At the start of 2026, many issues are at play that could affect Medicaid coverage, financing, and access to care. Medicaid, which is administered by states within broad federal rules, provides comprehensive health and long-term care coverage to one in five low-income Americans. A more tenuous fiscal climate in 2026 coupled with implementation of the 2025 reconciliation law will put pressure on state Medicaid programs. While major legislative changes to Medicaid at the federal level are unlikely in 2026, key areas to watch include federal policy actions such as new regulations or guidance related to work requirements, implementation guidance for other components of the 2025 reconciliation law, and states’ policy actions in response to federal policy changes and state budget pressures.

Medicaid issues are likely to intersect with broader health care coverage and affordability debates, including the expiration of the enhanced premium tax credits for Affordable Care Act (ACA) coverage and efforts by the administration to control drug prices and hold insurance companies accountable, leading up to the mid-term elections in November 2026. At the federal level, these elections could affect the make-up of Congress and at the state level, they could affect control of state legislatures and governors’ offices. There will be 39 gubernatorial elections (18 incumbent governors running for reelection and 21 incumbent governors who are either term-limited or not seeking reelection).

Medicaid Coverage

In 2026, states will begin implementing Medicaid policy changes that are estimated to increase the number of people without health insurance by 7.5 million in 2034. Over half (5.3 million) of people newly uninsured from Medicaid changes would come from new work requirements for Medicaid enrollees in the ACA Medicaid expansion group or enrollees in partial expansion waiver programs (Georgia and Wisconsin) starting January 1, 2027. Beyond work requirements, the 2025 reconciliation law made other Medicaid eligibility changes, including pausing implementation of some provisions in two Biden-era eligibility and enrollment rules (that aimed to streamline complex processes), restricting Medicaid eligibility for certain lawfully-present immigrants, and requiring states to conduct more frequent eligibility redeterminations for ACA expansion adults.

States will need to make major policy decisions and systems upgrades, likely in advance of formal federal guidance, to be ready to implement work requirements in January 2027. Operationalizing new Medicaid work requirements will require changes to state eligibility systems and processes, enhanced data sharing infrastructure, and targeted enrollee outreach and education, all of which will demand staff resources and funding that will limit attention to other Medicaid priorities. The short timeline for making these changes means states will need to move forward with key decisions before formal guidance from the Centers for Medicare and Medicaid Services (CMS) may be available, increasing the risk that they will have to make adjustments to align with federal policy, which could increase costs. Despite these challenges, some states have indicated a desire to implement work requirements before the January 2027 deadline. To date, Nebraska is the first to announce it will begin enforcing federal work requirements early, starting May 1, 2026.

Federal immigration policies and state policy choices could have implications for Medicaid coverage in 2026. In addition to federal legislative changes, broader immigration policies, such as changes to the public charge rules, new agreements for CMS to share Medicaid data with Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE), and continued public immigration enforcement activity could result in fewer legal immigrants obtaining or maintaining Medicaid coverage. In the face of increasing fiscal pressure, several states have announced they are rolling back state-funded coverage for immigrants who are not eligible for federally-funded Medicaid, which will further limit coverage options for immigrants. States may also adopt other eligibility restrictions in an effort to reduce state costs. 

Medicaid Financing

Cuts to federal Medicaid spending will exacerbate the fiscal challenges states are experiencing because of slowing revenue growth and increasing spending demands. The 2025 reconciliation law made historic cuts to federal Medicaid financing, which are estimated to reduce federal Medicaid spending by $911 billion over 10 years. Although the most significant changes to federal Medicaid financing don’t take effect until October 2027 or later, some states will experience more immediate effects resulting from changes to federal requirements governing provider taxes. One of the most immediate effects is that states are prohibited from establishing any new provider taxes or increasing existing taxes. Historically, states have used provider taxes as a means of sustaining Medicaid funding in times of slowing revenue growth or increasing spending demands, but that tool is no longer available because of the new prohibition.

Some states may also face reductions to states’ budgeted revenues for 2026 because of more immediate changes to federal provider tax rules. This would occur in two types of cases:

• States that had adopted new provider taxes for state fiscal year (FY) 2026 may not be able to implement those taxes if they had not done so by July 4, 2025, and
• States that have implemented provider taxes with a special waiver from CMS known as a “uniformity waiver,” may need to revise their taxes as early as April 1, 2026 because of new limits on the use of such waivers (estimated to affect at least seven states including California, Illinois, Massachusetts, Michigan, Ohio, New York, and West Virginia).

To address slowing revenue growth and increasing spending demands, states may seek to restrict Medicaid provider reimbursement rates, benefits, or eligibility to reduce state Medicaid spending. For example, four states eliminated GLP-1 coverage for obesity treatment in late 2025 likely reflecting recent state budget challenges and fiscal uncertainty. While state Medicaid programs must cover nearly all drugs, a long-standing statutory exception allows states to choose whether to cover weight-loss drugs under Medicaid, resulting in limited state coverage of GLP-1s for obesity treatment. Recent governors’ budgets have included restrictions for other Medicaid benefits including dental and home care. States’ fiscal challenges in 2026 stem from factors other than the 2025 reconciliation law, but the law may exacerbate such challenges. Beyond limiting revenues in states affected by the provider tax provisions, states will need to spend more to implement the law’s requirements, most notably the new work requirements that start January 1, 2027. While the 2025 reconciliation law included some resources to implement policy changes, states may need to make additional investments in systems or workforce to comply with multiple and complex policy changes. Because states pay less than 50% of total Medicaid costs, reductions in state funding will have even larger effects on total Medicaid spending. For example, on average, states accounted for 35% of total Medicaid spending in federal fiscal year 2024. At that rate, a decrease of $100 million in state Medicaid spending would decrease total Medicaid spending by $286 million.

Recent Trump administration prescription drug initiatives could result in savings for state Medicaid programs, though questions remain about the implementation and impact of the deals. In fall 2025, the Trump administration announced reaching agreements with some drug manufacturers, including Pfizer and AstraZeneca, to provide most-favored nation (MFN) prescription drug pricing in Medicaid. MFN prices will be available to state Medicaid programs through the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model, a voluntary drug payment model through which CMS will negotiate supplemental drug rebates based on prices paid in other countries. The Trump administration also recently announced the BALANCE (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth) Model, another voluntary model that intends to expand access to obesity drugs in Medicaid and Medicare by negotiating lower GLP-1 prices with manufacturers. While lower prices for state Medicaid programs through the recently announced models could result in reduced Medicaid prescription drug spending and potentially expanded coverage of obesity drugs, how the new lower costs under the models compare to the net prices state Medicaid programs currently pay and how states or manufacturers will respond remain unclear. Due to the design of the Medicaid Drug Rebate Program (MDRP), Medicaid programs already typically pay lower prices, net of rebates, than other payers. Further, the recent announcements will not impact costs for Medicaid enrollees as they already pay little or no copays for prescription drugs.

Medicaid Access to Care

State decisions to restrict provider reimbursement rates or benefits in response to federal Medicaid spending cuts could limit access to care for some Medicaid enrollees in 2026. Changes to Medicaid financing will make it difficult for states to increase payment rates to providers and may create pressure for states to restrict payment rates. Reduced or stagnant payment rates to providers coupled with rising costs and increases in the number of people who are uninsured (from Medicaid and Marketplace coverage changes) could pressure providers to reduce staff, services or potentially close. Some providers already struggling financially, such as rural hospitals or hospitals serving a high share of Medicaid enrollees, could face more challenges. An influx of funding from the Rural Health Transformation Program may help to mitigate some challenges in the near term, but those funds are temporary and not expected offset the full magnitude of Medicaid funding cuts over the next ten years. Restricting Medicaid coverage of “optional” services (like behavioral health or home care) could result in less access to care for people with complex health conditions. This may be particularly likely for home care services, where existing tools for managing spending such as caps on total spending or enrollment make it easier for states to limit spending in the future.

The administration may shape Medicaid access through actions to curtail or approve new Section 1115 Medicaid demonstration waivers. Such waivers allow states an avenue to test new approaches in Medicaid if the Department of Health and Human Services (HHS) Secretary determines the waiver is likely to “promote the objectives of the Medicaid program.” Waiver priorities may shift from one presidential administration to another. For example, the Trump administration has rescinded Biden-era 1115 waiver guidance on covering health-related social needs (HRSN) services, indicated plans to phase out certain waiver financing tools (related to use of “Designated State Health Programs” (DSHP), notified states that it does not anticipate approving or extending waivers with continuous eligibility provisions for children and adults or workforce initiatives. While the Trump administration has indicated the phase out or rescission of certain Biden-era waiver policies, the administration has not provided details about its priorities for the use of 1115 waivers. The 2025 reconciliation law included a new provision that requires the Chief Actuary at CMS to certify that 1115 waivers are not expected to result in an increase in federal expenditures compared to federal expenditures without the waiver. While “budget-neutrality” for waivers has been required under long-standing policy and practice, typically the calculations are determined on a per enrollee basis over the course of the waiver and are negotiated between states and the administration.

Workforce challenges tied to reimbursement rate policies and changes in immigration policy could also exacerbate access challenges. KFF survey data finds that 13% of immigrants have avoided going to work since January 2025 because of concerns about drawing attention to someone’s immigration status, a number which rises to 40% among people who are likely to be undocumented immigrants. Such concerns are most significant for the long-term care workforce because Medicaid is the dominant payer for care and more than one in four long-term care workers are immigrants. Beyond long-term care, immigrants constitute a large share of workers in other health care fields, including over one in four physicians in US hospitals.

What to Watch

The issues identified in this policy watch could have major implications for Medicaid coverage, financing, and access to care. Key questions for each of these areas will be important to monitor as debates evolve leading up to the mid-term elections, which will have significant implications for Medicaid and health policy in general in the years ahead.

Medicaid coverage changes:

• How will federal guidance shape implementation of work requirements and other eligibility changes in the reconciliation law?
• How will states implement Medicaid work requirements? How many states will implement work requirements ahead of the January 2027 deadline? Will any states be granted good faith waivers to delay implementation?
• Will states adopt additional eligibility restrictions in budgets for FY 2027?
• How will aggregate and state enrollment trends evolve during 2026?

Medicaid financing changes:

• How will federal Medicaid financing changes affect state budgets and provider rates in 2026?
• How will state financing challenges affect the development of their FY 2027 budgets?
• Will states be able to offset reduced federal funding with state funding or will states adopt policies to restrict Medicaid? What policies will states adopt to reduce state Medicaid spending?
• Will states be able to sustain recent increases in provider rates or expansions in services, particularly for long-term care and behavioral health?

Medicaid access changes:

• How will broader changes in Medicaid coverage affect access to care?
• How will changes in Medicaid 1115 waiver policy affect access to care?
• Will changes in financing result in hospital or other provider closures and what will that mean for access to care? Will funding for providers from the rural health transformation fund offset restrictions from other federal and state policies?
• How will broader immigration policies affect the long-term care workforce and access to services that are predominantly funded by Medicaid?

As states begin budget debates for state fiscal year (FY) 2027, many states are facing a more tenuous fiscal climate. Slowing revenue growth and heightened spending demands coupled with anticipated federal Medicaid cuts under the 2025 reconciliation law, changes to the Affordable Care Act (ACA) enhanced Marketplace subsidies, and economic changes are contributing to tighter budget conditions and fiscal uncertainty for states. Medicaid is often central to state fiscal decisions as it is simultaneously a significant spending item as well as the largest source of federal revenues for states.

States projected Medicaid enrollment to remain flat for FY 2026 in KFF’s 2025 budget survey of Medicaid officials and total Medicaid spending was expected to increase 7.9%, though there was substantial variation across states. States reported a variety of cost pressures including provider and managed care rate increases, greater enrollee health care needs, and increasing costs for long-term care, pharmacy benefits, and behavioral health services. Some states have already implemented Medicaid spending cuts to address recent budget challenges, and others may follow as they contend with budget gaps and prepare for the implementation of the Medicaid changes in the 2025 reconciliation law.

Now in January 2026, halfway through FY 2026, governors are beginning to release proposed budgets for state legislatures to consider for FY 2027. Most states will be adopting FY 2027 budgets this year and another 16 states enacted biennial budgets last year, though some of these states may adopt a supplemental budget for FY 2027. The state budget cycle in most states runs from July to June, and governors typically release their budget proposals early in the calendar year followed by a convening of the legislature to finalize and enact a budget. While most states have not yet released budget proposals, implementation of the 2025 reconciliation law will put pressure on state Medicaid programs and states such as Colorado and Idaho have already announced Medicaid cuts. Medicaid issues are also likely to intersect with broader health care coverage and affordability debates leading up to the mid-term elections in November 2026. There will be 39 gubernatorial elections (18 incumbent governors running for reelection and 21 incumbent governors who are either term-limited or not seeking reelection) and control of state legislative bodies could also be affected. This brief describes current state fiscal conditions as states begin FY 2027 budget debates and highlights key areas to watch for Medicaid policy changes as states respond to fiscal challenges and the 2025 reconciliation law. 

State Fiscal Pressures

States are facing a more tenuous fiscal climate as they prepare for FY 2027 budget debates. In recent years, tax cuts combined with changes in inflation and consumer consumption patterns has led to slowing state revenue growth following a period of record-breaking revenue and expenditure growth for states after the initial pandemic-induced economic downturn (Figure 1). General fund spending has also slowed, and data show state rainy day fund capacity is also beginning to decline following all-time highs (though funds remain stronger than before the pandemic). States are also contending with increasing spending demands from Medicaid, employee health care, education, housing, and disaster response, though state fiscal conditions vary widely across states. Due to tightening budget conditions, some states have begun implementing more budget management strategies, like spending cuts or other cost containment measures.

Recent federal actions, including the passage of the 2025 reconciliation law, may intensify state budget pressures for FY 2027. States are preparing for significant policy changes and federal funding cuts in the 2025 reconciliation law, including tax code changes as well as Medicaid and SNAP cuts. The new law is expected to reduce federal Medicaid spending by $911 billion (or 14%) over the next decade, though the impact varies by state. States may offset some of the reductions with state funds, though the challenging fiscal climate and the magnitude of federal funding cuts in the new law may make it difficult. For example, states may consider filling in funding gaps created by losses in federal funding for Planned Parenthood or providing state funded coverage for lawfully present immigrants who lose health coverage due to new eligibility restrictions. Some states are also moving to subsidize ACA Marketplace premiums with state funds following the expiration of the enhanced subsidies. The expiration of the enhanced subsidies as well as federal workforce cuts, tariff changes, and shifts in economic conditions contribute to heightened fiscal uncertainty for states. While not expected to offset rural hospitals’ losses under the reconciliation law and funding amounts will vary, states will be receiving additional federal funding through a new rural health fund. Given state budget challenges and fiscal uncertainty, at least 14 states, including Arizona, California, Colorado, Delaware, Maryland, New Mexico, and Rhode Island, have already forecasted budget gaps for FY 2027.

State Medicaid Changes

In response to mounting state budget pressures and the passage of the 2025 reconciliation law, FY 2027 state budget debates may include efforts to reduce Medicaid spending. Even though many provisions of the reconciliation law do not take effect immediately, a few states have already implemented Medicaid spending cuts for FY 2026 and, heading into the FY 2027 budget cycle, states may continue to propose Medicaid policy changes in key areas (Figure 2). This brief includes Medicaid changes from recently announced governors’ budget proposals, though most states have not yet released detailed budget proposals yet. The state budget landscape will likely continue to evolve as revenue forecasts and spending demands become clearer and as more states release their budgets. Given the timing and disparate impact of the reconciliation law across states as well as variation in state fiscal conditions, FY 2027 Medicaid policy changes will vary by state and some Medicaid cuts may not begin until FY 2028 or later.

Figure 2

Provider Rates

States have substantial flexibility to establish Medicaid provider reimbursement methodologies and amounts, especially within a fee-for-service (FFS) delivery system where a state Medicaid agency pays providers or groups of providers directly. Historically, during times of weak state revenue collections, states have typically turned to provider rate restrictions to contain costs. KFF’s 2025 Medicaid budget survey found that adopted FY 2026 budgets included more rate increases than cuts, but there was a notable uptick in states reporting provider rate restrictions compared to previous years. Some notable restrictions in FY 2026 included 4% across the board reductions for all provider types and services in Idaho, and a reversal of 1.6% across the board provider rate increases to address budget shortfalls in Colorado.

State budget pressures and the 2025 reconciliation law may result in additional rate cuts in FY 2027 budgets. While the 2025 reconciliation law did not directly make changes to how states set provider rates, the law imposes new limits on managed care state-directed payments for inpatient hospital and nursing facility services and new restrictions on states’ ability to generate Medicaid provider tax revenue. Some provider tax provisions in the new law have already been implemented, and some states may be anticipating the effect of future provider tax limits that will be phased on over time, which could exacerbate state budget challenges and result in reimbursement rate cuts. Some early FY 2027 governors’ budget proposals include provider rate restrictions: Colorado proposed reducing Medicaid provider rates to 85% of Medicare rates, along with rate reductions for certain home health, dental, behavioral health, and other services, and Idaho proposed extending their 4% provider rate reductions. Texas has also proposed reimbursement rate reductions for FY 2027 for substance use treatment facilities and durable medical equipment. North Carolina has not yet passed their biennial budget for FY 2026 and FY 2027; while this stalemate resulted in rate cuts that were eventually restored in FY 2026, the legislature may consider additional cuts as they finalize their budget.  

Benefits

State Medicaid programs must cover a comprehensive set of “mandatory” benefits, including items and services typically excluded from traditional insurance, but may also cover a broad range of optional benefits. For example, all states cover prescription drugs as an optional benefit, and most states cover other optional services such as physical therapy, eyeglasses, and adult dental care. KFF’s 2025 Medicaid budget survey found that benefit expansions continued to far outweighed benefit restrictions and limitations in FY 2026 (consistent with prior survey years), particularly for behavioral health. However, some states had plans to restrict coverage of GLP-1s for obesity treatment, including California, New Hampshire, Pennsylvania, and South Carolina, which all eliminated coverage of GLP-1s for obesity treatment in January 2026, likely reflecting recent state budget challenges and fiscal uncertainty.

As states enter FY 2027 budget debates, it may be challenging to sustain recent benefit expansions and states may face increased pressure to cut or limit optional benefits. While the 2025 reconciliation law does not directly change Medicaid benefits, states may have to cut or limit optional benefits to offset federal funding cuts in the new law or respond to existing budget challenges. Colorado’s recently released governor’s budget proposal for FY 2027 includes capping dental benefits, and Rhode Island’s Medicaid program FY 2027 budget proposal considers ending GLP-1 coverage. Idaho governor’s budget proposal includes suggested cuts to dental, pharmacy, and various medical service benefits.

Home Care             

Medicaid pays for almost 70% of all home care spending in the U.S., and most Medicaid home care is provided through optional services, giving states flexibility to manage costs. Most states use various mechanisms to limit home care spending under waiver programs, including caps on enrollment, total spending, and per-participant costs, as well as restrictions on specific services like personal care. Nearly a third of states reported planning to adopt new strategies in FY 2026 to contain home care costs, according to data from KFF’s 2025 survey of officials administering Medicaid home care programs.

State budget challenges and federal funding cuts in the 2025 reconciliation law could result in additional pressure to reduce optional home care services in FY 2027 budgets. The 2025 reconciliation law does not directly change home care benefits, but significant Medicaid spending on home care and the availability of mechanisms for limiting such spending could spur states to make home care cuts. When faced with fiscal pressures in the past, all states reduced spending on home care by either serving fewer people (40 states) and/or by cutting benefits or payment rates for long-term care providers (47 states). Recently released governors’ budget proposals from Colorado and Idaho include suggested cuts to home care services, although specifics of these proposals are not available and may evolve during the legislative process.

Eligibility and Work Requirements

Since the pandemic, many states have expanded Medicaid eligibility or taken steps to remove administrative barriers to enrollment for certain groups. States have also built on post-pandemic unwinding strategies to automate eligibility and renewal processes, improve communication with members, and reduce administrative barriers. However, in FY 2026, some states reduced Medicaid spending through eligibility restrictions, reflecting tighter budget conditions. As of January 2026, California reinstated asset limits for Medi-Cal eligibility for long-term care benefits for adults 65 and older or with a disability, and D.C. reduced Medicaid income limits to 138% of the federal poverty limit for certain enrollees. Some states have also rolled back state-funded health coverage programs that expand coverage to immigrants regardless of status. In addition, KFF’s 2025 Medicaid budget survey found that a few states planned to cancel or postpone one or more projects or initiatives due to uncertainty at the federal level, including federal waiver policy changes such as pre-release coverage for individuals who are incarcerated or continuous enrollment for children.

Upcoming FY 2027 budget debates may consider Medicaid eligibility restrictions to address state budget challenges. States will also begin the implementation of the 2025 reconciliation law’s Medicaid eligibility policy changes, including pausing implementation of some provisions in the Biden-era Eligibility and Enrollment Final Rule (that aimed to streamline complex processes), restricting Medicaid eligibility for certain immigrants, conducting more frequent eligibility redeterminations for ACA expansion adults, and imposing Medicaid work requirements for ACA expansion adults. Operationalizing these new policies will require significant changes to state eligibility systems and processes, which may displace staff, funding, and resources from implementing other Medicaid priorities. Increased costs associated with implementing the changes in addition to state budget pressures and federal funding cuts could mean more states consider restricting coverage of optional eligibility groups. For example, Idaho’s legislature has signaled that it may consider repealing the Medicaid expansion to address budget shortfalls.

The implementation of Medicaid work requirements may have a significant impact on state Medicaid program budgets and systems capacity in FY 2027. The 2025 reconciliation law requires states to implement work requirements for individuals enrolled through the ACA Medicaid expansion pathway or certain state waivers beginning January 1, 2027 (with the option for states to implement requirements earlier). The Congressional Budget Office (CBO) estimates that this requirement will have the largest effect on spending and coverage compared to other provisions, reducing federal Medicaid spending by $326 billion over ten years and resulting in 5.3 million more people who are uninsured. In KFF’s 2025 Medicaid budget survey, states reported a number of implementation challenges including the significant eligibility systems changes needed, the short timeframe, staff capacity concerns, and issues for applicants and enrollees. States also reported fiscal challenges tied to systems changes, hiring additional staff, and conducting outreach to enrollees. Even with implementation funds and federal matching payments for administrative costs, some states cited the increased costs of implementing work requirements on a short timeline as a concern, which may factor into FY 2027 budget debates. For example, among recently released FY 2027 governors’ proposed budgets, Utah includes $16.5 million, Colorado includes over $50 million, Kentucky includes $35.6 million, and Wyoming includes $7.4 million in funding for the new law’s Medicaid eligibility redetermination changes. In addition, some states are planning to move forward with work requirements before the federal deadline, which could have additional implications for state budgets. To date, Nebraska is the first state to announce it will implement early, starting May 1, 2026.

This chart collection explores National Health Expenditure (NHE) data from the Centers for Medicare and Medicaid Services (CMS), including the latest data from 2024. These data offer insights into changes in health spending over time in the U.S., as well as the driving forces behind spending growth. A related interactive tool contains more of the latest NHE data.

The slideshow is part of the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

In anticipation of federal changes to vaccine policy by the Trump administration, last year, some states began to de-couple their own vaccine recommendations from the federal government. This marked a departure from prior practice where, historically, states typically relied on Centers for Disease Control and Prevention (CDC) and its Advisory Committee on Immunization Practices (ACIP) for such recommendations.  Starting in May of last year, HHS Secretary Kennedy and the CDC/ACIP began to make changes to the federal vaccine schedule for children, culminating in an announcement on January 5 of this year with the most wide-ranging changes to date (see Table 1). Collectively, these changes have resulted in reducing the number of diseases targeted from 17 to 11 and the number of routine vaccines from 13 to 7. As part of these changes, six vaccines are no longer recommended for routine use by all children in the United States.

This policy brief tracks the number of states that have announced they are no longer following federal government recommendations for childhood vaccines as of January 20, 2026, updating an analysis from September of last year (while the current analysis focuses on state sources for childhood vaccine recommendations, our earlier analysis also looked at state actions regarding insurance coverage requirements and pharmacist administration).  Overall, the number of states that have taken such an action has increased significantly since last September, with a majority of states (28) now departing from federal guidelines for some or all childhood vaccines compared to 22 states in September of last year (see Table 2). Moreover, the number of states decoupling their vaccine recommendations for all childhood vaccines has risen from just nine in September to 25. The red-blue divide across the country continues to grow, with all blue states¹ (those with Democratic governors) having announced that they will no longer follow federal guidelines, though four states with Republican governors have also done so.

Findings

As of January 20, 2026, the majority of states (28 states, including DC) have announced that they will not follow the new CDC childhood vaccine recommendations for at least some childhood vaccines, instead relying on prior recommendations, state recommendations, and/or those of external entities. Most of these states have indicated that they will follow the recommendations of the independent medical association, the American Academy of Pediatrics (AAP). Among these are two inter-state public health alliances which previously formed to develop shared recommendations and have reaffirmed their intent to follow AAP guidelines: the West Coast Health Alliance, which includes California, Hawaii, Oregon, and Washington, and the Northeast Public Health Collaborative, which includes ten states and New York City.

Almost all of these states (25 of 28) have announced that they will do so for all childhood vaccines. Most of these states are choosing to follow non-federal guidelines for all childhood vaccines. The three states that are more limited are Alaska and Mississippi, which announced that they would continue to recommend the Hepatitis B vaccine at birth for all infants, even those whose mothers test negative (no longer recommended as routine by the CDC), and Arizona, which has announced that it will continue to recommend Hepatitis B at birth and COVID-19 vaccines consistent with guidelines from external entities.

This marks a significant increase since September when only nine states had announced that they would not follow CDC/ACIP vaccine recommendations for all childhood vaccines (some also did so for adults). In September, most states that had announced changes did so for COVID-19 only (13), which at that time, was the only vaccine for which changes had been made by the federal government (removing the routine vaccination recommendation generally, including for children). With the changing recommendation regarding Hepatitis B vaccine in December of 2025 and additional vaccines in early January 2026, many more states have expanded this scope to include all childhood vaccines.

The red-blue divide in vaccine policy continues with all blue states (those with Democratic governors) departing from federal guidelines. As in September, there is a significant political divide in vaccine policies across the country, which is even sharper today. While all blue states have departed from federal recommendations (one exception is Virginia which just swore in a new Democratic Governor this week and may choose to change their position regarding vaccine recommendations soon), four states with Republican governors have also done so for at least some childhood vaccines (Alaska, Mississippi, New Hampshire, and Vermont). This divide in state policy mirrors a growing divide in public opinion).

Looking ahead, it is possible other states will join this group and de-couple their own childhood vaccine recommendations from the federal government. Regardless of future state decisions, the current landscape – with diverging recommendations from the federal government, many states, and physician organizations — represents a challenging one for parents and providers to navigate, which could dampen already falling vaccination rates.  Moreover, much of this divide is likely to play out in the next school season, when states have to decide whether and how to translate their vaccine recommendations into school attendance requirements or revise existing exemption allowances.  

Sources:

Alaska: https://alaskapublic.org/news/health/2025-12-30/alaska-sticks-with-universal-hepatitis-b-vaccine-despite-federal-update; Bill introduced: https://www.akleg.gov/basis/Bill/Detail/34?Root=HB%20238

Arizona: https://directorsblog.health.azdhs.gov/newborns-receive-hepatitis-b-vaccine-at-birth-for-good-reason/

California: https://www.cdph.ca.gov/Programs/OPA/Pages/NR26-001.aspx

Colorado: https://cdphe.colorado.gov/press-release/colorado-reaffirms-evidence-based-vaccine-guidance-and-continued-access-for-families

Connecticut: https://www.health.ny.gov/press/releases/2026/2026-01-12_pediatrics_vaccine_schedule.htm

Delaware: https://www.health.ny.gov/press/releases/2026/2026-01-12_pediatrics_vaccine_schedule.htm

District of Columbia: https://dchealth.dc.gov/release/dc-health-responds-cdc%E2%80%99s-decision-reduce-childhood-vaccines

Hawaii: https://www.cdph.ca.gov/Programs/OPA/Pages/NR26-001.aspx

Illinois: https://x.com/IDPH/status/2008590092475252895?s=20

Kansas: https://www.kdhe.ks.gov/m/newsflash/home/detail/1839

Kentucky: https://kyperf.sharepoint.com/sites/KPhA/Shared%20Documents/Forms/AllItems.aspx?id=%2Fsites%2FKPhA%2FShared%20Documents%2FMarketing%2FKPhA%20Website%20and%20Blog%2FKDPH%20Letters%2FKDPH%5FVaccine%20Recommendation%20Letter%5F1%2E7%2E25%2Epdf&parent=%2Fsites%2FKPhA%2FShared%20Documents%2FMarketing%2FKPhA%20Website%20and%20Blog%2FKDPH%20Letters&p=true&ga=1

Maine: https://www.maine.gov/dhhs/mecdc/health-professionals/health-advisory-notices/maine-childhood-immunization-recommendations-wed

Maryland: https://health.maryland.gov/newsroom/Pages/Statement-from-Secretary-Seshamani-on-childhood-vaccine-schedule-.aspx

Massachusetts: https://www.mass.gov/news/governor-healey-condemns-cdc-rollback-of-childhood-vaccine-recommendations

Michigan: https://www.michigan.gov/mdhhs/inside-mdhhs/newsroom/2026/01/06/vaccines-state

Minnesota: https://www.health.state.mn.us/news/pressrel/2026/immuniz010826.html

Mississippi: https://msdh.ms.gov/msdhsite/_static/resources/21461.pdf

New Hampshire: https://www.dhhs.nh.gov/sites/g/files/ehbemt476/files/documents2/han-child-immunization-schedule.pdf

New Jersey: https://www.nj.gov/health/news/2026/approved/20260112a.shtml

New Mexico: https://www.nmhealth.org/news/awareness/2026/1/?view=2309

New York: https://www.health.ny.gov/press/releases/2026/2026-01-12_pediatrics_vaccine_schedule.htm

North Carolina: https://www.ncdhhs.gov/blog/2026/01/08/ncdhhs-hosts-media-availability-discuss-importance-vaccines-and-address-recent-public-health

Oregon: https://www.cdph.ca.gov/Programs/OPA/Pages/NR26-001.aspx

Pennsylvania: https://www.pa.gov/agencies/health/newsroom/federal-changes-do-not-impact-vaccine-access–recommendations

Rhode Island: https://www.ri.gov/press/view/50302

Vermont: https://www.healthvermont.gov/disease-control/immunizations/recommended-vaccines-children-and-teens; https://www.health.ny.gov/press/releases/2026/2026-01-12_pediatrics_vaccine_schedule.htm

Washington: https://www.cdph.ca.gov/Programs/OPA/Pages/NR26-001.aspx

Wisconsin: https://www.dhs.wisconsin.gov/dph/memos/communicable-diseases/bcd-2026-01.pdf

1. One exception is Virginia, which just swore in a new Democratic Governor on January 17th and may choose to change their position regarding vaccine recommendations soon. ↩︎

GLP-1 (glucagon-like peptide-1) drugs were originally developed to help people with type 2 diabetes manage blood sugar levels but have gained widespread attention for their effectiveness as a treatment for obesity. Due to their cost, however, coverage of GLP-1s for obesity treatment in Medicaid, ACA Marketplace plans, and most large employer firms remains limited, and GLP-1 coverage in Medicare for treatment of obesity is prohibited under current law. While state Medicaid programs must cover nearly all Food and Drug Administration (FDA) approved drugs, a long-standing statutory exception allows states to choose whether to cover weight-loss drugs under Medicaid. As a result, Medicaid coverage of GLP-1 drugs for obesity treatment is optional for states, while coverage for other indications (diabetes, cardiovascular disease, and sleep apnea) is required.

The upfront costs of GLP-1s are an ongoing concern for both public and private payers, and some employers and state Medicaid programs are now restricting coverage, despite recognizing their effectiveness at treating obesity. Expanded obesity drug coverage can increase Medicaid spending and put pressure on overall state budgets, and states are now facing tighter budget conditions and longer-term fiscal uncertainty, due in part to the federal Medicaid cuts in the 2025 reconciliation law, causing state Medicaid programs to re-evaluate their obesity drug coverage. However, almost four in ten adults and a quarter of children with Medicaid have obesity, meaning expanding Medicaid coverage of these drugs could provide access to effective obesity treatments for millions. In the longer term, reduced obesity rates among Medicaid enrollees could also result in reduced Medicaid spending on chronic diseases associated with obesity, though the evidence is mixed. Any savings on health spending because of obesity drugs may take many years and may not accrue to the Medicaid program if individuals experience shifts in coverage, so states may not be factoring long-term savings into coverage decisions.

At the federal level, the Trump administration decided not to proceed with a Biden administration proposal to allow Medicare and require Medicaid to cover obesity drugs but recently launched their own obesity drug coverage initiatives to reduce costs and increase access (see Box 1). While lower prices for state Medicaid programs could help alleviate cost concerns for states and result in expanded coverage of obesity drugs, how the new lower costs compare to the net prices state Medicaid programs currently pay and how states will respond amid tightening budget conditions remain unclear. Further, the recent announcements will not impact costs for Medicaid enrollees as they already pay little or no copays for prescription drugs, and the costs of purchasing drugs directly from manufacturers through TrumpRx will likely still be prohibitive for people on Medicaid who must have a low income to qualify for the program. Unless Medicaid covers obesity medications, enrollees are unlikely to have access to them given the high out-of-pocket cost even at lower prices. 

This brief discusses the current landscape of Medicaid GLP-1 coverage and examines recent trends in Medicaid prescriptions and gross spending on GLP-1s. Key takeaways include:

• Obesity drug coverage in Medicaid remains limited, with 13 state Medicaid programs covering GLP-1s for obesity treatment under fee-for-service (FFS) as of January 2026.
• The number of Medicaid prescriptions and gross spending on GLP-1s have both increased substantially since 2019.
• Increased utilization of Ozempic and Wegovy (semaglutide) as well as Mounjaro and Zepbound (tirzepatide) have contributed substantially to recent growth.

Does Medicaid cover GLP-1s for obesity treatment?

States can decide whether to cover obesity drugs under Medicaid. Under the Medicaid Drug Rebate Program, Medicaid programs must cover nearly all of a participating manufacturer’s FDA-approved drugs for medically accepted indications. However, weight-loss drugs are included in a small group of drugs that can be excluded from coverage¹ (though the statutory exception refers to agents used for “weight loss”, “obesity drugs” is used to refer to this group of medications in this analysis). As a result, coverage of GLP-1 drugs for the treatment of obesity remains optional for states, while coverage is required for drugs approved for the treatment of diabetes and, since March 2024 and December 2024, for the treatment of cardiovascular disease (Wegovy) and moderate to severe obstructive sleep apnea in adults with obesity (Zepbound), respectively (Table 1). Coverage is also required if deemed medically necessary for children under Medicaid’s Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit.

Obesity drug coverage in Medicaid remains limited, with 13 state Medicaid programs covering GLP-1s for obesity treatment under FFS as of January 2026 (Figure 1). When covered, GLP-1s are typically subject to utilization controls such as prior authorization, which can further limit access. Notably, KFF’s 2025 Medicaid budget survey found 16 state Medicaid programs covered GLP-1s for obesity treatment as of October 2025; however, since then, four states (California, New Hampshire, Pennsylvania, and South Carolina) have eliminated coverage of GLP-1s for obesity treatment, likely reflecting recent state budget challenges and the significant costs associated with coverage. North Carolina eliminated GLP-1 coverage beginning October 2025 due to a budget stalemate in the legislature, but coverage was reinstated in December 2025, bringing the total number of states covering GLP-1s for obesity to 13 as of January 2026. A few other states are planning or considering obesity drug restrictions in state fiscal year 2026 or 2027, and state interest in expanding coverage of obesity drugs is also waning according to this year’s survey, with states continuing to report cost as the key factor contributing to obesity drug coverage decisions. The state obesity drug coverage landscape will continue to evolve as states respond to the recent announcement of the BALANCE model (see Box 1) and as states contend with budget challenges and the federal Medicaid spending cuts in the 2025 reconciliation law.

How have Medicaid prescriptions and gross spending on GLP-1s changed in recent years?

The number of Medicaid prescriptions and gross spending on GLP-1s have increased substantially since 2019 (Figure 2). Not all GLP-1s are approved for obesity treatment, and this analysis includes all FDA-approved GLP-1s, including those approved for obesity (Saxenda, Weogvy, Zepbound) as well as those approved for type 2 diabetes (see Table 1). Overall, the number of GLP-1 prescriptions increased sevenfold, from about 1 million in 2019 to over 8 million in 2024. At the same time, gross spending increased ninefold, from about $1 billion in 2019 to almost $9 billion in 2024, and gross spending per GLP-1 prescription reached $1,000 in 2024. Preliminary trends through June 2025 (data not shown) show rapid growth will continue in 2025. Those prices and spending numbers do not account for rebates, and states typically receive substantial rebates on brand drugs. In response to growing criticism of the cost of their drugs, Novo Nordisk, the company that manufactures Ozempic and Wegovy, reported last year that rebates and other fees (across all payers) accounted for about 40% of the cost of the two drugs and that they expected rebates to grow. GLP-1s still account for a relatively small share of the total number of Medicaid prescriptions, accounting for about 1% of all Medicaid prescriptions in 2024 (up from about 0% in 2019). However, GLP-1s accounted for over 8% of all Medicaid prescription drug spending before rebates in 2024 (up from 1% in 2019).

Specifically, increased utilization of Ozempic and Wegovy (semaglutide) as well as Mounjaro and Zepbound (tirzepatide) have contributed substantially to recent growth. Prescriptions and spending on Ozempic, approved for type 2 diabetes (not obesity) in 2017, have grown considerably over the period. By 2024, Ozempic had surpassed Trulicity, also approved for type 2 diabetes (not obesity) to make up the largest share of GLP-1 prescriptions and spending (39% in 2024). Looking from 2023 to 2024, the latest year of data available, prescriptions and gross spending for Wegovy (first approved for obesity in 2021, approved for cardiovascular disease in 2024) and Mounjaro (approved for type 2 diabetes in 2022) more than doubled, and prescriptions and gross spending for Zepbound (first approved for obesity in 2023, approved for sleep apnea in 2024) increased more than fivefold. These drugs are produced by Novo Nordisk and Eli Lilly, which both recently announced agreements with the Trump administration to lower prices. From Medicaid data publicly available, there is no way yet to disentangle how much of the growing use of GLP-1s is related to treatment for diabetes, cardiovascular disease, or sleep apnea versus obesity, or a combination.

1. Drugs that may be excluded from coverage under the MDRP include drugs used for: a) anorexia, weight loss, or weight gain, b) promoting fertility, c) cosmetic purposes or hair growth, d) symptomatic relief of cough and colds, e) prescription vitamins and mineral products except prenatal vitamins and fluoride preparations , f) nonprescription drugs, g) a manufacturer’s covered outpatient drug in which tests and monitoring services have to be purchased from that manufacturer, h) sexual or erectile dysfunction unless used to treat a condition. For more information see, 42 U.S.C. § 1396r-8.  ↩︎

Introduction

The Trump Administration has taken action to share Medicaid data provided by states to the Centers for Medicare and Medicaid Services (CMS) with the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) for immigration enforcement purposes. This action represents a reversal in prior policy that asserted CMS would not share such information and ICE would not use such information for immigration enforcement purposes, including assurances made to the public, applicants and enrollees, health care providers, and states that information collected to determine eligibility for health coverage programs would not be used for immigration enforcement.

This issue brief provides an overview of a new data sharing agreement for CMS to share Medicaid data with ICE and its potential implications. This sharp departure in policy to allow sharing of Medicaid enrollee data with ICE for immigration enforcement raises several key issues:

• Data limitations may make it difficult for CMS to comply with a current court order to share data only for individuals who are not lawfully present for the 22 plaintiff states challenging the data sharing. Under pending litigation, CMS is prohibited from sharing certain information from the plaintiff states, including information for lawfully present individuals or citizens. If the data available to CMS are similar to the data researchers have access to, it is not possible to isolate immigrants who are not lawfully present in the dataset that will be shared with ICE.
• Going forward, the sharing of Medicaid enrollee data with ICE will likely make immigrant families, including citizen children in those families, more reluctant to access health coverage and care and other programs and services. The policy exacerbates already heightened fears among immigrant families due to increased immigration enforcement activity overall. Even prior to the public notice of the new data sharing policy, the KFF/New York Times 2025 Survey of Immigrants found that about half (51%) of immigrant adults were “very concerned” or “somewhat concerned” that health officials or health care providers may share their information with ICE or U.S. Customs and Border Protection (CBP).
• The data sharing raises broader questions and concerns about data privacy and protections, which may extend beyond immigrant families. Individuals enrolled in Medicaid did so under prior assurances that information would not be shared for immigration enforcement purposes. Applying new policy retroactively to people who took actions under previous policy and safeguards may broadly increase concerns about privacy and safeguards of data. Health care providers, including community health centers and hospitals, may also have growing concerns about potentially being required to share patient information.

What Medicaid data do states report to CMS?

Medicaid is jointly administered by the federal government and states, and states must share certain information with CMS for program administration. State Medicaid agencies collect and maintain personal and health information for applicants and enrollees to determine eligibility and provide care. Undocumented immigrants are not eligible for Medicaid or other federally-funded coverage, but payments for emergency services may be made to hospitals on behalf of individuals who are otherwise eligible for Medicaid but for their immigration status. States include information about these payments in their reports to CMS. Some states provide health coverage to some immigrants regardless of immigration status using state-only funds. However, states are not required to submit this state-only program information to CMS. States cannot require applicants to provide citizenship or immigration status for any family or household members not applying for coverage.

Under the data sharing agreement, CMS will be sharing data from the Transformed Medicaid Statistical Information System or T-MSIS with ICE, which provides robust information on Medicaid enrollees but is significantly lagged. T-MSIS data also are made available to researchers, providing insight into what data it includes. The data available to researchers are generally almost two years old (e.g., calendar year 2024 data are available in 2026) and include demographic and eligibility files with information on age, gender, race and ethnicity, Medicaid eligibility, Medicaid enrollment, and coverage through Medicaid managed care. There are also claims files that include claims for all services covered by the states, premium payments from the states to managed care plans, and records of services used by managed care enrollees. In some cases, states provide more data to the federal government than are made available to researchers such as KFF. It is likely that CMS has access to more timely data too, but it is unknown how timely those data are and the extent to which timeliness varies across the states.

In the T-MSIS data available to researchers, there are a few types of information related to immigration status, but no indicator that allows for separate identification of immigrants who are undocumented. Specifically, T-MSIS includes the following data elements:

• Immigration status, which indicates whether a person is one of the following:
  • “A qualified alien,” which is a specific subset of noncitizens with lawful immigration status, such as lawful permanent residents (LPRs or “green card” holders), who may be eligible for Medicaid and CHIP and certain other federal programs. Many must wait five years after obtaining qualified status before they may enroll in coverage.
  • “Lawfully present under CHIPRA 214,” which includes lawfully residing pregnant people and children in states that have taken up the option to eliminate the five-year wait to enroll in coverage for eligible immigrants with qualified status and extend coverage to lawfully present pregnant people and/or children beyond those with a qualified status.
  • “Eligible only for payment of emergency Medicaid services,” which includes individuals who would otherwise be eligible for Medicaid but for their immigration status. This group includes undocumented immigrants, noncitizen immigrants with a qualified status who are in the five-year waiting period for coverage, and lawfully present immigrants without a qualified status.
  • “A U.S. citizen or U.S. national.”
• Whether or not the enrollee’s immigration status has been verified, and
• The date on which the five-year waiting period for receiving Medicaid and other federally funded benefits ends.

Undocumented immigrants are included in the population that is “eligible for payment of emergency Medicaid services,” but that group also includes some groups of lawfully present immigrants, and the dataset available to researchers does not separately identify these groups within that population. Additionally, because of the data lag, immigration status may have changed for some people since the data were collected.

What actions has the Trump Administration taken to share Medicaid enrollee data?

In July 2025, CMS and ICE established an Information Exchange Agreement that enables immigration enforcement officials to access the personal data of millions of Medicaid enrollees. A news organization made the agreement public in January 2026, after it was released as part of a lawsuit several states brought against the Department of Health and Human Services and DHS. Under the agreement, CMS will provide ICE, “access to the CMS Integrated Data Repository to retrieve information concerning the identify and location of aliens in the United States.” The agreement indicates this information will allow ICE to, “receive information concerning the identity and location of aliens in the United States, such as address, telephone number, banking information (routing number, account type, account number), email address, internet protocol (IP) addresses and other information relevant to identifying and locating aliens in the United States.”  

The agreement specifies that CMS will provide direct access to the T-MSIS to a select set of ICE employees for renewable two-month periods, and that ICE employees will access the T-MSIS to receive information concerning the identification and location of aliens in the U.S. It identifies Medicaid recipients’ name, address, Medicaid identification number, social security number, date of birth, sex, phone number, locality, ethnicity and race as the data elements to be shared. The agreement does not specify whether ICE access to Medicaid data is limited to a certain subset of Medicaid enrollees, such as noncitizens. As such, the agreement could provide ICE employees access to these data for all Medicaid enrollees, regardless of their immigration status. Also, the stated purpose of the access is to identify and locate aliens in the United States, not specifically those who are undocumented.

This action represents a reversal in prior policy that asserted CMS would not share and ICE would not use health coverage eligibility information for immigration enforcement purposes. Under this prior policy, ICE, CMS, and states made assurances to the public, applicants and enrollees, and health care providers that information collected to determine eligibility for and administer health coverage programs, including Medicaid and the Affordable Care Act (ACA) Marketplace, would not be used for immigration enforcement. CMS previously stated on its website that the information regarding individuals that it collects will only be used for administration of its programs: “To protect your privacy, we’ll tell you before we collect any personal information we need to run our health care programs and only use it for that purpose.” CMS also previously stated on its website that it will not use immigration status for immigration enforcement purposes: “We won’t use any immigration status you share with us for immigration enforcement purposes.”

A preliminary injunction temporarily halted the Trump Administration’s actions to share Medicaid enrollee data with ICE in some states. In June 2025, there were reports that the Trump administration shared the personal and health data of millions of noncitizen Medicaid enrollees living in California, Illinois, Washington, and D.C. with immigration enforcement officials. Following court challenges, a preliminary injunction temporarily blocked the data sharing in the 20  plaintiff states challenging the data sharing in August 2025. The court found that while “there does not appear to be anything categorically unlawful about DHS obtaining data from agencies like HHS for immigration enforcement, that the data sharing was implemented without a “reasoned decision making process” and likely violated the Administrative Procedures Act (APA). The injunction did not govern data sharing in other states that are not involved in the lawsuit.

On November 25, 2025, CMS issued a notice outlining its plans to begin sharing Medicaid data it receives from states with DHS and ICE once the preliminary injunction is lifted. The notice specifies that ICE, “contemplates requesting from CMS available biographical, contact, and location information, though ICE reserved the right, in a specific case, to consider requesting other information on a case-by-case basis as permitted by law.”  CMS indicates that the notice makes the public aware that it intends to disclose certain information to DHS and that it will update relevant websites to reflect its authority to share information with DHS. CMS asserts that the policy change is exempt from a notice and comment period because it is a policy statement outlining actions that are consistent with federal law. ICE also issued a policy memorandum to rescind its previous policy of not using health coverage eligibility information to pursue immigration enforcement action.  

In December 2025, the court updated its ruling, allowing CMS to share a subset of information it intends to share as outlined in the CMS notice. Under the injunction, CMS may only share information with DHS and ICE that is associated with the Medicaid program (not any other health programs); pertains only to individuals who are not lawfully present in the U.S.; and is limited to citizenship and immigration status, address, phone number, date of birth, and Medicaid ID. It prohibits the sharing of any additional information, such as health information, or information related to lawfully present individuals or citizens and precludes sharing additional information that may be requested on a case-by-case basis. It also specifies that, “to the extent that such basic biographical, contact, or location information about unlawfully present aliens is not severable from other information that DHS and ICE are not entitled to obtain (e.g., information about lawful permanent residents or citizens, sensitive health records), HHS or CMS may not share it.” The injunction only applies in the 22 plaintiff states involved in the lawsuit as of December 29, 2025, meaning the data sharing can proceed as outlined in the agreement and notice in other states.

Issues to Consider

Courts will ultimately determine the legality of the data sharing policy within the context of existing data privacy and protection laws. Beyond that determination, there are also issues to consider regarding how the data sharing policy can be operationalized in ways consistent with what the courts have allowed so far and broader implications for families, health care providers, and states.

Data limitations may make it difficult for CMS to comply with the current court order to share data only for individuals who are not lawfully present for the 20 states challenging the data sharing agreement. If the T-MSIS data available to CMS are similar to the data researchers have access to, it is not possible to isolate immigrants who are not lawfully present. Existing T-MSIS data elements identify individuals eligible only for payment of emergency Medicaid services. However, any data shared with ICE using that identifier will include people who are lawfully present (those subject to the five-year waiting period and those who do not have qualified status) as well as individuals who are not lawfully present. The data may also include some individuals who may not have been lawfully present at the time their information was entered into the system, but who have since transitioned to lawfully present status. In the future, the 2025 reconciliation law’s restrictions on Medicaid eligibility for certain lawfully present immigrants (including refugees and asylees among others), which begin in October 2026, will mean that the share of lawfully present immigrants identified as eligible only for payment of emergency Medicaid services will increase.

Going forward, the sharing of health coverage data with ICE will likely make immigrant families, including citizen children in those families, more reluctant to access health coverage and care as well as other programs and services. The policy exacerbates already heightened fears among immigrant families due to increased immigration enforcement activity overall as well as other restrictive immigration policies, including changes in public charge policy and the recission of protections from immigration enforcement in sensitive locations such as health care facilities. Prior to the CMS notice of plans to share data, the KFF/New York Times 2025 Survey of Immigrants found that about half (51%) of immigrant adults were “very concerned” or “somewhat concerned” that health officials or health care providers may share their information with ICE or CBP (Figure 1).  These fears may contribute to individuals delaying or avoiding medical care. About one in seven (14%) immigrant adults, including 48% who are likely undocumented and 20% who are parents, say that they or a family member have avoided seeking medical care since January 2025 due to immigration-related concerns.

The new data sharing policy may increase questions and concerns about data privacy and protections, not only for immigrants but for the public more broadly. People already enrolled in Medicaid did so under prior assurances that information would not be shared for immigration enforcement purposes. Applying new policy retroactively to people who took actions under previous policy and safeguards may broadly increase concerns about privacy and safeguards of data. Health care providers, including community health centers and hospitals, may also have growing concerns about potentially being required to share patient information. Additionally, the policy raises questions about what other data could be shared in the future. This policy represents one piece of broader Trump Administration actions to share data for immigration enforcement. While being challenged in courts, the Trump administration has directed the Internal Revenue Service to share personal information of individuals for immigration enforcement purposes. The Transportation Security Administration is sharing the names of passengers with ICE to seek out and expel people under deportation orders, although ICE previously had avoided interfering with domestic travel. It is unknown whether the Trump Administration might share additional information from other programs in the future for immigration enforcement; or whether future data sharing will extend to other purposes beyond immigration enforcement.

Some Affordable Care Act (ACA) Marketplace enrollees are choosing between plans that charge higher premium payments and plans with higher deductibles. Many enrollees are considering these tradeoffs following the expiration of the ACA’s enhanced premium tax credits at the end of 2025, according to a new Health System Tracker analysis.

While switching from a silver plan to a bronze plan could lower premium payments, the loss of cost-sharing reductions for deductibles and copays and the higher cost-sharing associated with a bronze plan may leave these enrollees worse off financially, depending on how much care they need.

The full analysis and other data on health costs are available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.