KFF's analysis explains the new limits on provider taxes and how they will affect each state

View in browser NEW & NOTEWORTHY  Changes to Medicaid Provider Taxes Could Lead to Cuts in 31 States  KFF's analysis explains the new limits on provider taxes, which will cut federal Medicaid spending by $226 billion over 10 years, and how they will affect each state. KFF estimates that 31 states will have to cut one or more provider taxes because of restrictions on the "hold harmless" limit in ACA expansion states starting October 1, 2027. More immediately, all states could potentially be affected by a new federal law that effectively prohibits states from enacting new provider taxes or increasing the rates of their existing taxes. That prohibition will limit states' ability to respond to the health care cuts in the 2025 reconciliation law. All states and DC, except Alaska, use at least one provider tax to help pay for the state share of Medicaid spending, and 39 states have three or more provider taxes in place. Provider taxes are most common for hospitals (47 states), nursing facilities (45 states), and intermediate care facilities (33 states). Historically, states have used provider tax revenues to sustain Medicaid spending during budget shortfalls or to increase Medicaid provider rates, which encourage provider participation in Medicaid. Provider taxes account for 18% of state Medicaid spending in FY 2026 budgets, while general funds account for 70%. The analysis uses data from KFF's 2025-2026 Medicaid Budget Survey. Read the brief MEDIA CONTACT: Tammie Smith |  202.654.1410 | TammieS@kff.org   When citing our work, please note our name is KFF, which is our legal operating name. We should be cited as KFF, a nonprofit health policy research, polling, and news organization. We no longer use the name Kaiser Family Foundation.  Did someone forward this to you? Sign up for emails from KFF. This email was sent to awesomeblogger71.lificletter@blogger.com. Update your email preferences to choose the types of emails you receive. Or, permanently unsubscribe from all future emails. Need assistance? Email subscriptions@kff.org; do not reply to this email. The independent source for health policy research, polling, and news. KFF, 185 Berry Street, Suite 2000, San Francisco, CA 94107