonists when used primarily for weight loss in their largest plan than large firms nationally (28% vs. 19% ). Among firms with 5,000 or more workers, 50% of firms in California covered GLP-1 agonists, compared to 43% nationally.

Many firms that cover these medications for weight loss require enrollees to take additional steps to address their weight. Among large firms in California that cover GLP-1 agonists for weight loss, 45% require enrollees to meet with a dietitian, case manager or therapist, or participate in a lifestyle program, in order to receive coverage.

Utilization and Spending on GLP-1s: Large firms in California that cover GLP-1 agonists for weight loss were asked about how their use compares with expectations. Forty percent of these firms with 1,000 to 4,999 workers and 50% of firms with 5,000 or more workers say that use was higher than they expected.

A similar share of large employers covering GLP-1 agonists for weight loss say that use was higher than expected in California, as it was nationally (31% and 24%).

Large California firms covering GLP-1 agonists for weight loss report how their coverage affects their plan’s spending on prescription drugs. Among firms with 200 or more workers covering these medications for weight loss, 44% of large firms say that GLP-1s for weight loss had a “significant” impact on their prescription drug spending.

Importance of GLP-1s on Enrollee Satisfaction: Almost three-quarters (71%) of California firms with 200 or more workers that cover GLP-1 agonists for weight loss say that it is “very important” or “somewhat important” to their employees’ satisfaction with their health plan. Even among large firms that do not cover GLP-1s for weight loss, 45% say that doing so is “very important” or “somewhat important” for employees` satisfaction. Many employers may continue to feel pressure to add this coverage.

Employee Concerns with Plan Management

Employers assess the level of concern they believe their employees have about various aspects of health plan management. Among California firms offering health benefits:

• Forty-seven percent say that their employees’ level of concern over the affordability of cost sharing is “high” or “moderate”; this includes 71% of firms with 5,000 or more workers.
• Forty-nine percent say that their employees level of concern over their ability to schedule timely appointments is “high” or “moderate”; this includes 43% of firms with 5,000 or more workers.
• Thirty-one percent say that their employees level of concern over the complexity of prior authorization requirements is “high” or “moderate”; this includes 59% of firms with 5,000 or more workers.

The California Health Benefits Survey (CHBS) is a joint project of the California Health Care Foundation (CHCF) and KFF. The survey was designed and analyzed by researchers at KFF, and administered by Davis Research LLC (Davis). Findings are based on a random sample of 464 interviews with employee benefit managers in firms located in or employing workers in California. An additional 676 firms answered only whether they offered health benefits. Interviews were completed between January 28, 2025 and July 23, 2025. Responses reflect employers’ plans at the time of interview. The response rate for the full survey was 13 percent. Collectively, 201,000 of the 8,061,000 workers covered by their own firm’s health benefits in California were employed by firms that responded (2.5%).

Consistent with the approach in 2022, the 2025 survey was conducted as an oversample of California-based employers participating in the KFF Employer Health Benefit Survey (EHBS). Estimates are therefore comparable to those in the 2023 CHBS. All firms were asked about the characteristics of their workforce in California and nationwide and contribute to both surveys. To ensure reliability at both the national and state levels, weights for the California sample were calibrated to state-specific targets from the U.S. Census Bureau’s Statistics of U.S. Businesses (SUSB) and the Census of Governments by size and industry. Weights are constructed for employers, workers, covered workers, and workers by plan type in California and trimmed to reduce the influence of outliers. Overall, 91% of employers and 14% of covered workers are in firms where all covered workers reside in California.

Previous iterations of the CHBS are available but as explained in the 2023 methods section, we have implemented several methodological changes over time.

The sample includes private firms and non-federal government employers with ten or more employees. The sampling universe is defined by the U.S. Census’ 2021 Statistics of U.S. Businesses for private firms and the 2022 Census of Governments (COG) for public employers.

Beginning in 2025, neither EHBS nor CHBS includes firms with 3-9 employees, reflecting longstanding challenges in surveying the smallest firms and their limited effect on national estimates. Although there are 1.95 million such firms in the U.S., they employ a small share of workers. As a result their exclusion does not meaningfully affect worker-weighted estimates (e.g., premiums, contributions, cost sharing, or plan enrollment). For comparability, estimates from prior years shown here have been recalculated to exclude 3-9 worker firms; as a result, they differ from previously published values.

The 2025 sample of non-panel firms was drawn from Dynata (based on a Dun & Bradstreet census of private employers with ≥10 workers) and Forbes America’s Largest Private Companies. Employers who participated in the 2024 or 2023 EHBS were invited to participate. Firms were sampled by size and industry. In 2025, 464 firms responded, including 64% that had previously completed one of the listed surveys. Respondents could complete the survey online or by computer-assisted telephone interview. In total, 51% percent of responses (representing 31% of covered workers in California) were completed via telephone; the remainder were online.

Benefit managers reported on the premiums and deductibles of up to two plans, plus additional information on their plan type with the most enrollment. Plan types were defined as: health maintenance organizations (HMOs), preferred provider organizations (PPOs), point-of-service (POS) plans, and high-deductible health plans with a savings option (HDHP/SOs). HDHP/SOs were defined as plans with deductibles of at least $1,000 for single coverage and $2,000 for family coverage that also offered a health reimbursement arrangement (HRA) or health savings account (HSA). Overall, 78 percent of covered workers are enrolled in their firm’s largest plan type, and 96 percent are in one of the two largest plan types. Small firms are defined as those with 10-199 workers and large firms as those with 200 or more workers. Firms with “many lower-wage workers” were defined as those with at least 35 percent of employees earning $37,000 or less annually.

Because of the complex survey design, even large differences between estimates may not be statistically significant. In 2025, 44% of covered worker weights—but only 1% of employer weights—were represented by firms with 5,000 or more workers. Conversely, firms with 10-24 workers comprised 59% of employer weights but only 7% of covered worker weights.

To account for design effects, standard errors were calculated using the R version 4.5.1 (2025-06-13 ucrt) version of R and the “survey” package (version 4.4-8). Some exhibits do not sum to 100% due to rounding.

As noted, methods in the 2025 CHBS match those used in the 2025 EHBS. For more details on weighting, imputation, and sampling, see: KFF EHBS Survey Design and Methods.

Actions taken by the Trump administration and Congress will likely have major impacts on health and health care for immigrant families. As of June 2025, there were 51.9 million immigrants residing in the U.S. representing diverse backgrounds and experiences. In addition, about one in four children in the U.S. has at least one immigrant parent, and the vast majority of these children are U.S. citizens. President Trump’s increased immigration enforcement activity has contributed to resounding levels of fear and uncertainty among the immigrant community, which can negatively affect the health and well-being of immigrant families and make them more reluctant to access health coverage as well as health care. Moreover, the 2025 tax and spending law and other recent policy changes will further limit access to health coverage and services for many lawfully present immigrants who already face eligibility restrictions for federally funded coverage options, amid broader projected coverage reductions and anticipated increases in health care costs.

This report provides new data on health and health care experiences of immigrant adults ages 18 and over in the U.S. amid the current policy environment. It is based on a KFF survey conducted in partnership with The New York Times in Fall 2025. It builds on the 2023 KFF/LA Times Survey of Immigrants and two additional surveys conducted by KFF in 2024 and  2025. Separate reports examine immigrants’ experiences amid increased immigration enforcement and the political implications of immigrant voters’ views on immigration enforcement.

Key Takeaways

• Since President Trump took office in January 2025, four in ten (40%) immigrant adults overall and nearly eight in ten (77%) likely undocumented immigrants say they have experienced negative health impacts due to immigration-related worries. These negative impacts include increased stress, anxiety, or sadness; problems sleeping or eating; and/or worsening health conditions like diabetes or high blood pressure. Notably, nearly half (47%) of lawfully present immigrants and about three in ten (29%) of naturalized citizens report at least one of these impacts. Among immigrant parents, about one in five (18%) say that their child’s well-being has been impacted since January 2025, including problems sleeping or eating, changes in school performance or attendance, or behavior problems.
• Overall, 15% of immigrant adults report being uninsured as of 2025, with higher uninsured rates among immigrant adults who are likely undocumented (46%) and lawfully present (21%) compared to naturalized citizens (7%). This pattern reflects that undocumented immigrants are prohibited from accessing federally funded health coverage options and many lawfully present immigrants face eligibility restrictions for federally funded coverage. Among immigrant parents, 15% report at least one uninsured child, rising to over a quarter (27%) among immigrant parents who are likely undocumented. Most children of immigrants are U.S.-born citizens and therefore not subject to eligibility restrictions for immigrants
• The share of immigrant adults who said they avoided applying for a government program that helps pay for food, housing, or health care in the past 12 months because they did not want to draw attention to their or a family member’s immigration status rose from 8% to 12% between 2023 and 2025. Increases were larger among those who are likely undocumented (27% to 46%) or parents (11% to 18%). Further, 11% of immigrant adults say they have stopped participating in such a program since January 2025 because of immigration-related worries, including about four in ten (42%) of those who are likely undocumented and about one in six (17%) parents.
• The share of immigrant adults who reported skipping or postponing health care in the past 12 months increased from 22% to 29% between 2023 and 2025. Among those who went without care, about one in five (19%) immigrant adults say it was due to immigration-related concerns. However, across immigrant adults, larger shares cite cost or lack of coverage (63%) as a reason why they skipped or postponed health care. Additionally, three in ten (30%) immigrant parents say that any of their children delayed or skipped health care in the past 12 months due to immigration-related fears, cost or lack of insurance, and/or not being able to find services at a convenient time or location. The overall share rises to about six in ten (58%) of parents who are likely undocumented, with 43% of likely undocumented parents citing immigration concerns. 
• Reluctance to access care may in part reflect concerns about health care providers sharing information with immigration enforcement officials. About half (51%) of immigrant adults overall and about eight in ten (78%) of those who are likely undocumented say they are “somewhat” or “very” concerned about health care providers sharing information about immigration status with immigration enforcement officials. These fears have likely been exacerbated by the Trump administration sharing noncitizen Medicaid enrollee information with the Department of Homeland Security (DHS), although this action has since been limited by court action in some states.

Immigrant adults across immigration statuses are experiencing negative impacts on their health and facing increased barriers to accessing health coverage and care for themselves and their children. These impacts are particularly pronounced for immigrants who are likely undocumented, parents, lower income, or who have limited English proficiency (LEP). These experiences will likely contribute to worse health outcomes for immigrant adults and their children, who are primarily U.S.-born citizens. Negative impacts also may have spillover effects on the U.S. economy and workforce given that immigrants play an outsized role in many occupations including health care, construction, and agriculture. Going forward, immigrant families will likely continue to experience negative impacts on their health and health care given ongoing enforcement activity and policies that will further limit access to health coverage for lawfully present immigrants.

Impacts of Immigration-Related Fears on Health

Four in ten (40%) immigrant adults overall and nearly eight in ten (77%) likely undocumented immigrants say they have experienced negative health impacts due to immigration-related worries since January 2025 (Figure 1). These negative health impacts include increased stress, anxiety, or sadness; problems sleeping or eating; or worsening health conditions like diabetes or high blood pressure due to immigration-related worries. Notably, nearly half (47%) of lawfully present immigrants and about three in ten (29%) of naturalized citizens report at least one of these impacts. About half of Hispanic (51%) and Black (46%) immigrant adults, those with lower incomes (annual household income of less than $40,000) (49%), and immigrant parents (47%) report these health impacts.

When asked to describe impacts of the Trump administration’s immigration enforcement activities on themselves or their family in their own words, a number of immigrants say they and their families have experienced increased anxiety and stress due to fears, uncertainty about the future, and increased racial discrimination (Box 2). Some also mention feeling increased sadness or depression about how they and others are being treated. These responses echo experiences shared by likely undocumented Hispanic immigrants in focus groups conducted during March 2025, who described feeling anxious, stressed, depressed, isolated, and lonely due to changes in their daily lives and constantly being on high alert as well as increased feelings of sadness and fears among their children. Participants also described suffering from insomnia, loss of appetite, and symptoms such as stomach problems and migraine headaches due to fears and stress.

Among immigrant parents of a child under 18 years old, about one in five (18%) say their child’s well-being has been negatively impacted by immigration-related worries since January 2025. These impacts include problems sleeping or eating (14%); changes in school performance or attendance (12%); or behavior problems (12%) (Figure 2). Reports of impacts on children are particularly high among likely undocumented immigrant parents (46%), parents with lower incomes (30%), and immigrant parents with LEP (24%).

Health Coverage and Other Assistance Programs

Fifteen percent of immigrant adults age 18 and older and 19% of immigrant adults between ages 18 and 64 report being uninsured as of 2025. In comparison, 6% of U.S.-born adults ages 18 and older and 8% of U.S.-born adults ages 18-64 say they lack coverage.¹ Most immigrant adults are working, but many are employed in lower income jobs and industries that are less likely to offer employer sponsored insurance, contributing to lower rates of private coverage than their U.S.-born counterparts. Medicaid coverage helps fill some of the gap in private coverage, but many lawfully present immigrants are subject to eligibility restrictions for federally funded health coverage and undocumented immigrants are not eligible for any federally-funded health coverage. As such, more than four in ten (46%) likely undocumented immigrants and about one in five (21%) lawfully present immigrant adults report being uninsured compared to 7% of naturalized citizens (Figure 3). Uninsured rates for immigrant adults remained relatively stable between 2023 and 2025 but will likely increase in future years because the 2025 tax and budget law will further restrict access to federally funded coverage for lawfully present immigrants, including Medicaid or the Affordable Care Act (ACA) Marketplaces.

Uninsured rates among immigrant adults also vary by other factors including race or ethnicity, parental status, income, and English proficiency. Hispanic immigrant adults (27%), those with lower incomes (23%), those who have LEP (23%), and those who are parents (22%) are more likely to be uninsured compared to their White (5%), higher income (4%), English proficient (10%), and non-parent (11%) counterparts (Figure 4).

Uninsured rates among immigrant adults also vary based on where they live, in part, reflecting different coverage expansion choices by states. States vary in the coverage they provide for their low-income populations overall as well as immigrants specifically. States that have adopted the ACA Medicaid expansion have broader eligibility for low-income adults overall, but noncitizen immigrants still face eligibility restrictions for this coverage. Some states have expanded coverage for immigrants by eliminating the five-year waiting period in Medicaid and/or the Children’s Health Insurance Program (CHIP) for lawfully present children and/or pregnant people and/or extending coverage to some immigrants regardless of immigration status through fully state-funded programs, although states recently have been reducing or eliminating this coverage. Immigrant adults who live in states that provide more expansive coverage, including the ACA Medicaid expansion and immigrant coverage expansions, are about half as likely to be uninsured compared with those living in states with less expansive policies (11% vs. 23%), reflecting higher rates of Medicaid or state-funded coverage in these states (Figure 5) (see Box 3 for definition of state health coverage expansiveness).

Among immigrant parents, 15% reported at least one uninsured child as of 2025 (Figure 6). This share rises to about a quarter (27%) among immigrant parents who are likely undocumented and about one in five of those with lower incomes (22%) or LEP (21%). 

The share of immigrant adults who say that, in the past 12 months, they avoided applying for a government program that helps pay for food, housing, or health care because they did not want to draw attention to their or a family member’s immigration status increased from 8% to 12% between 2023 and 2025 (Figure 7). Increases were larger among those who are likely undocumented (27% to 46%) or parents (11% to 18%). Further, 11% of immigrant adults say that they stopped participating in a government program that helps pay for food, housing, or health care because they did not want to draw attention to their or a family member’s immigration status since January 2025, including about four in ten (42%) likely undocumented immigrants and about one in six immigrant parents (17%) (Figure 8).

Access to Health Care

The share of immigrant adults who reported skipping or postponing health care in the past 12 months increased from 22% to 29% between 2023 and 2025. Among uninsured immigrant adults, the share reporting skipping or postponing care rose to half (50%) as of 2025, up from 36% in 2023 (Figure 9). Delaying or going without needed care can contribute to health problems becoming worse and taking more time and resources to treat. Among immigrant adults who skipped or postponed health care, 36% said their health got worse as a result (11% of all immigrant adults).

Cost and lack of coverage, limited access to care, and fears are factors contributing to immigrant adults skipping or postponing health care. About six in ten (63%) immigrant adults who skipped or postponed health care in the past year (18% of all immigrant adults) say they did so because of cost or lack of insurance,  about for in ten (42%) (12% of all immigrant adults) say they did so because they were not able to find services at a time or location that worked for them, and 19% (5% of all immigrant adults) say it was because of concerns about their or a family member’s immigration status (Figure 10). Among those who completed the survey in a non-English language and also skipped or postponed care, 24% cited language access challenges. Cost or lack of coverage and immigration concerns are higher among uninsured adults who skipped or postponed care compared to those with coverage.

Further, three in ten (30%) immigrant parents say any of their children delayed or skipped health care in the past 12 months due to immigration-related fears (14%), not being able to find services at a convenient time or location (13%), or cost or lack of insurance (12%). Rates of delayed or skipped health care are higher among immigrant parents who are likely undocumented (58%), with 43% citing immigration concerns. They also are higher among parents who are uninsured (44%), have no regular source of care other than an emergency room (42%), or have LEP (42%) (Figure 11). 

Nearly half (48%) of likely undocumented immigrants and 14% of immigrant adults overall say they or a family member have avoided seeking medical care since January 2025 due to immigration-related concerns. Uninsured immigrant adults and those who are parents are more likely to say they or a family member avoided seeking medical care due to immigration-related fears than their insured and non-parent counterparts (Figure 12). Substantial shares of immigrant adults, particularly those who are likely undocumented, also report avoiding other activities such as going to church or other community activities, going to work, or taking their child to school or school events.

Reluctance to access health care may, in part, reflect concerns about health providers sharing information with immigration enforcement officials. About half (51%) of immigrant adults, including about eight in ten (78%) who are likely undocumented, say that they are “somewhat concerned” or “very concerned” about health officials, hospitals, or health care providers sharing patients’ information with Immigration and Customs Enforcement (ICE) or Customs and Border Protection (CBP) (Figure 13). These fears may have been exacerbated by the Trump administration’s action in June 2025 to share the personal and health data of noncitizen Medicaid enrollees with the Department of Homeland Security (DHS) for purposes of immigration enforcement despite concerns related to the violations of federal and state privacy data protections. While a federal court temporarily blocked the Trump administration from sharing enrollee data for immigration enforcement in the 20 states that filed a lawsuit, the move still likely contributes to fears.

Beyond fears, health care costs remain a significant and growing concern for immigrant families as do challenges paying for other basic needs like food and housing. As of 2025, about one in three immigrant adults (36%) say that they or someone living with them had problems paying for health care in the past 12 months, up from one in five (20%) in 2023. Cost concerns are particularly high among immigrant adults who are uninsured, with about six in ten (62%) of uninsured immigrant adults reporting problems paying for health care compared to 31% of their insured counterparts and up from 38% of those who said the same in 2023 (Figure 14).

Community health centers are a primary source of care for immigrant adults but may face increased challenges serving them due to recent policy changes. Consistent with the overall adult population, most immigrant adults say they have a usual source of care other than a hospital emergency room (78%), but the share is lower among likely undocumented (64%) and uninsured immigrant adults (50%).Overall, three in ten (30%) immigrant adults report using a neighborhood clinic or community health clinic (CHC) when they are sick or need health advice (Figure 15). CHCs are a national network of over 1,300 safety-net primary care providers located in medically underserved communities and serve all patients regardless of their ability to pay. Reflecting this role, CHCs serve as a usual source of care for large shares of immigrant adults who are likely undocumented (45%), covered by Medicaid (42%), Hispanic (42%), have lower incomes (38%), or have LEP (37%). These data reflect shares of immigrant adults who report they use a CHC when they are sick or need health advice but do not reflect use of care over any specified time period and cannot be used to estimate the share of CHC patients who are immigrants in a given year. CHCs will likely face increased challenges serving patients due to Medicaid cutbacks in the 2025 tax and budget law. A Trump administration policy change also restricts access to CHCs for undocumented and some lawfully present immigrants, although implementation of this change is halted in 20 states and D.C. under a court ruling.

The KFF/New York Times 2025 Survey of Immigrants was designed and analyzed by public opinion researchers at KFF. The survey was conducted August 28 – October 20, 2025, online, by telephone, and by mail among a nationally representative sample of 1,805 immigrants, defined as adults living in the U.S. who were born outside the U.S. Respondents had the option to complete the survey in one of six languages: English (n=1,310), Spanish (n=431), Chinese (n=38), Korean (n=21), and Vietnamese (n=5), and Haitian-Creole.

Teams from KFF and The New York Times worked together to develop the questionnaire and both organizations contributed financing for the survey. Each organization bears the sole responsibility for the work that appears under its name. Sampling, data collection, weighting, and tabulation were managed by SSRS of Glenn Mills, Pennsylvania in collaboration with public opinion researchers at KFF.

Sampling strategy

Respondents were reached through one of five sampling modes: an address-based sample, a random digit dial telephone (RDD) sample of prepaid (pay-as-you-go) cell phone numbers, a callback sample of telephone numbers that were previously selected for an RDD survey, the SSRS Opinion Panel, and the SSRS/KFF Immigrants Panel. Marketing Systems Group (MSG) provided the random samples of addresses and phone numbers utilized by each of the five sampling modes. Telephone interviewing of all sample types was managed by SSRS of Glen Mills, PA.

The address-based sample (n=646) was divided into areas (strata), defined by Census tract, based on the incidence of immigrants among the population overall and by countries of origin. Within each stratum, the sample was further divided into addresses that were flagged as possibly occupied by immigrant adults, and unflagged addresses. To increase the likelihood of reaching households with immigrant adults, strata with higher incidence of immigrants overall, and of certain countries of origin in particular, were oversampled.

The RDD prepaid sample (n=233) was disproportionately stratified to effectively reach immigrants from particular countries, based on county-level information. Among this prepaid cell phone component, 117 interviews were completed by phone and 116 were completed via web survey after being invited by short message service (SMS).

71 respondents were reached by calling back telephone numbers that were previously randomly selected for RDD surveys and had either self-reported being born outside the use (n=66), or an interviewer had noted that the respondent spoke a language other than English or Spanish (n=5). 377 respondents were reached through the SSRS Opinion Panel, a nationally representative probability-based panel, and 478 respondents were reached through the SSRS/KFF Immigrants Panel, a nationally representative probability-based panel of immigrants.

To qualify for the survey, respondents needed to specify their country of birth, and were included if they were born outside the U.S. Those born in U.S. territories including Puerto Rico did not qualify. Households in the ABS frame were invited to participate in the survey through multiple mailed, multilingual invitations, requesting that the adult in the household who had the most recent birthday complete the survey by going online, dialing a toll-free number, or returning a paper questionnaire. Interviewers also attempted calls to some telephone numbers that were matched to sampled addresses. Cases sampled through either the SSRS Opinion Panel or the SSRS/KFF Immigrants Panel additionally were asked to confirm they are the named panelist.

For the online panel components, invitations were sent to panel members by email followed by up to three reminder emails. Overall, 1,496 individuals completed the survey online, 263 completed the survey via telephone interview, and 46 completed paper questionnaires.

Incentives and data quality checks

All respondents were offered post-incentives varying in amounts of $10 to $20. The RDD live interviewer respondents received incentive via a check by mail. Those who participated online received an electronic gift card incentive by email. ABS paper respondents received a Visa gift card by mail. The online questionnaire included two questions designed to establish that respondents were paying attention. Cases that failed both attention check questions, skipped over 50% of survey questions, or participated in less than one-quarter of the mean length by mode were flagged and reviewed. Based on this criterion, 11 cases were removed.

Translation

The survey was translated by linguists at Cetra Language Solutions. To ensure accuracy of the survey program in each language, Cetra Language Solutions linguists and independent telephone interviewers reviewed each question as it appears in the program and provided feedback. The survey was revised and finalized based on this feedback.

Weighting

The combined sample was weighted to match the characteristics of the U.S. adult immigrant population, based on data from the Census Bureau’s 2023 American Community Survey (ACS). Weighting was done separately for each of the region of origin groups by sex, age, education, census region, number of adults in household, presence of children, home ownership, length of time in the U.S., and citizenship status. Some groups included other weighting parameters such as English proficiency, race/ethnicity, or relevant sub-geographies. The overall sample was also weighted to match the share of U.S. adult immigrants from each country/region of origin group The final weights take into account differences in the probability of selection for each of the five sample types. This includes adjustment for the sample design and geographic stratification, and within household probability of selection.

The margin of sampling error including the design effect for the full sample is plus or minus 3 percentage points. Numbers of respondents and margins of sampling error for key subgroups are shown in the table below. For results based on other subgroups, the margin of sampling error may be higher. Sample sizes and margins of sampling error for other subgroups are available by request. Sampling error is only one of many potential sources of error and there may be other unmeasured error in this or any other public opinion poll. KFF Public Opinion and Survey Research is a charter member of the Transparency Initiative of the American Association for Public Opinion Research.

1. KFF analysis of 2025 Current Population Survey Annual Social and Economic Supplement (CPS-ASEC). ↩︎