Get clear insights on projected Medicaid cuts and their impact on IDD services in our free eBook. See what’s changing, what it means for your agency, and how you can stay ahead. Enter your email to get started.
Read a sneak peek
To understand how to adapt, we first need to understand what’s at stake. Medicaid is the largest funder of long-term services and supports (LTSS) for individuals with IDD in the United States. But it’s not a one-size-fits-all program. In fact, the term “Medicaid” refers to a complex and evolving network of systems, waivers, and reimbursement structures that vary dramatically from state to state.
For IDD agencies, staying informed about these differences, and about ongoing policy shifts—is essential. Even seemingly small regulatory changes can have an outsized impact on eligibility, billing timelines, documentation requirements, and day-to-day operations. As we move through 2025, both federal and state-level reforms are reshaping how agencies must deliver care, prove compliance, and secure reimbursement. Understanding those shifts is the first step toward staying ahead of them.
In 2025, significant changes are proposed for Medicaid funding—changes that could reshape how states administer care and how agencies like yours operate. These proposals are part of a larger federal budget proposal aimed at reducing overall government spending that may have serious implications for the individuals who rely on Medicaid most.
Federal funding reductions
At the heart of the proposed cuts is a reduction of up to $880 billion in federal Medicaid spending over the next decade. While this figure spans ten years, the impact would begin immediately, putting pressure on state Medicaid programs to stretch their budgets further or reduce the scope of services. If implemented, these reductions would mark one of the largest rollbacks of Medicaid funding in recent history.
Impact on states
States depend on matching federal dollars to fund their Medicaid programs. A cut of this magnitude would represent an estimated 11.8% drop in federal Medicaid funding across all states. For many states already facing budget constraints, this would force difficult decisions—such as limiting eligibility, capping services, or reducing provider reimbursement rates. For providers, that could mean tighter margins, slower payments, or fewer funded hours per service.
Policy changes
Beyond funding reductions, several proposals would alter how Medicaid eligibility is determined and maintained. These include:
- Mandatory work requirements for certain adult populations, which could result in tens of thousands losing coverage if they’re unable to meet documentation or reporting thresholds.
- Stricter eligibility redetermination processes, which may accelerate disenrollment, particularly among individuals with disabilities who rely on family or guardians to navigate complex paperwork.
- Increased state flexibility to change waiver designs, potentially leading to service reductions or caps on what can be billed under certain codes.
Enter your email, and we’ll send you our the full eBook on projected Medicaid cuts.
