The 2025 budget reconciliation bill, H.R. 1, limits Medicaid state-directed payment (SDP) reimbursement for four provider types to Medicare-equivalent rates. This study assessed the provision's potential fiscal impact on states based on recent Medicaid spending on SDPs subject to the payment limits. Total Medicaid spending on these payments in thirty-nine states that paid providers at rates higher than Medicare rates averaged $106.3 billion annually during the 2024-25 rating periods, which is 12.5 percent of total fiscal year 2024 Medicaid spending in these states. Spending on SDPs ranged from less than 1 percent of total state Medicaid spending in Maryland to 31 percent in Tennessee. When the analysis was limited to subset of the highest-paying SDP arrangements in thirty-six states, which paid providers at or near the average commercial rate, a reduction of approximately $51.8 billion in annual Medicaid spending across these states might be required, including more than a quarter of total state Medicaid spending in Nebraska, Louisiana, and South Carolina. By reducing Medicaid reimbursement, the new SDP limits-compounded by limits on provider taxes-are likely to create financial strain for providers and threaten Medicaid beneficiaries' access to care.
The Department of Veterans Affairs (VA) home loan program supports veterans in achieving home ownership. This study estimated the causal effects of this program on housing instability and acute care use. A target trial emulation framework was applied to compare propensity score-matched veterans (28,681 per group) approved for or denied VA home loans in fiscal years 2022-24. Survival analyses were performed using data from the Veterans Benefits Administration and the Veterans Health Administration. Veterans approved for VA home loans were less likely to experience housing instability or to use VA acute care compared with veterans denied VA home loans. However, these effects were not significant among veterans with preexisting housing instability and acute care use, respectively. The VA home loan program may prevent housing instability and acute care use among some veterans, demonstrating the value of affordable, government-backed home loans for health.
The 2025 federal budget reconciliation legislation, H.R. 1, includes sweeping changes to Medicaid that affect immigrants, Medicaid expansion enrollees, and providers and health systems.
