A Look at Waiting Lists for Medicaid Home- and Community-Based Services from 2016 to 2026

Authors: Alice Burns, Abby Wolk, and Molly O'Malley Watts
Published: Oct 5, 2026

Medicaid is the primary payer for long-term care (LTC) in the U.S. and pays for more than two-thirds of the LTC delivered in home- and community-based settings. Most home care (also known as “home- and community-based services” or HCBS) is optional for states to provide and is frequently offered through “waivers,” which allow states to cover a wide range of benefits and to choose—and limit—the number of people who receive services. KFF estimates that more than 5 million Medicaid enrollees use home care, and that about half of people are using home care through waivers. States’ ability to cap the number of people enrolled in home care waivers can result in waiting lists when the number of people seeking services exceeds the number of waiver slots available.

Passed last year, the 2025 reconciliation law made substantial changes to Medicaid that are expected to significantly reduce federal funding for Medicaid and lead to coverage loss for many current enrollees, placing new financial pressures on states, providers, and enrollees. Given the substantial share of Medicaid spending that pays for home care, and the optional nature of most home care programs, cuts to home care programs could occur as states respond to reduced federal spending. If states cut home care by reducing the number of people who can receive waiver services, waiting lists could increase. Proposals to cut home care may face challenges because people who rely on such services have complex health care needs and because elections may make it more difficult to restrict coverage. Recent tracking of programmatic changes to Medicaid home care highlights that some states have cut their programs, but in many cases, proposed cuts were not enacted, and other states continue to make enhancements.

Waiting lists could also increase because of changes to immigration policy in states that use waiting lists to manage shortages of home care workers. Three in 10 direct care workers are immigrants, and recent federal policy changes could further exacerbate the challenge of retaining and growing the workforce.

This data note provides new information about waiting lists in Medicaid home care before many of the provisions in the reconciliation law go into effect. Waiting lists are an incomplete measure of unmet need (Box 1) and are not necessarily comparable across states or over time. The data come from the 24th KFF survey of officials administering Medicaid home care programs in all 50 states and the District of Columbia (hereafter referred to as a state), which states completed between April and August 2026. The survey was sent to each state official responsible for overseeing home care benefits (including home health, personal care, and waiver services for specific populations such as people with physical disabilities). All states except Florida and South Carolina responded to the 2026 survey. To facilitate comparisons over time, Florida’s responses to the 2022 survey and South Carolina’s responses to the 2025 survey were included with their permission. Survey findings are reported by state and waiver target population, although states often offer multiple waivers for a given target population. Key takeaways include:

  • Forty states maintain waiting lists or interest lists for people who would like to receive home care, a number that fluctuated little between 2016 and 2026.
  • In all years since 2016, there have been at least 0.5 million people on waiting lists or interest lists, with a total of almost 650,000 in 2026.
  • In 2026, two states reported having at least one new waiting list (across three waivers), and 32 states reported an increase in the number of people on waiting lists or interest lists compared with only 7 states reporting a decrease.
  • Most people on waiting lists or interest lists have intellectual or developmental disabilities (I/DD), and most live in states that do not screen any people for eligibility prior to adding them to waiting lists.
  • Most people on waiting lists or interest lists are eligible for personal care provided through states’ regular Medicaid programs or for services provided through specialized state plan home care benefits.

KFF also recently updated the waiting list indicators on State Health Facts, which show data by state and target population.

Box 1: Why do waiting lists provide an incomplete measure of unmet need and why is it difficult to compare waiting lists across states?

Waiting lists provide an indication of people who may need services they are not receiving, but they are an incomplete measure of unmet need for several reasons. Waiting lists reflect the populations a state chooses to serve, the services it decides to provide, the resources it commits, and the availability of workers to provide services. Waiting lists do not include people with unmet needs in the following types of circumstances:

  • States do not cover the applicable services (and therefore have no waiting list),
  • States allow all eligible people to enroll but restrict service provision to manage total spending in the waiver, and
  • Eligible people are enrolled but providers have no excess capacity (and in some cases, the home care providers maintain their own waiting lists).

It is difficult to compare waiting lists across states because states’ approaches to managing waiting lists differ in how they prioritize and screen for eligibility. Some waiting lists include only eligible individuals while others include people for whom eligibility has not been determined. The availability of non-waiver services for people on waiting lists also varies. Although people may wait a long time to receive waiver services—34 months on average in 2026—most people are eligible for other types of home care while they wait.

Starting in 2027, states will be required to report the number of people on waiting lists as required under a final rule on access to Medicaid services, but it is unclear whether such reporting will address these data limitations on waiting lists. The data will include the number of people who are waiting to enroll in a waiver program, information on whether the people on the list have been screened for eligibility, the average amount of time people newly enrolled in the waiver over the past 12 months spent waiting to enroll, the average length of time between approval for services and service start dates, and the percent of authorized hours of care that were provided. Although the regulation does not mention interest lists, referral lists, or registries, the preamble to the rule indicates the Centers for Medicare & Medicaid Services’ (CMS) intent for states to report all types of lists.

Despite the enhanced data states will be required to report, waiting list and waiver information will remain imperfect measures of unmet need. None of the new data will reflect how long it takes for people to receive home care provided through the Medicaid state plan, or how comprehensive services are. The new data also do not capture the number of people whose authorized services are below needed levels because of hourly or dollar caps on the amount of home care they can receive.

How Many States Have Waiting Lists for Home Care?

Between 2016 and 2026, the number of states with waiting lists has fluctuated between 37 and 41 and is currently at 40 states (Figure 1). While some Affordable Care Act (ACA) opponents have cited waiver waiting lists to argue that expanding Medicaid diverts funds from adults ages 65+ and those with physical disabilities, research shows that ACA Medicaid expansion has led to gains in coverage for people with disabilities and chronic illnesses. Waiting lists for home care predate the ACA Medicaid expansion, which became effective in most states in 2014, and both expansion and non-expansion states have waiting lists. Waiver enrollment caps have existed since home care waiver authority was added to federal Medicaid law in the early 1980s.

The Number of States with Waiting Lists or Interest Lists for Medicaid Home Care Has Been Fairly Stable Since 2016 (Stacked column chart)

While the overall number of states with waiting lists did not change much from 2025 to 2026, there were more changes in waiting lists for specific states and for specific types of waivers. Seven states (across eight waivers) removed waiting lists, including Nebraska, which no longer reported any waiting lists, and Oregon, which eliminated a waiting list of 1,000 people from its Section 1115 waiver for adults ages 65+ and those with physical disabilities. Two states (across three waivers) reported new waiting lists. Washington reported new waiting lists for people with I/DD (275 people) and adults ages 65+ and those with physical disabilities (waiting list size unknown), and Kentucky reported a new waiting list for individuals with traumatic brain or spinal cord injuries (5 people).

How Many People Are on Waiting Lists for Home Care?

Between 2025 and 2026, total enrollment in waiting lists and interest lists increased by about 7% and is almost 650,000 in 2026 (Figure 2). Overall, there was an increase in the number of people on waiting or interest lists in 32 states and a decrease in 7 states. One factor that contributes to changes over time is changes in states’ policies for managing their waiting lists. In 2026, several states changed their policies, but those changes did not result in any major increases or decreases in waiting lists. However, that has not been true in past years. For example, between 2018 and 2020, the total number of people on waiting lists decreased by 155,000, or 19%. Nearly half of that change came from Ohio’s implementation of a waiting list assessment of waiver eligibility, which reduced the size of the state’s waiting list by nearly 70,000 people. In 2026, most states (32) with waiting lists screen individuals for waiver eligibility for at least one waiver, but even among those states, four (California, Maryland, Mississippi, and Washington) do not screen for all waivers. The eight states that do not screen for eligibility among any waivers (Alaska, Florida, Iowa, New Mexico, Oklahoma, Oregon, South Carolina, and Texas) account for over half (56%) of all people on waiting lists.

A Disproportionate Number of People on Waiting Lists for Home Care Live in States That Don't Assess Eligibility for People Waiting (Stacked column chart)

In 2026 and earlier years, a disproportionate number of people on home care waiting lists or interest lists lived in states that did not screen people on waiting lists for eligibility. One reason waiting lists provide an incomplete picture of need is that not all people on waiting lists will be eligible for services. The number of states that do not screen for eligibility on any waiting lists ranged from six to eight states between 2022 and 2026, yet the share of individuals on waiting lists in these states ranged from 40% to 56%. Interviews about home care waiting lists found that when waiver services are provided on a first-come, first-served basis, people enroll in waiting lists in anticipation of future need. That study found that in some states, families would add their children to waiting lists for people with I/DD at a young age, assuming that by the time they reached the top of the waiting list, their children would have developed the immediate need for services. Many of those waivers offer comprehensive home care packages that include supported employment, supportive housing, or round-the-clock services. Among the eight states that do not screen people for eligibility on any lists, seven have only waiting lists and one has only interest lists.

Who Is on Waiting Lists for Home Care?

Most people on waiting lists have I/DD, particularly in states that do not screen for waiver eligibility before placing someone on a waiting list. People on waiting lists for waivers serving people with I/DD (which include waivers specific to people who have autism) make up 78% of waiting lists in states that do not screen for waiver eligibility, compared with 61% in states that do determine waiver eligibility before placing someone on a waiting list. People with I/DD make up almost three-quarters (72%) of the total waiver waiting list population (Figure 3). Adults ages 65+ and those with physical disabilities account for one-quarter (25%), while the remaining share (3%) includes children who are medically fragile or technology dependent, people with traumatic brain or spinal cord injuries, people with mental illness, and people with HIV/AIDS. People who are on home care waiting lists are generally not representative of the Medicaid population or the population that uses home care. Most people on waiting lists have I/DD, but KFF analysis shows that people with I/DD make up fewer than half of the people served through 1915(c) waivers (the largest source of Medicaid home care spending).

Most People on Medicaid Home Care Waiting Lists or Interest Lists Have Intellectual or Developmental Disabilities (Pie Chart)

How Long Are People on Waiting Lists for Home Care?

In 2026, people on waiting or interest lists accessed services after an average of 34 months (35 of 40 states responding), up from 32 months in 2025. People with I/DD wait 38 months on average. The average waiting period for other waiver populations ranged from 8 months for waivers targeting medically fragile and technology-dependent children to 65 months for waivers that serve people with autism.

Most people on waiting or interest lists for whom living arrangements are known live in community settings while they wait. Among the 649,900 people on lists for waiver services in 2026, living arrangements are unknown for more than 425,000. Among the people whose living arrangements are known, 95% (213,800) live in the community and 5% (10,900) live in institutional settings. Although most people on waiting lists live in the community, that may not be true for all waivers. In one California waiver for adults ages 65+ and those with physical disabilities, nearly half of the 16,100 people on the waiting list are living in institutions.

While waiting for waiver services, people living in the community are likely to be eligible for other home care through Medicaid state plans. Of the more than 5 million people who use home care, KFF estimates that roughly half use services provided through the Medicaid state plan, such as personal care to help with bathing or preparing meals, therapies to help people regain or acquire independent living skills, and assistive technology. States may not use waiting lists to restrict the number of people eligible to use such services, and over 80% of people on home care waiting lists are eligible for personal care or other state plan services. They would not, however, have access to more specialized services such as supported employment or adult day care. People on waiting lists who receive state plan services may also have fewer hours of personal care than they would in a waiver program, or they may not have assistance with some of the activities they need help with, such as bathing, dressing, preparing meals, or managing medication.

Many Medicare Part D Stand-Alone Drug Plan Enrollees Will See Modest Premium Increases for 2027, But Others Could Pay Much More If They Don’t Switch Plans

Published: Oct 2, 2026

The Centers for Medicare & Medicaid Services (CMS) has just released information about Medicare Part D plans for 2027, including plan availability and premiums for the coming year. The agency emphasized stability in the Part D prescription drug plan (PDP) marketplace for 2027 (as it did for 2026) and estimated only a modest $1 increase in the average monthly PDP premium from $35 to $36. KFF analysis of PDP availability and premiums for 2027 shows a mixed picture, with modest premium increases for many Part D enrollees for their current plan but steeper increases for others, and a reduction in the number of PDP options for the fourth year in a row. Key takeaways include:

  • The number of stand-alone PDPs available to the average beneficiary will fall for the fourth year in a row, from 11 in 2026 to 9 in 2027. PDP availability in 2027 varies by state, ranging from 8 PDPs in 15 states to 12 PDPs in 1 state, the same range as in 2026 but with most states having 8 or 9 PDPs rather than 10 or more.
  • Many PDP enrollees will see premium reductions or only modestly higher premiums in 2027 if they keep their current plan, but others will face substantially higher premiums. Enrollees in six of the eight PDPs that will continue to be offered on a national basis in 2027 will see premium reductions in some states if they keep their current plan, but enrollees in many other states will see higher premiums for these same plans if they don’t switch. Centene continues to offer the lowest-premium PDPs in 2027, with premiums for both Wellcare PDPs under $10 per month in many states, while enrollees in United’s AARP-branded PDPs will face substantially higher premiums and monthly increases of $50 or more in many states if they keep their current plan.
  • There will be no zero premium PDPs available for Part D enrollees who do not receive low-income subsidies (LIS) in 2027. All 4 million PDP enrollees who paid no monthly premium in 2026 will face higher premiums in 2027 whether they keep their current plan or switch to a new PDP.
  • With 56% of all Part D enrollees in Medicare Advantage drug plans in 2026, a majority of Part D enrollees will not be affected by PDP premium changes and may not face premium increases of any magnitude. Medicare Advantage plans can use rebate dollars from the federal government to reduce premiums for prescription drug coverage, funds that are not available to plan sponsors for PDPs.
  • Ending the Part D Premium Stabilization Demonstration did not result in substantially higher across-the-board PDP premiums but still likely affected premium levels for 2027. The disappearance of zero premium PDPs for Part D enrollees without low-income subsidies and monthly premium increases greater than $50 for some PDP enrollees if they keep their current plan are possibly related to the termination of extra subsidies that were provided to PDP plan sponsors under the demonstration.

Findings

The number of stand-alone PDPs available to the average beneficiary will fall for the fourth year in a row, from 11 in 2026 to 9 in 2027, while the total number of stand-alone drug plans available will fall from 360 plans nationwide offered by 17 parent organization in 2026 to 316 plans offered by 15 parent organizations in 2027. The reduction in PDP offerings is largely due to two plan sponsors scaling back: Health Care Service Corporation is withdrawing the HealthSpring Extra Rx PDP from 22 regions, and CVS Health is withdrawing the Silverscript Choice PDP from 13 regions. Humana remains the only insurer offering three PDPs in all 34 PDP regions. PDP availability in 2027 varies by state, ranging from 8 PDPs in 15 states to 12 PDPs in 1 state (Figure 1) – the same range as in 2026 but with most states having 8 or 9 PDPs rather than 10 or more. Medicare Part D enrollees in almost all states will see a modest reduction in the number of PDPs for 2027, except Florida which is gaining 1 PDP and no change in 4 other states (Table 1).

Medicare Part D Stand-Alone Prescription Drug Plan Availability in 2027 Varies by State, Ranging from 8 PDPs in 15 states to 12 PDPs in 1 state (Choropleth map)

Many PDP enrollees will see premium reductions or only modestly higher premiums in 2027 if they keep their current plan, but others will pay substantially higher premiums. Enrollees in six of the eight PDPs that will continue to be offered on a national basis in 2027 will see premium reductions in some states if they keep their current plan, but enrollees in many other states will see higher premiums for these same plans if they don’t switch (Figure 2).

Monthly Premiums for Stand-Alone Part D Coverage in 2027 Will Decrease or Increase by Less than  for Several National Plans in Many States, But Some Premiums Will Increase by  or More (Stacked Bars)

Other takeaways from an initial analysis of 2027 PDP premiums and changes from 2026 include:

  • There will be no $0 premium PDPs available for Part D enrollees who do not receive low-income subsidies (LIS) in 2027. According to KFF analysis, 28% of PDP enrollees without LIS, or 4 million PDP enrollees, paid no monthly premium in 2026. All these enrollees will face higher premiums in 2027 whether they keep their current plan or switch to a new PDP. This includes:
    • Humana Basic Rx PDP enrollees in 28 states, facing premium increases of $6.30 to $30.60 per month if they keep this plan;
    • Wellcare Value Script and Wellcare Classic enrollees in 16 states, facing monthly increases of $5.30 and $7.30 respectively;
    • HealthSpring Assurance Rx enrollees in 11 states, facing monthly increases of $9.30 to $14.70;
    • Humana Value Rx enrollees in 5 states, facing monthly increases of $17.20 to $22.30; and
    • AARP Medicare Rx Saver enrollees in 3 states, facing a monthly increase of $10.30.
  • Centene continues to offer the lowest premium PDPs, with 2027 monthly premiums of $5.30 for Wellcare Value Script in 45 states and $7.30 for Wellcare Classic in 33 states. For the 5.9 million non-LIS enrollees in Wellcare Value Script in 2026, those in 29 states will see premium reductions in 2027 ranging from less than $1 to $17.50 if they keep their current plan, while those in another 22 states will see premium increases in 2027 ranging from less than $1 to $5.30.
  • Enrollees in United’s AARP-branded PDPs will face substantially higher premiums in many states if they keep their current plan, with monthly premium increases of $50 or more in all 50 states and DC for AARP Medicare Rx Preferred (including 37 states with premium increases greater than $75 and 4 states with premium increases of more than $100) and increases of $50 or more in 33 states for AARP Medicare Rx Saver. Together, these plans enroll more than 2 million non-LIS enrollees in 2026. Switching to a less expensive PDP is an option in all areas, but KFF analysis shows that many enrollees don’t compare plans or switch during open enrollment.

With 56% of all Part D enrollees in Medicare Advantage drug plans in 2026, a majority of Part D enrollees will not be affected by PDP premium changes and may not face premium increases of any magnitude. According to CMS, the average Medicare Advantage drug plan premium for 2027 will continue to be considerably lower than the average monthly PDP premium, and it’s likely that most MA-PD enrollees will be in plans charging zero premium in 2027, as in 2026 and previous years. This is because Medicare Advantage plans can use rebate dollars from the federal government to reduce premiums for prescription drug coverage, funds that are not available to plan sponsors for PDPs.

Ending the Part D Premium Stabilization Demonstration did not result in substantially higher across-the-board PDP premiums but still likely affected premium levels for 2027. CMS’s decision to terminate the Part D Premium Stabilization Demonstration for 2027, rather than continue it for a third year as originally planned when the demonstration was announced, seemed to point in the direction of higher premiums for PDP coverage in 2027. The demonstration provided extra subsidies to PDP plan sponsors, and by extension PDP enrollees, in two ways – reducing the base beneficiary premium, which is used in the calculation of individual plan premiums, and capping the year-over-year increase in the monthly premium. CMS determined that the extra financial support provided to PDP sponsors under the demonstration was no longer needed after 2026, and in fact, across-the-board substantial PDP premium increases for 2027 didn’t materialize. However, the disappearance of zero premium PDPs for Part D enrollees without low-income subsidies is a possible outcome of the termination of the demonstration, and eliminating the cap on the year-over-year increase in the monthly PDP premium has meant that monthly premium increases greater than $50 are possible for some PDP enrollees if they keep their current plan.

Even if the monthly premium for a given Part D drug plan is decreasing or increasing only modestly, premiums are only one feature for beneficiaries to consider when evaluating their Part D coverage. As is commonly advised during open enrollment, Medicare beneficiaries may want to evaluate what other features of their Part D plan might be changing, including what drugs are and aren’t covered on the plan’s formulary, tier placement of covered drugs, deductibles, and cost-sharing requirements. With Part D costs overall on the rise, the tradeoff Part D enrollees might face as their premium increases are kept in check is that their coverage may be getting less generous, which could mean fewer drugs covered, higher cost-sharing requirements, or greater utilization management restrictions – or possibly a combination of all three.

Medicare Part D Enrollees in Almost All States Will See a Modest Reduction in the number of Stand-Alone Prescription Drug Plans for 2027, Except in Florida Which is Gaining 1 PDP (Table)

Medicare 101

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Table of Contents

What Is Medicare?

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Medicare is the federal health insurance program established in 1965 under Title XVIII of the Social Security Act for people age 65 or older, regardless of income or medical history, and later expanded to cover people under age 65 with long-term disabilities. Today, Medicare provides health insurance coverage to 68 million people, including 61 million people age 65 or older and 7 million people under age 65. Medicare covers a comprehensive set of health care services, including hospitalizations, physician visits, and prescription drugs, along with post-acute care, skilled nursing facility care, home health care, hospice, and preventive services. People with Medicare can choose to get coverage under traditional Medicare or Medicare Advantage private plans.

Medicare spending comprised 13.5% of the federal budget in 2024 and 21.2% of national health care spending in 2023. Funding for Medicare comes primarily from government contributions, payroll tax revenues, and premiums paid by beneficiaries. Over the longer term, the Medicare program faces financial pressures associated with higher health care costs, growing enrollment, and an aging population.

Who Is Covered by Medicare?

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Most people become eligible for Medicare when they reach age 65, regardless of income, health status, or medical conditions. Residents of the U.S., including citizens and permanent residents, are eligible for premium-free Medicare Part A if they have worked at least 40 quarters (10 years) in jobs where they or their spouses paid Medicare payroll taxes and are at least 65 years old. People under age 65 who receive Social Security Disability Insurance (SSDI) payments generally become eligible for Medicare after a two-year waiting period. People diagnosed with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS) become eligible for Medicare with no waiting period.

Medicare covers a diverse population in terms of demographics and health status, and this population is expected to grow larger and more diverse in the future as the U.S. population ages. Currently, most people with Medicare are White, female, and between the ages of 65 and 84 (Figure 1). The share of U.S. adults who are age 65 or older is projected to grow from 17% in 2022 to nearly a quarter of the nation’s total population (24%) in 2060. Among people ages 65 and older, the share of people ages 80 and older will increase from 23% in 2022 to 34% in 2060. As the U.S. population ages, the number of Medicare beneficiaries is projected to grow by more than one-third from 68 million people in 2024 to more than 93 million people in 2060. The Medicare population will also grow more racially and ethnically diverse. By 2060, people of color will comprise 44% of the U.S. population ages 65 and older, up from a quarter in 2022.

Selected Demographic Characteristics of Medicare Beneficiaries, 2022

While many Medicare beneficiaries enjoy good health, others live with health problems that affect their quality of life, including multiple chronic conditions, limitations in their activities of daily living, and cognitive impairments. In 2022, nearly half (45%) of Medicare beneficiaries had four or more chronic conditions, more than a quarter (28%) had a functional impairment, and 17% had a cognitive impairment (Figure 2).

Selected Measures of Health Status of the Medicare Population, 2022

Most Medicare beneficiaries have limited financial resources, including income and assets. In 2024, one in four Medicare beneficiaries - 16.5 million people with Medicare - lived on incomes below $24,600 per person, and half (32.9 million) of all Medicare beneficiaries lived on incomes below $43,200 per person; one in four Medicare beneficiaries had savings below $18,950 per person in 2024, while half had savings below $110,100 per person. Income among Medicare beneficiaries is generally lower for women than men, for people of color than White beneficiaries, and for beneficiaries under age 65 with disabilities than older beneficiaries (Figure 3).

Among Medicare Beneficiaries, Per Capita Income Declines with Age among Older Adults and Is Lower for Women, Black and Hispanic Beneficiaries, and Beneficiaries Under 65 (Split Bars)

What Does Medicare Cover and How Much Do People Pay for Medicare Benefits?

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Benefits. Medicare covers a comprehensive set of medical care services, including hospital stays, physician visits, and prescription drugs. Medicare benefits are divided into four parts: 

  • Part A, also known as the Hospital Insurance (HI) program, covers inpatient care provided in hospitals and short-term stays in skilled nursing facilities, hospice care, post-acute home health care, and pints of blood received at a hospital or skilled nursing facility. An estimated 67.5 million people were enrolled in Part A in 2024. In 2023, 13% of beneficiaries in traditional Medicare had an inpatient hospital stay, while 7% used home health care services (which are also covered under Part B), and 3% had a skilled nursing facility stay (Figure 4). (Comparable utilization data for beneficiaries in Medicare Advantage is not available.)
  • Part B,the Supplementary Medical Insurance (SMI) program, covers outpatient services such as physician visits, outpatient hospital care, and preventive services (e.g., mammography and colorectal cancer screening), among other medical benefits. An estimated 62 million people were enrolled in Part B in 2024. A larger share of beneficiaries use Part B services compared to Part A services. For example, in 2023, more than 9 in 10 (92%) traditional Medicare beneficiaries used physician and other services covered under Part B and 59% used outpatient hospital services.
  • Part C, more commonly referred to as the Medicare Advantage program, allows beneficiaries to enroll in a private plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO), as an alternative to traditional Medicare. Medicare Advantage plans cover all benefits under Medicare Part A, Part B, and, in most cases, Part D (Medicare’s outpatient prescription drug benefit), and typically offer extra benefits, such as dental services, eyeglasses, and hearing exams. In 2025, 34.1 million beneficiaries are enrolled in Medicare Advantage, which is 54% of Medicare beneficiaries who are eligible to enroll in Medicare Advantage plans. (See “What Is Medicare Advantage and How Is It Different From Traditional Medicare?” for additional information.) 
  • Part D is a voluntary outpatient prescription drug benefit delivered through private plans that contract with Medicare, either stand-alone prescription drug plans (PDPs) or Medicare Advantage prescription drug (MA-PD) plans. In 2025, 54.8 million beneficiaries are enrolled in Part D, with 58% enrolled in MA-PDs and 42% enrolled in PDPs. In 2023, over 9 in 10 Medicare beneficiaries enrolled in Part D (93%) used prescription drugs. (See “What Is the Medicare Part D Prescription Drug Benefit?” for additional information.)
Use of Selected Medicare-Covered Services by People with Medicare in 2023

Although Medicare covers a comprehensive set of medical benefits, Medicare does not cover long-term care services. Additionally, coverage of vision services, dental care, and hearing aids is not part of the standard benefit, though most Medicare Advantage plans offer some coverage of these services.

Premiums and cost sharing. Medicare has varying premiums, deductibles, and coinsurance amounts that typically change each year to reflect program cost changes.

  • Part A: Most beneficiaries do not pay a monthly premium for Part A services, but are required to pay a deductible for inpatient hospitalizations ($1,676 in 2025). (People who are working contribute payroll taxes to Medicare and qualify for premium-free Part A at age 65 based on having paid 1.45% of their earnings over at least 40 quarters.) Beneficiaries are generally subject to cost sharing for Part A benefits, including extended inpatient stays in a hospital ($419 per day for days 61-90 and $838 per day for days 91-150 in 2025) or skilled nursing facility ($209.50 per day for days 21-100 in 2025). There is no cost sharing for home health visits.
  • Part B: Beneficiaries enrolled in Part B, including those in traditional Medicare and Medicare Advantage plans, are generally required to pay a monthly premium ($185 in 2025). Beneficiaries with annual incomes greater than $106,000 for a single person or $212,000 for a married couple in 2025 pay a higher, income-related monthly Part B premium, ranging from $259 to $628.90. Approximately 8% of Medicare beneficiaries with Part B coverage are expected to pay income-related Part B premiums in 2025. Part B benefits are subject to an annual deductible ($257 in 2025), and most Part B services are subject to coinsurance of 20 percent.
  • Part C: In addition to paying the Part B premium, Medicare Advantage enrollees may be charged a separate monthly premium for their Medicare Advantage plan, although three-quarters (76%) of enrollees are in plans that charge no additional premium in 2025. Medicare Advantage plans are generally prohibited from charging more than traditional Medicare, but vary in the deductibles and cost-sharing amounts they charge. Medicare Advantage plans typically establish provider networks and may require higher cost sharing for services received from non-network providers.
  • Part D: Part D plans vary in terms of premiums, deductibles, and cost sharing. People in traditional Medicare who are enrolled in a separate stand-alone Part D plan generally pay a monthly Part D premium unless they qualify for full benefits through the Part D Low-Income Subsidy (LIS) program and are enrolled in a premium-free (benchmark) plan. In 2025, the average enrollment-weighted premium for stand-alone Part D plans is $39 per month, substantially higher than the enrollment-weighted average monthly portion of the premium for drug coverage in MA-PDs ($7 in 2025).

Sources of coverage. Most people with Medicare have some type of coverage that may protect them from unlimited out-of-pocket costs and may offer additional benefits, whether it’s coverage in addition to traditional Medicare or coverage from Medicare Advantage plans, which are required to have an out-of-pocket cap and typically offer supplemental benefits (Figure 5). However, based on KFF analysis of data from the 2022 Medicare Current Beneficiary Survey, 3.2 million people with Medicare have no additional coverage, which places them at risk of facing high out-of-pocket spending or going without needed medical care due to costs. 

  • Medicare Advantage plans now cover more than half (54%) of all Medicare beneficiaries enrolled in both Part A and Part B, or 34 million people (in 2022, Medicare Advantage enrollment was just under half of beneficiaries, or 29.9 million people). (See “What Is Medicare Advantage and How Is It Different From Traditional Medicare?” for additional information.)
  • Employer and union-sponsored plans provided some form of coverage to 14.5 million Medicare beneficiaries – nearly a quarter (24%) of Medicare beneficiaries overall in 2022. Of the total number of beneficiaries with employer coverage, 9.1 million beneficiaries had this coverage in addition to traditional Medicare (31% of beneficiaries in traditional Medicare), while 5.4 million beneficiaries were enrolled in Medicare Advantage employer group plans. (These estimates exclude 5.6 million Medicare beneficiaries with Part A only in 2022, primarily because they or their spouse were active workers and had primary coverage from an employer plan and Medicare as a secondary payer.) 
  • Medicare supplement insurance, also known as Medigap, covered 2 in 10 (21%) Medicare beneficiaries overall, or 42% of those in traditional Medicare (12.5 million beneficiaries) in 2022. Medigap policies, sold by private insurance companies, fully or partially cover Medicare Part A and Part B cost-sharing requirements, including deductibles, copayments, and coinsurance. 
  • Medicaid, the federal-state program that provides health and long-term services and supports coverage to low-income people, was a source of coverage for 11.6 million Medicare beneficiaries with low incomes and modest assets in 2022 (19% of all Medicare beneficiaries), including 7.0 million enrolled in Medicare Advantage and 4.6 million in traditional Medicare. (This estimate is somewhat lower than KFF estimates published elsewhere due to different data sources and methods used.) For these beneficiaries, referred to as dual-eligible individuals, Medicaid typically pays the Medicare Part B premium and may also pay a portion of Medicare deductibles and other cost-sharing requirements. Most dual-eligible individuals are eligible for full Medicaid benefits, including long-term services and supports.
Nearly all People with Medicare Had Coverage Either Through Medicare Advantage Plans or Traditional Medicare Coupled with Some Other Type of Coverage in 2022

What Is Medicare Advantage and How Is It Different From Traditional Medicare?

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Medicare Advantage, also known as Medicare Part C, allows beneficiaries to receive their Medicare benefits from a private health plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO). Medicare pays private insurers to provide Medicare-covered benefits (Part A and B, and often Part D) to enrollees. Virtually all Medicare Advantage plans include an out-of-pocket limit for benefits covered under Parts A and B, and most offer additional benefits not covered by traditional Medicare, such as vision, hearing, and dental. The average Medicare beneficiary can choose from 34 Medicare Advantage plans with prescription drug coverage offered by eight insurance companies in 2025. These plans vary across many dimensions, including premiums, cost-sharing requirements, out-of-pocket limits, extra benefits, provider networks, prior authorization and referral requirements, denial rates, and prescription drug coverage.

More than half of all eligible Medicare beneficiaries (54%) are currently enrolled in a Medicare Advantage plan, up from 25% in 2010 (Figure 6). The share of eligible Medicare beneficiaries in Medicare Advantage plans varies across states, ranging from 2% in Alaska to 63% in Alabama and Michigan.  Growth in Medicare Advantage enrollment is due to a number of factors. Medicare beneficiaries are attracted to Medicare Advantage due to the multitude of extra benefits, the simplicity of one-stop shopping (in contrast to traditional Medicare where beneficiaries might also purchase a Part D plan and a Medigap plan), and the availability of plans with no premiums beyond the Part B premium, driven in part by the current payment system that generates high gross margins in this market (see “How Does Medicare Pay Private Plans in Medicare  Advantage and Medicare Part D?” for additional information). Insurers market these plans aggressively, airing thousands of TV ads for Medicare Advantage during the Medicare open enrollment period. In some cases, Medicare beneficiaries have no choice but to be enrolled in a Medicare Advantage plan for their retiree health benefits as some employers are shifting their retirees into these plans; if they are dissatisfied with this option, they may have to give up retiree benefits altogether, although they would retain Medicare and have the option to choose traditional Medicare (potentially with a Medigap supplement).

More Than Half (54%) of Eligible Medicare Beneficiaries Are Enrolled in a Medicare Advantage Plan in 2025

There are several differences between Medicare Advantage and traditional Medicare. Medicare Advantage plans can establish provider networks, the size of which can vary considerably for both physicians and hospitals, depending on the plan and the county where it is offered. These provider networks may also change over the course of the year. Medicare Advantage enrollees who seek care from an out-of-network provider might be required to pay higher cost sharing or pay in full out of pocket for their care. In contrast, traditional Medicare beneficiaries can see any provider that accepts Medicare and is accepting new patients. In 2019, 89% of non-pediatric office-based physicians accepted new Medicare patients, with little change over time. Only 1% of all non-pediatric physicians formally opted out of the Medicare program in 2024.

Medicare Advantage plans also often use tools to manage utilization and costs, such as requiring enrollees to receive prior authorization before a service will be covered and requiring enrollees to obtain a referral for specialists or mental health providers. In 2024, virtually all Medicare Advantage enrollees were in plans that required prior authorization for some services, most often higher-cost services. Medicare Advantage insurers made nearly 50 million prior authorization determinations in 2023 (Figure 7). Prior authorization and referrals to specialists are used less frequently in traditional Medicare, with prior authorization generally applying to a limited set of services.

Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023

Medicare Advantage plans are required to use payments from the federal government that exceed their costs of covering Part A and B services (known as rebates) to provide supplemental benefits to enrollees, such as lower cost sharing, extra benefits not covered by traditional Medicare, or reducing the amount of Part B and/or Part D premiums. Examples of extra benefits include eyeglasses, hearing exams, preventive dental care, and gym memberships (Figure 8). (See “How Does Medicare Pay Private Plans in Medicare Advantage and Medicare Part D?” for a discussion of how Medicare pays Medicare Advantage plans.) Medicare Advantage plans must also include a cap on out-of-pocket spending, which provides protection from catastrophic medical expenses. Traditional Medicare does not have an out-of-pocket limit, though purchasing a Medigap policy effectively provides protection from catastrophic costs for beneficiaries in traditional Medicare. (See “What Does Medicare Cover and How Much Do People Pay for Medicare Benefits?” for a brief discussion of Medigap.)

Most Medicare Advantage Enrollees in Plans Available for General Enrollment Have Access to Some Benefits Not Covered by Traditional Medicare in 2025

What Is the Medicare Part D Prescription Drug Benefit?

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Medicare Part D, Medicare’s voluntary outpatient prescription drug benefit, was established by the Medicare Modernization Act of 2003 (MMA) and launched in 2006. Before the addition of the Part D benefit, Medicare did not cover the cost of outpatient prescription drugs. Under Part D, Medicare helps cover prescription drug costs through private plans that contract with Medicare to offer the Part D benefit to enrollees, which is unlike coverage of Part A and Part B benefits under traditional Medicare, and beneficiaries must enroll in a Part D plan if they want this benefit.

A total of 54.8 million people with Medicare are currently enrolled in plans that provide the Medicare Part D drug benefit, including plans open to everyone with Medicare (stand-alone prescription drug plans, or PDPs, and Medicare Advantage drug plans, or MA-PDs) and plans for specific populations (including retirees of a former employer or union and Medicare Advantage Special Needs Plans, or SNPs). Nearly 6 in 10 Part D enrollees are in MA-PDs, as overall enrollment in Medicare Advantage plans has grown in recent years. Just over 13 million low-income beneficiaries receive extra help with their Part D plan premiums and cost sharing through the Part D Low-Income Subsidy Program (LIS).

For 2025, the average Medicare beneficiary has a choice of 14 stand-alone Part D plans and 34 Medicare Advantage drug plans. These plans vary in terms of premiums, deductibles and cost sharing, the drugs that are covered, any utilization management restrictions that apply, and pharmacy networks. People in traditional Medicare who are enrolled in a separate stand-alone Part D plan generally pay a monthly Part D premium unless they qualify for full benefits through the Part D LIS program and are enrolled in a premium-free (benchmark) plan. In 2025, the average enrollment-weighted premium for stand-alone Part D plans is $39 per month. In 2025, most stand-alone Part D plans include a deductible, averaging $491. Plans generally impose a tiered structure to define cost-sharing requirements and cost-sharing amounts charged for covered drugs, typically charging lower cost-sharing amounts for generic drugs and preferred brands and higher amounts for non-preferred and specialty drugs, and a mix of flat dollar copayments and coinsurance (based on a percentage of a drug’s list price) for covered drugs.

The standard design of the Medicare Part D benefit currently has three distinct phases, where the share of drug costs paid by Part D enrollees, Part D plans, drug manufacturers, and Medicare varies. Based on changes in the Inflation Reduction Act, these shares changed in 2024 and 2025 (Figure 9). Most notably, the Part D benefit now includes a $2,000 out-of-pocket spending cap, meaning Part D enrollees face no additional costs once their out-of-pocket costs exceed $2,000 in 2025. Previously, enrollees with high drug costs who did not receive low-income subsidies were responsible for paying 5% of their total drug costs when they reached the catastrophic coverage phase. This new out-of-pocket spending cap is projected to help an estimated 11 million Part D enrollees in 2025, including 6.1 million enrollees not receiving low-income subsidies.

The Share of Medicare Part D Drug Costs Paid by Enrollees, Plans, Drug Manufacturers, and Medicare Changed in 2024 and 2025

The Inflation Reduction Act of 2022, signed into law by President Biden on August 16, 2022, includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government, including several changes related to the Part D benefit. These provisions include (but are not limited to) (Figure 10):

  • Requiring the Secretary of the Department of Health and Human Services to negotiate the price of some Part D and Part B drugs covered under Medicare. The law that established the Part D benefit included a provision known as the “noninterference” clause, which prevented the HHS Secretary from being involved in price negotiations between drug manufacturers and pharmacies and Part D plan sponsors. In addition, the Secretary of HHS does not currently negotiate prices for drugs covered under Medicare Part B (administered by physicians). To date, Medicare has completed one round of price negotiation on 10 Part D drugs, with negotiated prices available in 2026, and selected 15 more Part D drugs for price negotiation in the second round, with negotiated prices available in 2027.
  • Adding a hard cap on out-of-pocket drug spending under Part D, which phased in beginning in 2024, and was limited to $2,000 in 2025 (increasing to $2,100 in 2026). As noted above, under the original design of the Part D benefit, enrollees had catastrophic coverage for high out-of-pocket drug costs, but there was no limit on the total amount that beneficiaries paid out of pocket each year.  
  • Limiting the out-of-pocket cost of insulin products to no more than $35 per month in all Part D plans and in Part B and making adult vaccines covered under Part D available for free as of 2023. Until these provisions took effect, beneficiary costs for insulin and adult vaccines were subject to varying cost-sharing amounts.
  • Expanding eligibility for full benefits under the Part D Low-Income Subsidy program in 2024, eliminating the partial LIS benefit for individuals with incomes between 135% and 150% of poverty. Beneficiaries who receive full LIS benefits pay no Part D premium or deductible and only modest copayments for prescription drugs until they reach the catastrophic threshold, at which point they face no additional cost sharing.
  • Requiring drug manufacturers to pay a rebate to the federal government if prices for drugs covered under Part D and Part B increase faster than the inflation rate, with the initial period for measuring Part D drug price increases running from October 2022-September 2023. Previously, Medicare had no authority to limit annual price increases for drugs covered under Part B or Part D. Year-to-year drug price increases exceeding inflation are not uncommon and affect people with both Medicare and private insurance.
Implementation Timeline of the Prescription Drug Provisions in the Inflation Reduction Act

How Does Medicare Pay Hospitals, Physicians, and Other Providers in Traditional Medicare?

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In 2024, Medicare was estimated to spend $464 billion on benefits covered under Part A and Part B for beneficiaries in traditional Medicare. Medicare pays providers in traditional Medicare using various payment systems depending on the setting of care (Figure 11).

Spending on Part A and Part B Benefits in Traditional Medicare is Estimated to be $464 Billion in 2024

Medicare relies on a number of different approaches when determining payments to providers for Part A and Part B services delivered to beneficiaries in traditional Medicare. These providers include hospitals (for both inpatient and outpatient services), physicians, skilled nursing facilities, home health agencies, and several other types of providers. Of the $464 billion in estimated spending on Medicare benefits covered under Part A and Part B in traditional Medicare in 2024, $149 billion (32%) was for hospital inpatient services and $68 billion (15%) was for hospital outpatient services, $71 billion (15%) was for services covered under the physician fee schedule, and $176 billion (38%) was for all other Part A or Part B services for beneficiaries in traditional Medicare.

Medicare uses prospective payment systems for most providers in traditional Medicare. These systems generally require that Medicare pre-determine a base payment rate for a given unit of service (e.g., a hospital stay, an episode of care, a particular service). Then, based on certain variables, such as the provider’s geographic location and the complexity of the patient receiving the service, Medicare adjusts its payment for each unit of service provided. Medicare updates payment rates annually for most payment systems to account for inflation adjustments. 

The main features of hospital, physician, outpatient, and skilled nursing facility payment systems (altogether accounting for 69% of spending on Part A and Part B benefits in traditional Medicare) are described below:

  • Inpatient hospitals (acute care): Medicare pays hospitals per beneficiary discharge using the Inpatient Prospective Payment System. The rate for each discharge corresponds to one of over 770 different categories of diagnoses – called Medicare Severity Diagnosis Related Groups (MS-DRGs), which reflect the principal diagnosis, secondary diagnoses, procedures performed, and other patient characteristics. DRGs that are likely to incur more intense levels of care and/or longer lengths of stay are assigned higher payments. Medicare’s payments to hospitals also account for a portion of hospitals’ capital and operating expenses.
  • Medicare also makes additional payments to hospitals in particular situations. These include additional payments for rural or isolated hospitals that meet certain criteria. Further, Medicare makes additional payments to help offset costs incurred by hospitals that are not otherwise accounted for in the inpatient prospective payment system. These include add-on payments for treating a disproportionate share (DSH) of low-income patients, as well as for covering costs associated with care provided by medical residents, known as indirect medical education (IME). While not part of the Inpatient Prospective Payment System, Medicare also pays hospitals directly for the costs of operating residency programs, known as Graduate Medical Education (GME) payments.
  • Physicians and other health professionals: Medicare reimburses physicians and other health professionals (e.g., nurse practitioners) based on the Physician Fee Schedule for over 10,000 services. Payment rates for these services are based on three components: (1) clinician work, (2) practice expenses, and (3) professional liability insurance (also known as medical malpractice insurance), which are measured in terms of “relative value units” (RVUs). Each component is adjusted to account for differences across geography and then multiplied by a conversion factor. Payment rates for individual services may be updated each year based in part on the recommendations of the AMA/Specialty Society RVS Update Committee (RUC), a volunteer committee of physicians and other professionals overseen by the American Medical Association (AMA). CMS also makes annual updates to the conversion factor based on statutory factors, as well as adjustments to preserve budget neutrality, which may result in payment cuts for physicians and other clinicians whenever the projected cost of all Physician Fee Schedule spending is expected to increase by more than $20 million for the year.
  • Payment rates specified under the Physician Fee Schedule are subject to further adjustments under the Quality Payment Program, established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Clinicians can receive payment increases if they participate in qualified advanced alternative payment models (A-APMs), which bear some financial risk for the costs of patient care, while those who participate in the Merit-based Incentive Payment System (MIPS) may receive payment increases or decreases (or no change) depending on their performance on specific quality measures. (See “What Is Medicare Doing to Promote Alternative Payment Models?” for more information about alternative payment models in Medicare.)
  • While not part of the Physician Fee Schedule, Medicare also pays for a limited number of drugs that physicians and other health care providers administer. For drugs administered by physicians, which are covered under Part B, Medicare reimburses providers based on a formula set at 106% of the Average Sales Price (ASP), which is the average price to all non-federal purchasers in the U.S, inclusive of rebates (other than rebates paid under the Medicaid program).
  • Hospital outpatient departments: Medicare pays hospitals for ambulatory services provided in outpatient departments, using the Hospital Outpatient Prospective Payment System, based on the classification of individual services into Ambulatory Payment Classifications (APC) with similar characteristics and expected costs. Final determination of Medicare payments for outpatient department services is complex. It incorporates both individual service payments and payments “packaged” with other services, partial hospitalization payments, as well as numerous exceptions, such as payments for new technologies. Medicare payment rates for services provided in hospital outpatient departments are typically higher than for similar services provided in physicians’ offices, and evidence indicates that providers have shifted the billing of services to higher-cost settings. There is bipartisan interest in proposals to expand so-called “site-neutral” payments, meaning that Medicare would align payment rates for the same service across settings.
  • Skilled Nursing Facilities (SNFs): SNFs are freestanding or hospital-based facilities that provide post-acute inpatient nursing or rehabilitation services. Medicare pays SNFs based on the Skilled Nursing Facility Prospective Payment System, and payments to SNFs are determined using a base payment rate, adjusted for geographic differences in labor costs, case mix, and, in some cases, length of stay. Daily rates consider six care components – nursing, physical therapy, occupational therapy, speech–language pathology services, nontherapy ancillary services and supplies, and non–case mix (room and board services).

How Does Medicare Pay Private Plans in Medicare Advantage and Medicare Part D?

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Medicare Advantage. Medicare pays firms offering Medicare Advantage plans a set monthly amount per enrollee. The payment is determined through an annual process in which plans submit “bids” for how much they estimate it will cost to provide benefits covered under Medicare Parts A and B for an average beneficiary. The bid is compared to a county “benchmark”, which is the maximum amount the federal government will pay for a Medicare Advantage enrollee and is a percentage of estimated spending in traditional Medicare in the same county, ranging from 95 percent in high-cost counties to 115 percent in low-cost counties. When the bid is below the benchmark in a given county, plans receive a portion of the difference (the “rebate”), which they must use to lower cost sharing, pay for extra benefits, or reduce enrollees’ Part B or Part D premiums. Payments to plans are risk adjusted, based on the health status and other characteristics of enrollees, including age, sex, and Medicaid enrollment. In addition, Medicare adopted a quality bonus program that increases the benchmark for plans that receive at least four out of five stars under the quality rating system, which increases plan payments.

Generally, Medicare pays more to private Medicare Advantage plans for enrollees than their costs would be in traditional Medicare. The Medicare Payment Advisory Commission (MedPAC) reports that while it costs Medicare Advantage plans 83% of what it costs traditional Medicare to pay for Medicare-covered services, plans receive payments from CMS that are 120% of spending for similar beneficiaries in traditional Medicare, on average. The higher spending stems from features of the formula used to determine payments to Medicare Advantage plans, including setting benchmarks above traditional Medicare spending in half of counties and higher benchmarks due to the quality bonus program, resulting in bonus payments of at least $12.7 billion in 2025. This amount is four times greater than spending on bonus payments in 2015 (Figure 12).

Total Spending on Medicare Advantage Plan Bonuses Quadrupled Between 2015 and 2025 From At Least $3 Billion to $12.7 Billion

The higher spending in Medicare Advantage is also related to the impact of coding intensity, where Medicare Advantage enrollees look sicker than they would if they were in traditional Medicare, resulting in plans receiving higher risk adjustments to their monthly per person payments, translating to an estimated $84 billion in excess payments to plans in 2025.

Higher payments to Medicare Advantage plans allow them to offer extra benefits attractive to enrollees. However, these benefits come at a cost to all beneficiaries through higher Part B premiums – amounting to $13 billion in 2025 alone – and contribute to the strain on the Medicare Part A Hospital Insurance Trust Fund. (See “How Much Does Medicare Spend and How Is the Program Financed?” for additional information .)

Medicare Part D. Medicare pays Part D plans, both stand-alone prescription drug plans and Medicare Advantage plans that offer drug coverage, based on an annual competitive bidding process. Plans submit bids yearly to Medicare for their expected costs of providing the drug benefit plus administrative expenses. Plans receive a direct subsidy per enrollee, which is risk-adjusted based on the health status of their enrollees, plus reinsurance payments from Medicare for the highest-cost enrollees and adjustments for the low-income subsidy (LIS) status of their enrollees. (Unlike Medicare Advantage, there is no quality bonus program that provides higher payments to Part D plans with higher Part D quality ratings.) Risk-sharing arrangements with the federal government (“risk corridors”) limit plans' potential total losses or gains.

Under reinsurance, Medicare subsidizes 20% of total drug spending incurred by Part D enrollees with relatively high drug spending above the catastrophic coverage threshold, as of 2025, down from 80% in prior years, based on a provision of the Inflation Reduction Act. This provision was designed to shift more of the responsibility for catastrophic drug costs to Part D plans and drug manufacturers. Plans now pay 60% of total drug costs above the catastrophic threshold, up from 15% to 20% in prior years. (See “What Is the Medicare Part D Prescription Drug Benefit?” for more detail on plan liability under various phases of the Part D benefit and more information on changes to Part D included in the Inflation Reduction Act.) In the aggregate, Medicare’s reinsurance payments to Part D plans in 2025 are estimated to account for 18% of total Part D spending, down from close to half of total Part D spending (46%) in 2024 (Figure 13).

Spending for Catastrophic Coverage (“Reinsurance”) Accounted for Close to Half (46%) of Total Medicare Part D Spending in 2024, But Is Estimated to Decrease to 18% in 2025 as Inflation Reduction Act Changes to the Part D Benefit Take Effect

For 2025, Medicare’s actuaries estimate that Part D plans will receive direct subsidy payments averaging $1,855 per enrollee overall, $1,313 for enrollees receiving the LIS, and $517 in reinsurance payments for very high-cost enrollees.

What Is Medicare Doing to Promote Alternative Payment Models?

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While Medicare has traditionally paid providers on a fee-for-service basis, the program is implementing various alternative payment models designed to tie payments under traditional Medicare to provider performance on quality and spending. Although the overarching goals of these various models are similar—improving the quality and affordability of patient care, increasing coordination between care teams, and reducing health care costs—the specific aims vary by model.

A notable example of an alternative payment model within Medicare is the Medicare Shared Savings Program (MSSP), a permanent accountable care organization (ACO) program in traditional Medicare established by the Affordable Care Act (ACA) that offers financial incentives to providers for meeting or exceeding savings targets and quality goals. ACOs are groups of doctors, hospitals, and other health care providers who voluntarily form partnerships to collaborate and share accountability for the quality and cost of care delivered to their patients. The MSSP currently offers different participation options to ACOs, allowing these organizations to share in savings only or both savings and losses, depending on their level of experience and other factors.

ACOs have a defined patient population for the purpose of calculating annual savings or losses. Beneficiaries in traditional Medicare may choose to align themselves to an ACO (voluntary alignment) or may be assigned to a particular ACO based on where they received a plurality of their primary care services. In either case, beneficiaries are free to seek treatment from any provider who accepts Medicare and are not limited to ACO-affiliated providers. This contrasts with enrollment in Medicare Advantage, where beneficiaries are generally limited to seeing providers in their plan’s network or face higher out-of-pocket costs for seeing out-of-network providers.

In 2023, the Medicare Shared Savings Program saved Medicare an estimated $2.1 billion relative to annual spending targets. As of 2025, there are 476 MSSP ACOs nationwide, with over 643,000 participating clinicians and 10.8 million beneficiaries aligned to MSSP ACOs (Figure 14).

Medicare Shared Savings Program ACOs Are Operating in Every State and the District of Columbia

The ACA also established the Center for Medicare and Medicaid Innovation (CMMI, also known as the Innovation Center), an operating center within the Centers for Medicare & Medicaid Services tasked with designing and testing alternative payment models to address concerns about rising health care costs, quality of care, and inefficient spending within the Medicare, Medicaid, and CHIP programs. Since its start in 2010, CMMI has launched more than 80 models across six different categories, including accountable care models, disease-specific models, health plan models, and others (Figure 15). CMMI models are designed to be tested over a limited number of years, but Congress gave CMMI the authority to expand models nationwide permanently if they meet certain quality and savings criteria. As of the most recent estimate, six models have shown statistically significant savings, and four have met the requirements for permanent expansion into the wider Medicare program, including the Medicare Diabetes Prevention Program and the Home Health Value-Based Purchasing Model.

While the overall aims of CMMI are set in law, changes of administration have brought about changes in the strategic direction of the Innovation Center and the types of models that have been pursued, along with the reframing or termination of certain models from the previous administration. For example, the Biden administration placed a greater emphasis on health equity in CMMI models, while the second Trump administration is prioritizing evidence-based preventive care, empowering consumers with data and information to make health decisions, and promoting choice and competition in health care markets.

The Center for Medicare and Medicaid Innovation (CMMI) has Implemented Numerous Programs and Pilot Projects to Test New Payment Models

According to the Congressional Budget Office (CBO), the activities of CMMI increased federal spending by $5.4 billion from 2011 to 2020, which CBO attributes in part to the mixed success of many models at generating sufficient savings to offset their high upfront costs. (CBO had initially projected that CMMI would reduce federal spending by $2.8 billion in its first decade of operation.) However, evidence suggests that savings vary by model type, with the greatest savings found among state and community-based models. Further, a review of select CMMI models provides evidence of improvements in care coordination, team-based care, and other care delivery changes, even in the absence of savings. CBO projects that CMMI’s activities will come closer to the breakeven point regarding federal spending over the course of the current decade (2024-2033).

How Much Does Medicare Spend and How Is the Program Financed?

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Spending. Medicare plays a significant role in the health care system, accounting for 21% of total national health spending in 2023, a quarter of spending on both hospital care and physician and clinical services, and 32% of spending on retail prescription drug sales (Figure 16).

In 20222023, Medicare Accounted for 21% of Total National Health Spending

In 2024, Medicare spending, net of income from premiums and other offsetting receipts, totaled $910 billion and accounted for 13% of the federal budget — a similar share as spending on Medicaid, the ACA, and the Children’s Health Insurance Program combined, and defense spending (Figure 17).

In 2024, Medicare Spending Accounted for 13% of the Federal Budget

In 2025, Medicare benefit payments are estimated to total $1.1 trillion, up from $632 billion in 2015 (including spending for Part A, Part B, and Part D benefits in both traditional Medicare and Medicare Advantage). Medicare spending per person has also grown, increasing from $5,800 to $16,700 between 2000 and 2023 – or 4.7% average annual growth over the 23-year period. In recent years, however, growth in spending per person has been lower in Medicare than in private health insurance .

Spending on Medicare Part A benefits (mainly hospital inpatient services) has decreased as a share of total Medicare spending over time as care has shifted from inpatient to outpatient settings, leading to an increase in spending on Part B benefits (including physician services, outpatient services, and physician-administered drugs). Spending on Part B services now accounts for the largest share of Medicare benefit spending (50% in 2024) (Figure 18). Moving forward, Medicare spending on physician services and other services covered under Part B is expected to grow to more than half of total Medicare spending by 2034, while spending on hospital care and other services covered under Part A is projected to decrease further as a share of the total.

Spending on Physician Services and Other Medicare Part B Services Now Accounts for the Largest Share of Total Medicare Benefits Spending

Payments to Medicare Advantage plans for Part A and Part B benefits tripled as a share of total Medicare spending between 2014 and 2024, from $156 billion to $462 billion, partly due to steady enrollment growth in Medicare Advantage plans. Growth in spending on Medicare Advantage also reflects that Medicare pays more to private Medicare Advantage plans for enrollees than their costs in traditional Medicare, on average. (See “How Does Medicare Pay Private Plans in Medicare Advantage and Medicare Part D?” for additional information.) These higher payments have contributed to growth in spending on Medicare Advantage and overall Medicare spending. In 2024, half of all Medicare program spending for Part A and Part B benefits was for Medicare Advantage plans, up from just under 30% in 2014. Between 2024 and 2034, Medicare Advantage payments are projected to total close to $9 trillion, $2.5 trillion more than spending under traditional Medicare (Figure 19).

Medicare Advantage Payments are Projected to Total Close to $9 Trillion Between 2024 and 2034, $2.5 Trillion More than Spending Under Traditional Medicare

Financing. Medicare funding, which totaled $1.1 trillion in 2024, comes primarily from government contributions (44%), payroll tax revenues (35%), and premiums paid by beneficiaries (15%). Other sources include taxes on Social Security benefits, payments from states, and interest.

The different parts of Medicare are funded in varying ways, and revenue sources dedicated to one part of the program cannot be used to pay for another part (Figure 20).

Medicare Revenues Come from Different Sources, Primarily Government Contributions, Payroll Taxes, and Premiums Paid by Beneficiaries
  • Part A, which covers inpatient hospital stays, skilled nursing facility (SNF) stays, some home health visits, and hospice care, is financed primarily through a 2.9% tax on earnings paid by employers and employees (1.45% each). Higher-income taxpayers (more than $200,000 per individual and $250,000 per couple) pay a higher payroll tax on earnings (2.35%). Payroll taxes accounted for 88% of Part A revenue in 2024.
  • Part B, which covers physician visits, outpatient services, preventive services, and some home health visits, is financed primarily through a combination of government contributions (72% in 2024) and beneficiary premiums (26%) (and 2% from interest and other sources). The standard Part B premium that most Medicare beneficiaries pay is calculated as 25% of annual Part B spending, while beneficiaries with annual incomes over $106,000 per individual or $212,000 per couple pay a higher, income-related Part B premium reflecting a larger share of total Part B spending, ranging from 35% to 85%.
  • Part D, which covers outpatient prescription drugs, is financed primarily by government contributions (75%) and beneficiary premiums (13%), with an additional 12% of revenues coming from state payments for beneficiaries enrolled in both Medicare and Medicaid. Higher-income enrollees pay a larger share of the cost of Part D coverage, as they do for Part B.
  • The Medicare Advantage program (sometimes referred to as Part C) does not have its own separate revenue sources. Funds for Part A benefits provided by Medicare Advantage plans are drawn from the Medicare HI trust fund. Funds for Part B and Part D benefits are drawn from the Supplementary Medical Insurance (SMI) trust fund. Beneficiaries enrolled in Medicare Advantage plans pay the Part B premium and may pay an additional premium if required by their plan. In 2025, 76% of Medicare Advantage enrollees pay no additional premium.

Measuring the level of reserves in the Medicare Hospital Insurance trust fund, out of which Part A benefits are paid, is a common way of measuring Medicare's financial status. Each year, Medicare’s actuaries provide an estimate of the year when the reserves are projected to be fully depleted. In 2025, the Medicare Trustees projected sufficient funds would be available to pay for Part A benefits in full until 2033, 8 years from now – three years earlier than the 2024 projection. At that point, in the absence of Congressional action, Medicare will be able to pay 89% of costs covered under Part A using payroll tax revenues. At the same time, the Congressional Budget Office has recently updated its projection of the Part A trust fund, extending the year of trust fund depletion to 2052, based on changes in its projections of Part A spending and revenues and a change in CBO’s modeling related to graduate medical education payments. OACT projects both lower income and higher spending under Part A than CBO, as well as faster Part A spending growth, which helps to account for the difference in the projected HI trust fund depletion dates.

Since 2010, the projected year of trust fund reserve depletion, based on projections by Medicare’s actuaries, has ranged from 5 years out (in 2021) to 19 years out (in 2010) (Figure 21).

The Medicare Hospital Insurance Trust Fund Reserves Are Projected to Be Depleted in 2033, Based on a Projection by Medicare's Actuaries

The level of reserves in the Part A Trust Fund is affected by growth in the economy, which affects revenue from payroll tax contributions, health care spending and utilization trends, and demographic trends: an increasing number of beneficiaries as the population ages, especially between 2010 and 2030 when the baby boom generation reaches Medicare eligibility age, and a declining ratio of workers per beneficiary making payroll tax contributions. 

Part B and Part D do not have financing challenges similar to Part A, because both are funded by beneficiary premiums and government contributions that are set annually to match expected outlays. However, future increases in spending under Part B and Part D will require increases in government (and taxpayer) funding and higher premiums paid by beneficiaries.

Future Outlook

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Looking to the future, Medicare faces a number of challenges from the perspective of beneficiaries, health care providers and private plans, and the federal budget. These include:

  • How best to address the fiscal challenges arising from an aging population and increasing health care costs through spending reductions and/or revenue increases.
  • Whether and how to improve coverage for Medicare beneficiaries, including an out-of-pocket limit in traditional Medicare, enhanced financial support for lower-income beneficiaries, and additional benefits, such as dental and vision.
  • How to control spending while ensuring fair and adequate payments to hospitals, physicians and other providers, and Medicare Advantage plans, including whether and how to reduce overpayments to Medicare Advantage plans.
  • How to address the implications for traditional Medicare of the predominant role that Medicare Advantage now plays in covering Medicare beneficiaries.

Any potential changes to Medicare to address these challenges could have implications for federal spending and taxpayers, the solvency of the Medicare Hospital Insurance trust fund, total health care spending, the affordability of health care for Medicare’s growing number of beneficiaries, many of whom have limited incomes, and access to high-quality medical care.

Resources

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Citation

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Cubanski, J., Freed, M., Ochieng, N., Cottrill, A., Fuglesten Biniek, J., & Neuman, T., Medicare 101. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-medicare/ (date accessed).

The Average Medicare Beneficiary has 28 Medicare Advantage Prescription Drug Plan Options for 2027

Published: Oct 1, 2026

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) published information about the Medicare Advantage plans that will be available for the coming 2027 plan year. Starting October 1st, insurers, brokers, and other third-party entities can market Medicare Advantage plans, and during the annual open enrollment period, which runs from October 15th through December 7th, Medicare beneficiaries can make changes to their Medicare coverage for the coming year. In a press release, CMS emphasized stability in the Medicare Advantage marketplace overall. This analysis explores Medicare Advantage plan availability for the average beneficiary and at the state level.

KFF’s analysis of plan offerings shows that, on average, Medicare beneficiaries will have the option of 28 Medicare Advantage prescription drug (MA-PD) plans in 2027, a decline from the 32 options available in 2026 (excluding employer plans and special needs plans not available for general enrollment). The number of MA-PD options grew steadily between 2010 and 2024, reaching a peak of 36 options for the average Medicare beneficiary in 2024. The number of options available for 2027 will be higher than the number available in 2021 (27) and every year before (Figure 1).

The Average Medicare Beneficiary has 28 Medicare Advantage Prescription Drug Plan Options in 2027 (Stacked Bars)

Across all Medicare Advantage plans for general enrollment, including those with and without prescription drug coverage, the average Medicare beneficiary can choose from among 35 plans in 2027, compared to 39 plans in 2026. Similar to the trend for MA-PDs, the total number of Medicare Advantage plans available to the average beneficiary is higher than the average number of plans available in every year between 2010 and 2021. While Medicare Advantage plans are required to cover all Medicare Part A and Part B benefits, plans decide whether to include Part D prescription drug coverage as part of the benefit package. Enrollees may pay a separate premium for Part D coverage, or plans can use the rebate portion of their payment from the federal government to cover these costs. Most Medicare Advantage enrollees are in plans that include prescription drug coverage and most pay no premium beyond the Part B premium.

The modest decrease in the number of Medicare Advantage plans available to the average beneficiary means that some Medicare beneficiaries will find that their current coverage is no longer an option for next year. In most cases, these beneficiaries live in counties where they will continue to have robust Medicare Advantage plan options available for 2027, as well as traditional Medicare. Some beneficiaries in plans that have exited the market will have the option to enroll in a plan offered by the same insurer, and in many cases, enrollees will be moved into a new plan offered by the same insurer automatically if the contract includes another plan of the same type (i.e., HMO or PPO) in the same county. Others will have to make an active choice about their Medicare coverage if they wish to enroll in another Medicare Advantage plan or will be automatically covered by traditional Medicare.

The number of Medicare Advantage plans with prescription drug coverage available to the average beneficiary varies across states (Figure 2). In 26 states and Puerto Rico, the average Medicare beneficiary has at least 20 MA-PD options in 2027, including 3 states (PA, MI, and OH), where the average beneficiary has at least 40 MA-PD options. In 9 states and DC, the average Medicare beneficiary has fewer than 10 MA-PD options in 2027. This includes Alaska, which has no plans available in 2027, as in 2026 (Alaska has historically had few or no Medicare Advantage plans available for general enrollment). Connecticut is not included in this calculation because of differences in how counties are reported across CMS enrollment and plan files.

Medicare Advantage Prescription Drug Plan Options for the Average Beneficiary Vary Widely, With 20 or More Options Available in More Than Two Dozen States (Choropleth map)

Across most states, the average beneficiary will have fewer Medicare Advantage plan options in 2027 compared to 2026. The states with the largest drop in the number of MA-PDs available for general enrollment are Texas (-9), Illinois and Ohio (-8), and Minnesota, New Mexico, and Washington (-7). In nine states beneficiaries will have the same number of MA-PD options in 2027 as in 2026 (excludes Alaska where no MA-PDs are available in 2026 or 2027), and in four states beneficiaries will have more options (Figure 3).

Number of Medicare Advantage Plans Available to the Average Medicare Beneficiary in 2026 and 2027, by State (Table)

Choosing how to receive Medicare benefits remains a challenge for Medicare beneficiaries. Beyond the number of plans available, every year there are changes to Medicare Advantage plan benefits and costs, including the scope and generosity of extra benefits, cost sharing for Medicare-covered benefits, out-of-pocket limits, rules for using covered services (such as referral requirements and prior authorization), drug formularies, and provider networks. (These data are released separately by CMS and a comprehensive analysis from KFF will follow.) Despite these changes, most Medicare beneficiaries report that they do not compare coverage options on an annual basis. Further, prior Medicare focus groups indicate that Medicare enrollees are often overwhelmed by the number of Medicare Advantage choices and have difficulty sorting through all plan options. With more than two dozen MA-PDs available in 2027, on average, and year-to-year changes in benefits and costs, understanding how plans differ and how these differences could affect costs and access remains a challenge for beneficiaries.

What Are the Recent Trends in Health Sector Employment

Authors: Emma Wager, Imani Telesford, Paul Hughes-Cromwick, and Lynne Cotter
Published: Sep 30, 2026

This updated chart collection uses federal labor data to compare jobs and wages in the health care sector with the rest of the economy. Health sector employment has grown steadily while job growth in other non-farm sectors has plateaued. Over the past year, the health sector added 378,500 jobs—a 2% increase—compared with 0.2% growth in non-health, non-farm employment. Health care wage growth has slowed slightly compared to other industries over the past three years.

Health care jobs now account for 11.6% of all non-farm jobs, up from 10.7% a decade ago. Since 1990, health sector employment has grown over three times as much as all other non-health, non-farm employment sectors, increasing most in outpatient settings (up 40% since August 2016.)

The chart collection is 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

The Legal and Policy Landscape of Crisis Pregnancy Centers 

Published: Sep 30, 2026

Key Takeaways

  • There are an estimated 2,400 to 2,800 Crisis Pregnancy Centers (CPCs) in the US. These sites, also referred to as Pregnancy Centers, are established to dissuade pregnant people from seeking abortion care and are often associated with or established by faith-based or anti-abortion organizations. They usually attract clients by offering free pregnancy tests, ultrasounds, and material goods like diapers or clothing.  
  • CPCs largely lack oversight of how they handle client data, and clients have limited remedies if their data is leaked. While CPCs typically advertise or position themselves as medical clinics, the vast majority are not medical facilities. CPCs usually collect confidential health information from clients like pregnancy status or sexual history, but they are not subject to the federal medical privacy law known as the Health Insurance Portability and Accountability Act (HIPAA) because they do not bill insurance for their services or electronically transmit claims.  
  • Attempts to regulate CPCs have largely been unsuccessful in the courts. Citing CPC’s First Amendment protections, multiple courts, including the U.S. Supreme Court, have sided with CPCs against attorney general investigations, state laws designed to regulate CPCs, and private-sector actions to inform the public about their anti-abortion mission.  
  • In response to these legal challenges and with support from the Alliance Defending Freedom, a conservative Christian legal advocacy organization, some states have enacted legislation prohibiting state governments from interfering with the expression and association rights of CPCs or restricting CPCs’ ability to provide certain services.  
  • On the federal side, the Trump administration and anti-abortion legislators have prioritized CPC expansion. On Mother’s Day 2026, HHS established a new website, moms.gov, and it spotlights CPCs as a resource for pregnant people without identifying their anti-abortion mission and limited provision of services. The administration also opened the door to the possibility of extending federal funding support to CPCs through the federal Title X family planning program, through the program’s most recent funding guidelines, even though CPCs do not provide contraceptive services or supplies. 

Introduction

On Mother’s Day 2026, the Trump administration launched moms.gov, a website designed as a resource for mothers and their families. At the top of the page, the website features a link to a non-government website that helps locate “pregnancy centers,” also known as Crisis Pregnancy Centers (CPCs), as a resource for support, and positions CPCs alongside Federally Qualified Health Centers, nutrition facts, and guidance on opening Trump investment accounts. While there is no standard definition of what qualifies as a CPC, these unregulated sites typically are associated with or established by faith-based or anti-abortion organizations, with their primary mission being to dissuade pregnant people from seeking abortion care. This brief examines the legal status of CPCs, attempts to regulate them, and future efforts to expand their footprints as they gain more recognition and funding from local, state, and federal programs.

What Are Crisis Pregnancy Centers and How Do They Attract Clients 

CPCs have their origins in the 1960s in the early days of the antiabortion movement. They usually offer pregnancy tests, ultrasound, and material goods like diapers or clothing to support pregnant clients at no cost. However, these services are sometimes conditioned on clients attending religious seminars. According to the U.S. Government Accountability Office as of 2025, between 2,400 and 2,800 CPCs were operating across the country, and most of them were affiliated with three anti-abortion organizations — Heartbeat International, National Institute for Family and Life Advocates (NIFLA), and Care Net. Post-Dobbs, the number of newly opened or reopened CPCs has been highest in the South, which is also where more states ban the provision of abortion or impose early gestational limits on the provision of abortion care. 

Box 1: Major Crisis Pregnancy Center Networks

There are three main national organizations that support Crisis Pregnancy Centers in the United States. Their membership figures overlap and may include maternity homes, adoption agencies, and “abortion recovery programs” as affiliates. Therefore, the total number of affiliates for these three organizations is much higher than the GAO’s estimate of 2400 to 2800 CPCs operating in the U.S. in 2025. 

Heartbeat International

  • Founded in 1971 as Alternatives to Abortion, its stated mission is to “advance life-affirming pregnancy help worldwide.” Heartbeat International describes their pregnancy centers as: “life-affirming non-profit service providers that provide women who have an unexpected pregnancy with alternatives to abortion.” 
  • Heartbeat International states it has over 1,445 affiliate “medical pregnancy centers” in the United States, and has an estimated 4,000 affiliates globally, including pregnancy centers, maternity homes, and adoption agencies.  

National Institute of Family and Life Advocates (NIFLA)

  • Founded in 1993, NIFLA’s mission is to: “promote the sanctity of human life, born and unborn, through legal support, counsel, and services to pro-life pregnancy centers.” NIFLA reports that they represent over 1,800 pregnancy centers nationwide.  
  • NIFLA created the Institute in Limited Obstetric Ultrasound, which trains medical professionals to perform ultrasounds in their affiliate clinics, to reach “abortion-minded women.” NIFLA has worked over the past two decades to introduce ultrasound services to pregnancy centers.

Care Net  

  • Founded in 1975, Care Net’s stated mission is: “to offer compassion, hope, and help to anyone considering abortion by presenting them with realistic alternatives and Christ-centered support through our life-affirming network of pregnancy centers, mobile medical units, churches, organizations, and individuals.” Care Net reports it has over 1,200 affiliates nationwide. 

The main purpose of CPCs is to dissuade people from opting for abortion, instead encouraging them to choose adoption or parenting using a variety of approaches to reach individuals whom they call “abortion-determined” clients. For years, CPCs have opened near reproductive health facilities, a practice known as “co-locating,” so they can approach patients attempting to visit abortion clinics and discourage them from seeking or obtaining abortion care. The American College of Obstetricians and Gynecologists has stated, “by using deception, delay tactics, and disinformation, CPC staffs undermine the tenets of informed consent and patient autonomy and impede access to comprehensive, ethical care.” In addition to co-locating near comprehensive reproductive health clinics, CPCs position themselves as attractive to young people, people with low incomes, people who are uninsured or underinsured, people experiencing unintended pregnancies, and communities that have historically experienced barriers to health care.  

In 2024, over 71% of CPCs nationwide offered nondiagnostic ultrasounds, 28% advertised testing for Sexually Transmitted Infections (STIs), and 6% advertised HIV testing. As hospital labor and delivery units close and OB-GYN practitioners leave states like Idaho that ban the provision of abortion care, several CPCs have begun to see increased foot traffic. However, CPCs will not be able to fill persistent and growing gaps in the maternity care safety net for a variety of reasons, including their requirements for recruiting qualified clinicians. For example, the 7B Care Clinic, a CPC, on the Idaho-Washington border, recently sought to provide prenatal services due to the recent closure of the local hospital’s labor and delivery unit. 7B created a contract with a rural Washington hospital to bring qualified clinicians into the center to see clients; however, the center required potential clinicians to sign a pledge that aligned with Christian values. The contract with the hospital was subsequently canceled when providers refused to sign the pledge, thus leaving 7B with no ability to expand prenatal services.  

Most Crisis Pregnancy Centers Are Not Medical Clinics

Although Crisis Pregnancy Centers either advertise or position themselves as medical clinics, the vast majority are not medical facilities. While CPCs offer a variety of services, including ultrasounds, and some advertise the ability to rule out conditions like an ectopic pregnancy, many CPCs do not have a credentialed or practicing qualified physician or a registered nurse affiliated with their center. CPCs that have a trained clinician affiliated with their center may employ them only on a part-time or volunteer basis.  

Although some CPCs may offer limited medical services that are already available over the counter to consumers, such as pregnancy and STI testing, other clinics offer ultrasounds as a tool to persuade patients not to seek an abortion rather than as a diagnostic test. CPCs are sometimes staffed by volunteers with limited or no medical training, and because only a medical professional with specialized training can interpret ultrasounds or assess fetal health, the ultrasounds performed by CPCs are largely considered non-diagnostic. Instead, ultrasounds at CPCs are used as a persuasive tool to show pregnant clients their fetus. These nondiagnostic ultrasounds can lead to inaccurate gestational age calculations or missed pregnancy complications such as ectopic pregnancy.  

The misdiagnosis of serious medical conditions by CPCs has resulted in several lawsuits against the centers. Some CPC networks have instructed their affiliates to avoid offering ultrasounds to clients suspected of having serious medical conditions like an ectopic pregnancy. Recently, a non-profit group compiled a list of CPCs that advertise their ability to “rule out” ectopic pregnancies, even though these centers lacked the medical expertise and equipment to properly diagnose an ectopic pregnancy. In Massachusetts, a class-action lawsuit was filed against Clearway Clinic, a CPC, after the clinic failed to diagnose a woman’s ectopic pregnancy. In response, Massachusetts enacted a law regulating who may perform pregnancy-related ultrasounds. Under the new law, a person may not provide ultrasound services related to a possible or actual pregnancy unless supervised by a licensed health care provider who, acting within their scope of practice, provides medical care to people who are pregnant or may become pregnant.  

Other states have also enacted similar laws regulating the provision of ultrasound services. In the state of Washington, all ultrasounds must be performed only under the supervision of a licensed health care professional acting within their scope of practice. Connecticut similarly has a law that prevents a person from performing an ultrasound unless it was ordered by a health care provider acting within their scope of practice for a medical or diagnostic purpose. Only four states (New Hampshire, New Mexico, North Dakota, and Oregon) require providers of ultrasounds to have a license issued and regulated by the state. 

Ultrasound licensing statutes make it illegal for someone without a medical imaging license to perform ultrasounds. In practice, however, there is not a consistent enforcement mechanism to hold unlicensed individuals accountable for providing ultrasounds. North Dakota’s own licensing board acknowledges it has no jurisdiction over unlicensed individuals, and New Hampshire has also not taken any action against unlicensed volunteers performing ultrasounds at some CPCs, leaving enforcement to criminal prosecutors who thus far have not pursued it. This is in sharp contrast to states like California, where the attorney general has used subpoena power and cease-and-desist authority against CPCs to enforce violations of California law, which requires ultrasound technology to be used only in licensed facilities or by licensed providers.  

Most Crisis Pregnancy Centers Are Not Subject to HIPAA, the Federal Health Privacy Law  

Crisis Pregnancy Centers collect confidential health information from clients; however, they are not required to adhere to medical privacy regulations. The Health Insurance Portability and Accountability Act (HIPAA) privacy rule is a federal standard prohibiting medical entities from disclosing confidential health information without patient consent. Coveredentities subject to the HIPAA Privacy Rule are defined as: (1) health care providers; (2) health plans (insurance companies); and (3) health care clearinghouses that transmit patient health information in connection with health care transactions. A health care transaction is an exchange of information to conduct financial or administrative activities related to health care, such as processing payment for services.  

While some CPCs work with health care providers, neither the centers nor the providers who work or volunteer there are considered covered entities bound by HIPAA if they do not conduct health care transactions, such as billing insurance. Most CPCs do not charge for their services, nor do they accept insurance. Instead, CPCs are funded through private donations, national CPC networks, state government funds, and federal funds through programs like Temporary Assistance for Needy Families (TANF). It is estimated that CPCs received over $2 billion in revenue in 2024; however, none of this was generated from charging clients. CPCs’ variety of funding sources allows them to offer their services without needing to conduct health care transactions.  

Data Privacy Violations at Crisis Pregnancy Centers Often Escape Regulatory Enforcement 

Some CPCs have misled clients about the safety of their confidential personal information by including notices on their website, alleging HIPAA compliance, or by requiring clients to sign authorization forms. However, these steps can give clients a false sense of confidentiality: because CPCs are not bound by HIPAA, there is no oversight of how they handle client data, and clients have limited remedies if that data is leaked. In 2024, it was reported that Heartbeat International, one of the largest CPC networks, posted on the internet a training video with the full names, date of last menstrual period, and services received by clients of one of its affiliate centers in Louisiana. The breach of client health information was reported to the Department of Health and Human Services Office for Civil Rights (OCR), the entity responsible for enforcing HIPAA. However, OCR closed the complaint after determining that the CPC was not a HIPAA-covered entity and that it therefore lacked authority to investigate the violation, leaving the affected clients without recourse and no penalties for Heartbeat International. In contrast, violations of HIPAA for covered entities can lead to criminal penalties and fines of up to $2 million per violation based on the severity of the data breach and whether the entity took corrective action.  

Additionally, there is currently no enforcement mechanism to stop organizations not bound by HIPAA from falsely claiming HIPAA compliance. While entities like the Federal Trade Commission (FTC) work to protect consumers from fraud and deception, they only have authority over businesses and other for-profit organizations, not non-profits. Therefore, because clients at CPCs receive services for free, CPCs fall outside the FTC’s jurisdiction. Some advocacy groups have submitted complaints to state attorneys general urging investigations into CPCs that misrepresented their HIPAA compliance, and some centers subsequently removed HIPAA-compliance language from their websites. However, CPCs continue to collect client medical information with little accountability for protecting privacy. 

Courts Have Shielded CPCs from State Oversight

Across multiple states, courts have consistently sided with CPCs against attorney general investigations and private-sector pushback, citing First Amendment protections. 

Compelled Notice Requirements

NIFLA v. Becerra (CA, 2018): California’s FACT Act required CPCs to post notices about state-funded family planning services (for licensed clinics) or disclose their unlicensed status (for unlicensed clinics, closely matching CPCs). NIFLA sued, and after losing at the district court and Ninth Circuit, won at the Supreme Court. 

Outcome: The Supreme Court struck down both notice requirements as unconstitutional compelled speech, establishing the foundational precedent that state governments cannot force CPCs to disclose licensing status or promote state services. Later cases rely on this Supreme Court ruling as precedent.

Abortion Pill Reversal Claims  

NIFLA v. James (NY, 2024- ongoing): Attorney General Letitia James sued Heartbeat International and 11 CPCs under New York’s deceptive trade practice statute, alleging their abortion pill reversal advertising misrepresented the treatment as safe and effective.  

Outcome: This underlying case is still pending, but a related ruling in NIFLA v. James (described below) has weakened the state’s position going forward. 

NIFLA v. James (NY, 2024): In response to the suit above, NIFLA and two New York CPCs filed a separate countersuit against James, arguing her enforcement effort to prevent CPCs from advertising abortion pill reversal chilled their speech and discriminated against them for their pro-life views.  

Outcome: The Second Circuit affirmed a preliminary injunction protecting NIFLA and the 11 CPCs, holding the First Amendment allows CPCs to promote abortion pill reversal, a precedent likely to help Heartbeat International defend the still-pending case above. 

California v. Heartbeat International (2023–ongoing): Attorney General Rob Bonta filed a lawsuit against Heartbeat International for their promotion of abortion pill reversal. The false-advertising suit survived a First Amendment summary judgment challenge, and there was a 6-week trial which began in June 2026 in Alameda County; closing arguments were held on September 17, 2026. 

Outcome: Still unresolved, but it is one of the few cases where a state’s claims have proceeded to trial rather than being blocked outright. California requires state judges to issue a ruling within 90 days after the case is officially submitted for decision. 

Investigative Subpoenas 

First Choice v. Platkin (NJ, 2002-2026): Attorney General Matthew Platkin subpoenaed a CPC for donor, donation, and data-handling records amid fraud allegations.  

Outcome: In 2026, the Supreme Court ruled that compelling disclosure of CPC donor identities violates associational First Amendment rights, since such demands can chill donors from supporting the group. While the Court’s decision did not fully extinguish the attorney general’s subpoena, it established First Amendment protections for CPCs that lower courts must now follow. This could make it harder for states to subpoena records of CPCs’ donors, volunteers, board members, or clients during investigations.

Private Sector Pushback

Yelp v. Paxton (TX, 2023–ongoing): Attorney General Ken Paxton sued Yelp on CPCs’ behalf over its consumer notices describing CPCs’ limited medical services, alleging misrepresentation under Texas law. A Bastrop County court initially dismissed the case for lack of jurisdiction (Feb. 2024), but the Texas 15th Court of Appeals reversed in October 2025, holding Texas courts do have jurisdiction; Yelp has appealed to the Texas Supreme Court.  

Outcome: This case is ongoing and, unlike the other cases, does not turn on CPCs’ own First Amendment rights. This case demonstrates that private companies criticizing CPCs can themselves face sustained legal exposure from CPC-supportive state governments. 

State Laws Limiting Regulations of Crisis Pregnancy Centers  

Recently, the Alliance Defending Freedom, a conservative Christian legal advocacy organization, has pushed for states to enact their model legislation protecting CPCs. The Center Autonomy and Right of Expression (CARE) Act prohibits state governments from interfering with the First Amendment free expression and association rights of CPCs or restricting their ability to provide pregnancy services because they do not counsel for, or offer, abortions or contraception. The CARE Act has passed in at least four states, including Kansas, Montana, Oklahoma, and Wyoming, providing CPCs protection from regulation. In Wyoming, for example, government entities are prohibited from: (1) requiring CPCs to perform abortions; (2) requiring CPCs to provide medication abortion or contraception; (3) requiring CPCs to refer clients for abortion or contraception; or (4) requiring CPCs to counsel in favor of abortion or contraception. Beyond the First Amendment protections, the CARE Act further restricts states’ ability to regulate CPCs.  

Looking Ahead 

With the launch of moms.gov and other proposed policies to promote fertility, Crisis Pregnancy Centers may gain greater attention and potentially increased federal funding in the coming years. Obria, one CPC chain with sites in five states, has begun to expand their medical offerings to position its centers as an alternative to national abortion providers like Planned Parenthood. From 2022 to 2025, twenty-one states provided $491 million in funding to CPCs, not including funds allocated through federal programs like Temporary Assistance for Needy Families (TANF). In 2019, the first Trump administration awarded Obria, a chain of CPCs that opposes abortion and contraception, $1.7 million of funding under Title X, a program designed to provide free or reduced-cost family planning services to low-income and uninsured people.  

In July 2026, the Trump administration released its revised Fiscal Year 2027 Notice of Funding Opportunity (NOFO) for Title X. The NOFO stated that the Trump administration would prioritize grantee applications that “reduce overmedicalization by strengthening approaches focused on underlying behavioral and lifestyle factors of health and evidence-based practices such as fertility-awareness based methods; promote health and body literacy; advance reproductive goals counseling for all clients; and support family formation.” In response, the National Family Planning and Reproductive Health Association (NFPRHA), Planned Parenthood Federation of America, and 23 States (CA, CO, CT, DE, HI, IL, KY, ME, MD, MA, MI, MN, NV, NJ, NM, NY, OR, PA, RI, VT, VA, WA, WI) have each filed lawsuits challenging the FY 2027 NOFO, arguing that its priorities depart from the factors Congress intended HHS to consider in awarding Title X grants and instead impose politically driven, vaguely defined criteria that disadvantage qualified applicants.  

These new priorities could re-open the door for CPCs to receive Title X funds in addition to ongoing efforts by anti-abortion states to invest more resources into these centers. As states and the federal government continue to direct funds into CPCs, challenges and gaps in regulating these centers will likely persist, driven by First Amendment protections and a growing body of state laws designed to shield them from oversight. 

Early Medicaid Work Requirement Insights From Nebraska

Published: Sep 29, 2026

On May 1, 2026, Nebraska became the first state to enforce new Medicaid work requirements. The 2025 reconciliation law requires states to condition Medicaid eligibility for adults in the ACA Medicaid expansion group and enrollees in certain waiver programs (such as in Georgia and Wisconsin) on meeting work requirements or exclusion criteria starting January 1, 2027; however, states have the option to implement requirements sooner (as is the case for Nebraska). KFF analysis shows most Medicaid adults under age 65 are working already (without a requirement) or face barriers to work. This brief describes the verification process for Medicaid work requirements in Nebraska and examines early data from Nebraska’s September Medicaid Advisory Committee (MAC) meeting on outcomes for individuals subject to work requirements, including for those newly applying for Medicaid as well as those renewing Medicaid coverage through August 2026. Data show that among those subject to the new work requirements:

  • 46% of new applicants and 34% of individuals renewing coverage met qualifying activities (e.g., working at least 80 hours a month, having a monthly household income of at least $580, attending school).
  • 39% of new applicants and 57% of individuals renewing coverage qualified for an exclusion from work requirements (e.g., due to being a parent of a child under age 14, being medically frail).
  • 14% of new applicants and 7% of individuals renewing coverage had their applications denied or lost coverage due to not meeting work requirements.
  • Only a small number of people (2% of new applicants and 2% of individuals renewing coverage) had a short-term hardship exception.

What is the verification process for Medicaid work requirements in Nebraska?

Nebraska is using a combination of available data and self-declaration forms to verify whether individuals meet work requirements or exclusion criteria; the state has also adopted temporary hardship exceptions. In cases where the state can automatically verify that individuals meet work requirements, it sends an approval notice. For individuals where the state does not have enough information, the state sends a notice describing the additional information that is required and a declaration form that must be returned within 30 days. Individuals can use the declaration form to attest that they met qualifying activities or that they meet the criteria for an exclusion from the requirements. The interim rule clarified that while states are allowed to accept self-declaration through 2027, starting in January 2028, except for medical frailty, states must request documentation from individuals when the state does not have data on file. Nebraska has also chosen to adopt optional short-term hardship exceptions for enrollees (or applicants) experiencing certain extenuating circumstances, including residing in counties with high unemployment rates or experiencing natural disasters, individuals admitted to a hospital or nursing facility, or those who must travel outside of their community for an extended period to obtain medical care for themselves or a dependent.

Qualifying Activities and Exclusions from Work Requirements

Adults must meet qualifying activities or exclusion criteria to enroll in Medicaid and maintain coverage. Qualifying activities include:

  • Working at least 80 hours a month;
  • Having a monthly household income of at least $580;
  • If a seasonal worker, having an average monthly income over 6 months of minimum wage multiplied by 80 hours;
  • Attending school half time;
  • Volunteering or participating in a work program for at least 80 hours a month; or
  • Doing a combination of activities for at least 80 hours per month.

Exclusions from the work requirements include:

  • Pregnant and postpartum individuals;
  • American Indian and Alaska Natives;
  • Parents and caretakers of dependent children under age 14 or disabled individuals;
  • Veterans with a disability;
  • Incarcerated individuals;
  • Individuals receiving SNAP and not exempt from SNAP work requirements; and
  • People who are medically frail.

States must first determine if an individual is excluded from the Medicaid work requirements before assessing if an individual meets the qualifying activities. Some individuals who meet exclusion criteria may also be working.

What are the initial data on Nebraska Medicaid application and renewal outcomes?

Among those who were newly applying for Medicaid and subject to the new work requirements in Nebraska, 86% of applicants met the work requirements or qualified for an exclusion or short-term hardship exception, while 14% of individuals had their application denied (Figure 1). A total of 9,614 applications were processed between May to August. Of these, some were submitted prior to May and therefore not subject to work requirements, and 4,434 were denied for reasons other than work requirements (e.g., income exceeding Medicaid eligibility thresholds). Among the remaining 4,089 applications subject to work requirements:

  • Nearly half of all individuals (46%) met the qualifying activities. Among those who met the requirement, the vast majority of people (92%) worked 80 or more hours in the month prior to their application or had a household income of $580. A much smaller share (8%) were enrolled in an education program or work program, volunteered, or met requirements by combining hours across multiple types of qualifying activities.
  • About 4 in 10 individuals (39%) qualified for an exclusion. Of these applicants, one-third were parents or caregivers of a child under the age of 14 or a disabled individual (33%); one quarter were medically frail, and 12% were an American Indian or Alaska Native. The remaining 30% qualified for other exclusions. Because the state is relying on self-attestation, future documentation requirements may lead to a lower share of individuals who qualify for an exclusion.
  • Only a small number of individuals had a short-term hardship exception. Only 92 individuals met the criteria for short-term hardship exceptions, with the majority of these being individuals who required temporary use of medical services or living in counties that were exempted due to high unemployment.
  • 14% of individuals had their application denied. Most of the 557 denied applications were due to non-response to requests for additional information (84%); only 16% of applicants with denied applications were affirmatively found to be noncompliant.
Nebraska Application Outcomes Among Individuals Subject to Medicaid Work Requirements (Pie Chart)

Among those who were renewing their Medicaid coverage and subject to the new work requirements, 93% met work requirements or qualified for an exclusion or short-term hardship exception and had their coverage renewed, while 7% of enrollees lost coverage (Figure 2). A total of 7,280 renewals subject to work requirements were processed between July and mid-August. Other expansion enrollees determined ineligible and disenrolled at renewal for reasons not related to work requirements (e.g., moving out of state or exceeding income eligibility) are not shown in the figure below.

  • Over half (57%) of individuals renewing their coverage qualified for an exclusion from the requirements. Medically frail individuals (39%) and parent/caregivers (31%) made up the majority of those who met an exclusion. States are more likely to have medical claims history for individuals renewing coverage than new applicants, meaning Nebraska may have been able to automatically verify medical frailty for a higher share of enrollees compared to applicants. States are also required to verify exclusions status first, and it is likely that some enrollees who were excluded, especially parents, are also working.
  • About a third of individuals (34%) met the qualifying activities requirement. Nearly all (97%) of individuals who met the qualifying activities were either working 80 hours a month or had a household income of $580. The remaining 3% met the requirements by attending school, volunteering, or engaging in a combination of activities.
  • A small share of individuals qualified for a short-term hardship exception. Of the 127 people who had a short-term hardship exception, 109 lived in counties experiencing natural disasters and 15 lived in a high unemployment county.
  • 7% of people lost coverage due to not meeting the work requirements. Of the 533 individuals who lost coverage, 92% did not respond to verification compliance requests. The remaining 8% were affirmatively found to be noncompliant.
Nebraska Renewal Outcomes Among Individuals Subject to Medicaid Work Requirements (Pie Chart)

What can additional data show?

While these data provide early insights into how coverage may be affected for enrollees subject to the new work requirements, additional data may provide a more comprehensive picture. More granular data on who is losing coverage could shed light on particular barriers certain individuals may be facing in trying to prove they met qualifying activities (e.g., gig workers or those with multiple part-time positions) and may help the state identify additional data to include as part of the verification process. In addition, it remains unclear if individuals who were denied coverage or disenrolled because they did not respond to notices of non-compliance were ineligible for coverage, unaware of the fact they needed to provide additional information, or experienced difficulty providing documentation of their exclusion or work status. Additional data, including whether these individuals reapply for coverage, could provide insight.

Required changes to the state’s medical frailty verification process specifically and limitations on the use of self-attestation starting in 2028 will likely affect disenrollment rates over time. CMS recently notified the state that it will need to make changes to its medical frailty verification process. If the state is required to tighten the verification process, fewer individuals may qualify for the exclusion in the future. More broadly, while the state’s reliance on self-attestation in 2027 will likely mitigate some coverage losses that would have occurred had documentation been required in the first year of implementation, future documentation requirements may impose a barrier that will lead to a decrease in the number of people who are able to verify they meet work requirements or qualify for an exclusion. As the state makes changes to its processes, monitoring the interactive effect of application denials and disenrollments on Medicaid enrollment in the state as well as whether the new rules lead to fewer individuals applying for Medicaid will be important.

Tracking Implementation of the 2025 Reconciliation Law: Medicaid Work Requirements

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The 2025 reconciliation law, once called the “One Big Beautiful Bill,” signed by President Trump on July 4, 2025, requires 44 states (including DC) to condition Medicaid eligibility for adults in the Affordable Care Act (ACA) Medicaid expansion group and certain enrollees in 1115 waiver programs on meeting work requirements starting January 1, 2027. Currently, 41 states (including DC) have expanded their Medicaid programs under the ACA to nearly all adults with income up to 138% FPL ($21,597 for an individual in 2025). In June 2026, CMS released a list of states with 1115 waiver programs that include individuals who will be subject to work requirements. The list identifies waiver programs in three non-expansion states Georgia, Tennessee, and Wisconsin, as well as in five expansion states, Hawaii, Massachusetts, New York, Oregon, and Utah (Figure 1).  

ACA Medicaid Expansion Enrollees and Certain Medicaid Section 1115 Waiver Enrollees Will Be Required to Meet Work Requirements in 44 States. (Choropleth map)

To implement Medicaid work requirements, states will need to make important policy and operational decisions, implement needed system upgrades or changes, develop new outreach and education strategies, and hire and train staff, all within a relatively short timeframe. The information tracked here can serve as a resource to understand Medicaid work requirements and state options, gauge readiness, and track implementation of the requirements, including:

This resource will be updated to include guidance from the Centers for Medicare and Medicaid Services (CMS), information on state policy decisions as they are made, and new data when available.

Continue scrolling to learn more about the Medicaid work requirements in the 2025 reconciliation law.

Tracking Implementation of the 2025 Reconciliation Law Medicaid Work Requirements

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KFF Resources on Medicaid Work Requirements

Work requirements overview:

Medical frailty exemption:

Implementation of work requirements:

50-state survey of Medicaid eligibility and enrollment policies:

Research and analysis on Medicaid and work:

1115 work requirement waivers:

Work requirements implications and state experience:

Arkansas work requirement experience:

KFF Polling on Work Requirements:

Beyond the Data by KFF CEO Drew Altman:

Tracking Implementation of the 2025 Reconciliation Law Medicaid Work Requirements

Updated on:

The 2025 reconciliation law requires states to condition Medicaid eligibility for adults in the ACA Medicaid expansion group on meeting work requirements starting January 1, 2027; however, states have the option to implement requirements sooner through a state plan amendment (SPA) or through an approved 1115 waiver.

State Plan Amendments (SPAs)

States may choose to implement work requirements prior to the required January 1, 2027 implementation date through a state plan amendment. Nebraska is the first state to announce that it will begin enforcing federal work requirements early through a state plan amendment, starting May 1, 2026. Two other states are also planning to implement before January 2027–Montana on July 1, 2026 and Iowa on December 1, 2026. Arkansas has announced that it plans to launch a soft implementation of work requirements on July 1, 2026 but will not disenroll individuals prior to January 1, 2027.

1115 Waivers

Since the start of the second Trump administration, several states have submitted waivers to implement work requirements. However, states are unlikely to be moving forward with proposed 1115 waivers at this time due to the passage of federal work requirements. States that plan to implement federal work requirements early will do so through a state plan amendment. Currently, Georgia is the only state with a Medicaid work requirement waiver in place following litigation over the Biden administration’s attempt to stop it. Georgia’s waiver will expire December 31, 2026; the state is required to come into compliance with the new federal requirements effective January 1, 2027.

Early Implementation and Waiver Status

The map below identifies states that have indicated they will implement federal work requirements early through a state plan amendment and the one state (Georgia) that has implemented work requirements through an 1115 waiver.

States Implementing Work Requirements Early and/or With Approved Work Requirement Waivers (Choropleth map)