Medicaid provides health insurance coverage for about one in five Americans and is the largest payer for long-term care services in the community and nursing homes. Efforts in 2017 to repeal and replace the Affordable Care Act (ACA) and cap federal financing for Medicaid were unsuccessful but help to set the stage for 2018. As 2018 begins, there is a focus on administrative actions using Medicaid Section 1115 demonstration waivers, state actions on Medicaid expansion, and funding for the Children’s Health Insurance Program (CHIP) and other federal health care priorities. Medicaid in 2018 is also likely to continue to be part of both federal and state budget deliberations. Pressures to control the federal deficit may reignite efforts to reduce or cap federal Medicaid spending. In addition, Governors will soon release proposed budgets for state FY 2019 that will need to account for uncertainty around CHIP and Medicaid, changes in the economy and the effects of the recent tax legislation as well as funding for rising prescription drugs and initiatives to combat the opioid epidemic. This brief examines these issues.