KFF January 23, 2026
As states begin budget debates for state fiscal year (FY) 2027, many states are facing a more tenuous fiscal climate. Slowing revenue growth and heightened spending demands coupled with anticipated federal Medicaid cuts under the 2025 reconciliation law, changes to the Affordable Care Act (ACA) enhanced Marketplace subsidies, and economic changes are contributing to tighter budget conditions and fiscal uncertainty for states. Medicaid is often central to state fiscal decisions as it is simultaneously a significant spending item as well as the largest source of federal revenues for states.
States projected Medicaid enrollment to remain flat for FY 2026 in KFF’s 2025 budget survey of Medicaid officials and total Medicaid spending was expected to increase 7.9%, though there was substantial...
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