States Reduce Medicaid Payments Long Before Federal Cuts Take Effect

Many states across the U.S. are implementing reductions in Medicaid provider payments well in advance of anticipated federal funding cuts under President Trump's policies. These early cuts are part of broader efforts by states to address significant budget shortfalls, often resulting in decreased reimbursements to hospitals, doctors, and caregivers. North Carolina, for example, announced a minimum 3% cut starting October 1, with primary care providers facing an 8% reduction and specialty providers up to 10%. Such cuts threaten to reduce access to essential healthcare services, especially for vulnerable populations relying heavily on Medicaid.

One heartbreaking example is Alessandra Fabrello, who has been a caregiver for her son, Ysadore Maklakoff, for nearly 18 years. Her son suffers from a rare brain condition, requiring complex and continuous care that Medicaid helps provide. Due to looming payment reductions, services like dental care, occupational therapy, and nursing support are at risk, making it even more difficult for families like Fabrello's to secure necessary treatment.

Across the country, other states like Idaho are also cutting Medicaid payments—Idaho's 4% across-the-board reduction has raised alarms among hospital and nursing home leaders, many of whom fear closures and reduced healthcare quality in rural and underserved areas. The financial strain is compounded by overall federal and state funding shortages, which are leading to difficult choices, such as cutting optional services or decreasing payments to providers, thereby limiting access.

The impact of these budget decisions on care for low-income and disabled populations is profound. Healthcare providers warn that these cuts will result in fewer available providers, longer wait times, and poorer health outcomes. North Carolina alone is projected to lose about $23 billion in federal Medicaid funding over the next decade, further squeezing resources.

As states grapple with economic challenges—slowed revenue growth and increased spending on social services—cutting Medicaid payments seems to be a common but damaging strategy. For individuals like Fabrello, these reductions threaten not only their financial stability but also the health and well-being of their loved ones.

Overall, these early Medicaid payment cuts undermine the goal of providing equitable healthcare access and highlight the pressing need for policy solutions that support vulnerable populations without jeopardizing their care. Source: https://medicalxpress.com/news/2025-09-states-medicaid-payments-trump.html