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Fact check: Which states are most likely to see Medicaid enrollment declines in 2025 under proposed policy changes and why?
Executive Summary
States most likely to see Medicaid enrollment declines in 2025 are those that did not expand Medicaid and those with more aggressive unwinding and renewal practices; twelve states already reported enrollment below pre-pandemic levels including Arkansas, Alaska, Colorado, Idaho, Iowa, Louisiana, Montana, New Mexico, South Carolina, Tennessee, Texas, and West Virginia [1]. Policy changes in 2025 — notably the federal budget reconciliation law introducing community engagement/work requirements and cuts to federal Medicaid spending — create additional administrative and eligibility barriers that could deepen declines in non-expansion and high-unwinding states, while expansions and continuity policies could blunt losses [2] [3] [4] [5].
1. Why some states are already shedding enrollees — and who is most exposed
State-level reporting through mid-2025 shows divergent enrollment trajectories driven by differences in renewal operations and expansion choices. Twelve states were below pre-pandemic enrollment levels as of September 2025, a pattern tied to state renewal policies, application processing performance, and whether states expanded eligibility [1]. States that chose not to expand Medicaid or that implemented stringent renewal procedures are particularly exposed because procedural terminations and slower processing raise the risk of losing coverage even when people remain eligible [6] [7]. The KFF tracker data underscores that enrollment changes are not uniform: where states invested in smoother renewals and retention strategies, declines were smaller or reversed; where operations lagged, losses were concentrated [1] [6]. The practical takeaway is that administrative friction, not only eligibility rules, is a primary driver of observed 2025 declines.
2. Expansion status shapes vulnerability — expansion states fare better
Medicaid expansion status strongly correlates with enrollment stability in 2025; 41 states had adopted expansion by late summer 2025, and expansion states generally recorded higher enrollments and greater resilience against unwinding losses [8]. Where expansions occurred during or after the pandemic, states saw larger rolls and fewer net losses, while non-expansion states such as Texas were already experiencing declines relative to pre-pandemic baselines [8] [1]. Expansion extends eligibility to more low-income adults and typically aligns with outreach and simplified enrollment systems, creating structural protection against enrollment drops. This means that non-expansion states face two layers of risk in 2025: a smaller safety net to begin with, and greater sensitivity to federal policy changes and operational disruptions that can quickly translate into lost coverage [8] [1].
3. Federal policy shifts in 2025 increase downward pressure on rolls
The 2025 Budget Reconciliation Act introduces new community engagement/work requirements and substantial federal spending cuts, both of which are projected to reduce Medicaid coverage nationally and will disproportionately affect states with weaker administrative capacity or political inclination to resist stricter rules [2] [3]. CBO-style estimates in the provided analyses forecast billions in federal Medicaid spending reductions and millions more uninsured by 2034, and the new work requirements create an additional compliance hurdle for able-bodied adults aged 19–64 starting in 2027, which could accelerate disenrollments in states that implement them promptly [3] [4]. The combined effect of reduced federal funds and added eligibility conditions means states with minimal outreach, high procedural terminations, and non-expansion status are uniquely likely to see sharper 2025 declines as administrative and policy barriers compound.
4. Administrative bottlenecks and procedural churn — the immediate mechanism of loss
Empirical snapshots of eligibility operations show how renewals, call center performance, and processing times drive churn: one analysis found 31% of individuals faced disenrollment during eligibility redeterminations, with most terminations being procedural rather than due to ineligibility [7] [6]. The Commonwealth Fund highlights that policies like 12-month continuous eligibility markedly reduce churn; absent such measures, routine renewals produce avoidable losses [5]. Therefore, states with slower processing, limited staffing, or policies that do not provide continuous eligibility are likely to see larger 2025 declines, even independent of expansion choices. This points to a clear policy lever: operational reforms and continuity provisions can materially blunt declines, while administrative retrenchment magnifies them [6] [5].
5. What to watch next — state choices will determine the trajectory
Going forward, the pattern of 2025 declines will reflect the interaction of federal mandates and state-level responses: states that counteract federal tightening through expansions, continuity policies, and investment in renewal operations can limit losses, while those that adopt work requirements, enact stricter renewal rules, or fail to modernize systems will likely face outsized enrollment declines [4] [5] [8]. The KFF enrollment tracker and eligibility operations snapshots provide real-time indicators to monitor: monthly enrollment trends, procedural termination rates, and whether states adopt continuous eligibility or outreach programs will be the clearest predictors of who continues losing coverage [1] [6]. In short, non-expansion states with weak administrative capacity and those embracing new federal work requirements are the most likely to record steep Medicaid enrollment declines in 2025 [1] [2] [4].