As we dive into the complex world of Medicaid policy and its evolving landscape, I’m thrilled to speak with James Maitland, a seasoned expert in healthcare policy with a deep understanding of safety-net programs. With years of experience analyzing trends in enrollment, spending, and legislative impacts, James offers invaluable insights into how recent changes are shaping Medicaid and what lies ahead for states and beneficiaries. Today, we’ll explore the aftermath of pandemic-era policies, the reasons behind rising costs despite declining enrollment, and the potential consequences of looming federal cuts.
How have Medicaid enrollment trends shifted since the end of pandemic-era continuous enrollment policies?
Since those policies ended in 2023, we’ve seen a significant decline in Medicaid enrollment. Specifically, enrollment dropped by about 7.6% in fiscal year 2025, and it’s down 18% from its peak in March 2023. This is largely due to states restarting the redetermination process, where they reassess eligibility for everyone on the rolls. However, even with these declines, enrollment is still 9% higher than it was in February 2020, before the pandemic. I think this lingering increase reflects a combination of expanded eligibility in some states and a greater awareness of the program among people who might not have enrolled previously.
What do you see as the primary drivers behind the enrollment drop in fiscal year 2025?
The biggest factor, hands down, is the unwinding of continuous enrollment policies. About two-thirds of states reported this as the main reason for the decline. During the pandemic, states received extra federal funding to keep people enrolled without checking eligibility, which ballooned the numbers. Once that ended, millions were removed from the program through redeterminations. Some of these folks likely gained other coverage, like through employers or the marketplace, but others may have simply fallen through the cracks due to procedural issues or lack of outreach.
Despite falling enrollment, Medicaid spending is on the rise. Can you unpack why that’s happening?
Absolutely. Total spending grew by 8.6% in fiscal year 2025, and it’s projected to increase by another 7.9% in 2026, even as enrollment flattens. A big reason is that the people who remain enrolled often have greater health needs, requiring more intensive and costly services. On top of that, provider rate increases for managed care plans are pushing costs up, as are rising expenses for long-term care, pharmacy benefits, and behavioral health services. Over half the states surveyed noted these pressures, and it’s a trend that’s not likely to slow down soon.
Can you tell us more about the greater health needs among those who stayed enrolled after redeterminations?
Certainly. Nearly half of the states reported that beneficiaries who remained on Medicaid post-redetermination tend to have more complex or chronic conditions. These are often individuals who rely on the program for ongoing care—think diabetes management, mental health services, or disabilities requiring consistent support. Naturally, this group uses more services, which drives up costs. It’s a reminder that while enrollment numbers might shrink, the per-person cost can spike if the remaining population has significant medical needs.
On the flip side, what factors are pushing enrollment up in certain areas despite the overall decline?
There are a few policies and demographic trends at play here. About half of the states pointed to expansions like continuous enrollment for children or extended postpartum coverage, which keep more people on the rolls. Additionally, roughly a quarter of states noted an aging population driving up enrollment, particularly for long-term care services. As more seniors require support, whether in nursing homes or through home-based care, we’re seeing upward pressure on numbers in those specific categories.
With the recent decision by the Trump administration to stop approving waivers for continuous enrollment, how do you think this will impact Medicaid moving forward?
This policy shift is going to create challenges for states that relied on these waivers to maintain coverage for vulnerable groups. Without continuous enrollment, we’re likely to see more frequent eligibility checks, which could lead to further enrollment drops. States with large low-income populations or those that expanded coverage for kids and postpartum care might feel the pinch the most. While it’s hard to predict exact numbers, I wouldn’t be surprised if we see additional declines in the range of a few percentage points over the next couple of years, especially if outreach and administrative support don’t keep pace.
Looking at the broader picture with massive federal Medicaid cuts on the horizon, such as those in the recent One Big Beautiful Bill Act, what do you anticipate for states and beneficiaries?
The cuts—amounting to $911 billion—are staggering. Policies like work requirements, limits on state-directed payments, and freezes on provider taxes will likely result in millions losing coverage. States are already bracing for budget shortfalls, with nearly two-thirds saying there’s at least a 50-50 chance they’ll face one in fiscal year 2026. For beneficiaries, this could mean reduced access to care, longer wait times, or fewer providers willing to accept Medicaid due to lower reimbursement rates. States will struggle to offset these reductions, and the ripple effects could be felt across the healthcare system.
What is your forecast for the future of Medicaid given these financial and policy challenges?
I think we’re heading into a period of significant strain for Medicaid. The combination of federal funding cuts, policy restrictions, and rising costs for care means states will have to make tough choices—whether that’s tightening eligibility further, cutting benefits, or finding creative ways to stretch limited dollars. I’m concerned about the impact on vulnerable populations, especially those with chronic or long-term care needs. On the other hand, some states might push for innovative solutions, like leveraging technology or public-private partnerships, to maintain access. It’s going to be a balancing act, and the next few years will be critical in determining whether Medicaid can continue to serve as a robust safety net.
