Learn about the latest Medicaid policy changes under President Trump’s 2025 executive order and learn how they could impact coverage, eligibility, and healthcare access.
Since taking office in January 2025, President Donald Trump has already made significant changes to federal policies. One major change was the cancellation of Executive Order 14009, which aimed to improve Medicaid programs and make affordable healthcare more accessible. This article will track the administration's policy changes over time that impact Medicaid and healthcare.
The One Big Beautiful Bill Act (OBBBA) passed by Congress on July 3, 2025 will cut federal spending on Medicaid and Children’s Health Insurance Program (CHIP) benefits by $1.02 trillion, due in part to eliminating at least 10.5 million people from the programs by 2034.
Your current coverage is still in place, and support options like caregiver pay programs remain available.
Stay informed and take action now: Use Givers’ program matching tool, talk to your case manager, and follow Medicaid news in your state to stay ahead of potential changes.
Medicaid in context
Medicaid is a program run by the federal and state governments to help low-income people get health insurance. It started in 1965 as part of the Social Security Act and helps pay for things like doctor visits, hospital stays, prescription drugs, and long-term care.
As of 2025, Medicaid covers 1 in 5 people in the United States, making it the country's largest public health insurance program.
Recent history of healthcare policy shifts through executive orders
Over the past decade, executive orders from both the Trump and Biden administrations have been in a tug-of-war over healthcare policy in the U.S.
An executive order is a directive issued by the President of the United States that manages the operations of the federal government. It carries the force of law but does not require approval from Congress.
In January 2025, Trump signed a new order to undo more than 70 of Biden’s policies. This could mean big changes for Medicaid, with a focus on reducing rules and cutting federal programs that focus on equality in healthcare.
In July 2025, Congress passed a sweeping domestic policy bill, the One Big Beautiful Bill Act (OBBBA), which includes historic cuts to the Medicaid program. The bill passed through the House of Representatives to the Senate and back to the House, which passed the bill with a 214-218 vote. President Donald Trump is expected to sign the bill into law on July 4 at 5PM ET. The nonpartisan Congressional Budget Office (CBO) estimated that the OBBBA will cut federal spending on Medicaid and Children’s Health Insurance Program (CHIP) benefits by $1.02 trillion, due in part to eliminating at least 10.5 million people from the programs by 2034.
President Trump made little mention of Medicaid during his 2024 presidential campaign, but his return to office has suggested he may cut federal funding for Medicaid and reduce the program's size.
Medicaid and Project 2025
Project 2025 is a plan from The Heritage Foundation, a conservative think tank, that makes policy proposals to decisionmakers in government.
Some of their key ideas about Medicaid include:
Transitioning Medicaid to block grants or per-capita caps: Giving states a fixed amount of Medicaid money instead of unlimited funding. This gives states more flexibility to tailor Medicaid programs to their needs (pro) but could lead to funding shortfalls during economic downturns or increased enrollment (con).
Limiting federal spending: Setting strict limits on how much money the federal government can spend on Medicaid. This helps control government costs (pro) but may result in reduced benefits or coverage for Medicaid recipients (con).
Encouraging market-driven healthcare solutions: Letting private insurance companies compete to offer healthcare instead of relying on government programs. This could increase innovation and competition among private insurers (pro) but may prioritize profits over access and affordability for low-income individuals (con).
These policy proposals align with President Trump's recent actions so far. If adopted, these changes could give states more flexibility but may also reduce coverage and benefits for low-income individuals.
What canceling EO 14009 means for Medicaid
Cancelling Executive Order 14009 marks a major shift and could mean the following:
States may be less likely to expand Medicaid eligibility if they lose federal funding for Medicaid expansion. As a result, millions of low-income people in states that do not expand Medicaid will not have coverage options.
Without federal programs to help people sign up for the ACA marketplace, fewer individuals may learn about it or enroll. This is especially true for those in underserved communities who have benefited from outreach efforts under EO 14009.
If there isn’t a strong federal plan to fix healthcare inequalities, ending this policy could make it harder for marginalized groups to access care.
How the Administration plans to implement this executive order
Section 3(a): Ending federal implementation of DEI ideology
What it says: Agencies must immediately stop the federal implementation of policies related to "radical DEI ideology."
What it might mean: Medicaid policies that support health equality may be reduced or removed. This includes outreach efforts to help underserved communities and attempts to lower health disparities.
Section 3(b): Review and replacement of prior actions
What it says: The Domestic Policy Council (DPC) and the National Economic Council (NEC) need to look at past federal actions. They should suggest ways to cancel, change, or improve these actions to help "increase American prosperity."
What it might mean: Policies under Biden's EO 14009 that aim to expand Medicaid and support ACA enrollment may be changed or not prioritized. Efforts to make enrollment easier and improve coverage for low-income families might be replaced with policies that focus more on saving the government money or promoting economic growth.
Section 3(c): National security memoranda review
What it says: The National Security Advisor must review documents from the previous administration to see if they harm "national security, domestic resilience, and American values."
What it might mean: Healthcare policies tied to national security, such as pandemic preparedness or global health initiatives, may be reviewed and potentially revised.
January 20,2025: President Trump’s January 20, 2025, executive order signaled a rollback of Medicaid expansion efforts and other healthcare equity initiatives. Federal agencies, including the Department of Health and Human Services (HHS), are tasked with reviewing prior policies for rescission or amendment.
January 28, 2025: The Office of Management and Budget (OMB) issued memo M-25-13, ordering a temporary pause on federal financial assistance activities, including Medicaid disbursements. Although the Medicaid payment portal shut down briefly, the administration stated the shutdown was unrelated to the funding freeze. A federal judge later blocked the memo, and the OMB withdrew it on January 29.
February 12, 2025: House Republicans released a budget plan to cut government spending by trillions over the next 10 years. This includes an $880 billion cut to Medicaid, the program that helps low-income people get healthcare. The budget is still being debated in Congress, and no final decisions have been made yet.
February 25, 2025: The House passes a broad Trump-endorsed budget proposal. This was a high-level blueprint laying out the administration’s overall fiscal priorities. It included $800 billion in unspecified Medicaid cuts and $4.5 trillion in tax cuts, largely signaling intent rather than triggering changes. It did not include specific implementation plans.
April 10, 2025: The House passes a targeted budget resolution focused on Energy and Commerce programs. This resolution provided specific instructions to cut $880 billion over the next decade from programs overseen by the House Energy and Commerce Committee, which controls a large portion of Medicaid spending. Unlike the February proposal, this was designed to advance budget reconciliation, a legislative process that could lead to real program changes. While still not final law, it marked a more concrete step toward cutting Medicaid and related health programs.
May 12, 2025:House Republicans introduce a Medicaid reform bill with eligibility restrictions. It included work requirements for certain Medicaid recipients, stricter income and eligibility verification, and new cost-sharing measures like modest co-pays. These provisions reflect a push to curb enrollment and reduce spending without fully eliminating coverage, but could still lead to fewer people qualifying for or maintaining Medicaid access.
May 13, 2025: The House advances President Trump’s “big, beautiful bill”, which included $5+ trillion in tax breaks and $800 billion in Medicaid cuts. The new bill aims to significantly cut federal spending on health and welfare. The Congressional Budget Office (CBO) issued a warning that the proposed changes could result in millions of people losing their health coverage. The package is still moving through the legislative process, facing hurdles in the Senate, but this marks a critical moment in advancing major changes to Medicaid.
July 3, 2025: Congress passes President Trump's "One Big Beautiful Bill Act". The legislation requires certain recipients ages 19 to 64 – as well as parents of children ages 14 and older – to work, volunteer, enroll in school or participate in job training at least 80 hours a month. It also lowers the cap on expansion states’ provider taxes and limit both existing and new directed payments. To compensate for the provider tax cap decreases, it establishes a $50 billion relief fund for rural hospitals and restricts Medicaid eligibility for certain immigrants, including refugees and asylees. Finally, it bars Planned Parenthood from receiving Medicaid funds for one year
Visit Congress.gov to track other Medicaid-related bills in real time.
Medicaid-Related Provisions in the Congressionally Approved Budget Reconciliation Bill
The Medicaid cuts in the One Big Beautiful Bill Act take effect on different timelines, and it is important to speak to your Medicaid case manager to be prepared. By 2027, all states must implement the new Medicaid rules.
Medicaid Expansion Redeterminations
Section 71107 Effective Date: December 31, 2026
Requires eligibility redeterminations every 6 months (previously annually) for individuals under Medicaid expansion or equivalent waivers.
Appropriates $75M to CMS in FY2026 for implementation.
Provider Taxes
Section 71115 Effective Date: On the date of enactment
Prohibits new provider taxes and increases beyond current rates or tax bases.
Non-Expansion States:
Freezes taxes at current rate/base as of enactment.
Effective for FY2026 onward.
Max rate (safe harbor) remains 6%.
Expansion States:
Existing taxes capped at the lower of current rate or a phased-down maximum (decreasing by 0.5% annually from FY2028 to 3.5% by FY2032).
New taxes capped at 0%.
Exemptions: Nursing homes and Intermediate Care Facilities remain exempt if at or below 6%.
Appropriates $20M to CMS in FY2026.
Revising the Payment Limit for Certain State Directed Payments
Section 71116 Effective Date: On the date of enactment
Grandfathered SDPs:
Approved or submitted by May 1, 2025, are capped at current payment levels.
Reduced by 10% annually beginning January 1, 2028, until they reach Medicare parity.
New SDPs:
Non-expansion states: capped at 110% of Medicare rate.
Expansion states: capped at 100% of Medicare rate.
If no Medicare rate, capped at Medicaid state plan or waiver rate.
Appropriates $7M to CMS each fiscal year from FY2026–2033.
Waiver of Uniform Tax Requirement
Section 71117 Effective Date: Upon enactment (with optional 3-year transition)
Permits differential tax rates within Medicaid classes.
Carve-out for states adjusting to meet redistributive standards.
Applies to all 50 states and D.C. (territories excluded).
Rural Health Transformation Program
Section 71401
Creates $50B grant program for FY2026–2030 through CMS.
States must submit a "rural health transformation plan."
Fund distribution:
50% evenly to all approved states
40% based on need
10% for CMS administrative costs
Application deadline: December 31, 2025
Eligible providers include rural hospitals, clinics, FQHCs, CMHCs, and opioid treatment programs.
Mandating 1115 Waiver Budget Neutrality
Section 71118 Effective Date: January 1, 2027
Statutory requirement for 1115 waiver budget neutrality.
CMS Chief Actuary must certify no increase in federal spending.
Appropriates $5M to HHS for FY2026 and FY2027.
Medicaid Community Engagement Requirements
Section 71119 Effective Date: First quarter after December 31, 2026
HHS must issue rule by June 1, 2026.
States may implement earlier via 1115 waiver.
Work Requirement:
80 hours/month of work, education, or community service.
Applies to expansion adults; certain groups are exempt (e.g., minors, caregivers, medically frail, etc.).
States must verify compliance before enrollment and at redetermination.
MCOs or related entities cannot determine compliance.
Includes hardship exceptions and travel-related medical exemptions.
Funding:
$200M to CMS
$100M in grants to states, proportional to Medicaid population
$100M for equal distribution to all states
Expansion FMAP for Emergency Medicaid
Section 71110 Effective Date: October 1, 2026
Eliminates enhanced federal match for emergency services to undocumented immigrants.
Appropriates $1M for FY2026.
Key Provisions Excluded from Final Senate Version
FMAP penalty for undocumented coverage
Spread pricing ban
DSH reduction delay
Medicare Fee Schedule changes
PBM accountability provisions
Moratoria on Eligibility & Enrollment Rules
Sections 77101 & 77102 Effective Date: Upon enactment
Blocks 2023 Medicare Shared Savings and 2024 Medicaid/CHIP enrollment final rules.
Appropriates $1M for CMS implementation.
Reducing Duplicate Enrollment
Section 71103 Effective Date: January 1, 2028
States must ensure applicants are not enrolled in Medicaid in another state.
Monthly data submission to HHS required.
Contracts must include address transmission by Jan 1, 2027.
Funding:
$10M (FY2026) for system setup
$20M (FY2029) for maintenance
Deceased Beneficiary & Provider Removal
Sections 71104 & 71105 Effective Date: January 1, 2027
Quarterly review of SSA Death Master File to disenroll deceased enrollees and providers.
Outlines procedures for termination and reinstatement.
Payment Reduction for Excess Medicaid Payments
Section 71106 Effective Date: FY2030
HHS must recover payments exceeding 0.03% error threshold.
No waivers allowed for improper payments.
Home Equity Limit for LTC
Section 71108 Effective Date: January 1, 2028
Caps home equity for LTC eligibility at $1M.
Agricultural land is exempt.
Cannot be waived via asset disregards.
Alien Medicaid Eligibility
Section 71109 Effective Date: October 1, 2026
Restricts “qualified alien” definition to LPRs, certain Cubans/Haitians, and Compact of Free Association residents.
Appropriates $15M in FY2026.
LTC Staffing Standards Rule Moratorium
Section 71111 Effective Date: Upon enactment
Delays enforcement of federal staffing standards and transparency rule for LTC facilities.
HCBS Expansion Under Medicaid
Section 71121 Effective Date: July 1, 2028
Expands 1915(c) HCBS waivers to those meeting state-specific needs-based criteria.
Funding:
$50M to CMS (FY2026)
$100M to states (FY2027)
Reducing State Medicaid Costs
Section 71112 Effective Date: January 1, 2027
Reduces retroactive eligibility from 3 months to 1 (expansion adults) and from 3 to 2 (all others).
Appropriates $10M to CMS in FY2026.
Federal Payments to Prohibited Entities
Section 71113 Effective Date: Upon enactment
10-year ban on federal funding to nonprofits providing abortions (except rape, incest, or life of mother).
Applies to entities receiving $1M+/year and $800K+ in FY2023 Medicaid payments.
$1M in CMS implementation funds (FY2026).
Sunsetting Medicaid Expansion FMAP Incentive
Section 71114 Effective Date: January 1, 2026
Ends 5% FMAP bonus for expansion.
$50M in implementation funding (FY2026), increased to $200M.
Cost Sharing for Medicaid Expansion Adults
Section 71120 Effective Date: October 1, 2028
Requires cost-sharing for adults over 100% FPL:
Max $35 per service
Max 5% of income
Exceptions: primary, mental health, pediatric, prenatal, emergency care
$15M for CMS (FY2026)
ACA Cost Sharing Reduction (CSR) Payments
Section 71113 Effective Date: January 1, 2026
Allows federal CSR payments, with abortion-related restrictions.
$1M in implementation funding.
Drug Price Negotiation — Orphan Drugs
Section 71203 Effective Date: January 1, 2028
Refines exemption rules under ORPHAN Cures Act.
Applies negotiation restrictions based on drug’s status loss.
Medicare Coverage Limitations for Non-Citizens
Section 71202 Effective Date: 18 months after enactment
Limits coverage to LPRs, certain Cubans/Haitians, and Compact residents.
CMS must notify ineligible enrollees within 12 months and terminate by 18.
Healthcare Tax Provisions
Premium Tax Credit Limitations
Section 71301 Effective Date: After December 31, 2026
Only available to eligible aliens (LPRs, Cubans/Haitians, Compact residents).
No Tax Credit During Medicaid-Ineligible Periods
Section 71302 Effective Date: After December 31, 2025
Denies tax credits to lawfully present individuals ineligible for Medicaid.
Required Verification for Premium Tax Credit
Section 71303 Effective Date: After December 31, 2027
Requires full verification of applicant info.
Full Recapture of Overpaid Tax Credit
Section 71305 Effective Date: After December 31, 2025
Requires full repayment of overpaid credits.
Permanent Telehealth HDHP Safe Harbor
Section 71306 Effective Date: After December 31, 2024
Makes HDHP pre-deductible telehealth permanent.
HSAs with Bronze & Catastrophic Plans
Section 71307 Effective Date: After December 31, 2025
Allows pairing with HSAs.
Direct Primary Care Clarifications
Section 71308 Effective Date: After December 31, 2025
Caps fees at $150/month.
Excludes high-cost procedures and prescriptions.
Additional Excluded Provisions
Monthly provider screening
Reasonable opportunity period changes
Medicaid gender-affirming care bans
Pharmacy payment reforms
ACA exchange fraud provisions
Medicaid/CHIP streamlined out-of-state enrollment
Premium tax credit restrictions during SEP
What this means for people on Medicaid right now
Medicaid will be more difficult to enroll in and remain on. In the 40 states that expanded Medicaid access under the Affordable Care Act, recipients aged 19 to 64 will be required to work, attend school, or perform 80 hours of community service monthly to maintain their benefits.
If you or your family rely on Medicaid waivers, like Home and Community-Based Services (HCBS), it's important to be aware of ongoing policy proposals that could affect these programs.
That means:
Your current coverage and services remain in place
There’s still time to prepare and take action
Some of the changes include:
Stricter income and eligibility checks
Work requirements for some recipients
Cost-sharing through co-pays or premiums
These changes could lead to:
Reduced waiver program funding at the state level
Longer waitlists or fewer available services
Stricter criteria to qualify for HCBS or other supports
Because Medicaid is jointly funded by federal and state governments, any reduction in federal contributions could force states to reevaluate how they operate their waiver programs, including who qualifies, how many people can be served, and which services are covered. But the outcome will depend heavily on individual state decisions and public input.
What Medicaid beneficiaries and their families can do
While the future of Medicaid is currently uncertain, here are some things you can do to protect your coverage and access to care:
Stay informed about your state’s Medicaid policy and any changes being discussed
Share your story with your case manager, provider, or local elected officials to make sure caregiver voices are heard
While the future of Medicaid is still taking shape, families who use waiver programs still have options and a voice. It's important to understand your benefits, speak up for what matters to you, and connect with reliable resources that can help you navigate what’s ahead.
Best places to stay informed about your state’s Medicaid policy
Your state Medicaid agency website: Each state Medicaid agency typically posts updates, proposed changes, and public notices.
State advocacy organizations: Look for non-profits or coalitions in your state that focus on healthcare access or disability rights (e.g., Families USA, Center for Public Representation, or local AARP chapters).
State legislature websites: These sites list pending bills and budget proposals. You can also sign up for alerts on topics like Medicaid or long-term care.
Givers is a non-partisan organization and does not align with any political party or ideology. This article is intended solely for educational purposes, providing information about Medicaid and recent policy developments to help readers stay informed.
