Providers frequently decline or limit Medicaid patients due to significantly lower reimbursement rates compared to private insurance or Medicare, coupled with high administrative burdens, complex billing, and delayed payments. These factors can make treating Medicaid patients financially unsustainable for private practices.
In many areas, finding Medicaid providers can be difficult. Medicaid's payment rates are lower than Medicare's or other insurance and may drive some providers away from treating patients with Medicaid coverage.
People on Medicaid may have less access to providers and get substandard care. Medicaid's reimbursement rate is lower than that of any other insurance. Some doctors lose money seeing Medicaid patients because the rate is so low, and some doctors think of seeing Medicaid patients as charity work.
Previous research has demonstrated that up to one-third of all physicians refuse to accept new Medicaid patients,1 and these percentages have not changed significantly over the past decade.
Medicaid patients experience increased barriers to care compared with privately insured patients. In a nationwide survey of primary care providers in 2015, only 45% indicated they were willing to accept new Medicaid patients while 94% were willing to accept new privately insured patients.
There isn't one single "worst" state, as it depends on the metric, but Mississippi, Louisiana, Kentucky, West Virginia, Texas, and South Dakota frequently rank low for access, quality, and affordability, facing challenges like lack of providers, transportation, and lower reimbursement rates, especially in the Southeast. States with low Medicaid expansion enrollment and higher potential impacts from federal cuts, like South Dakota, Wyoming, and Utah, also appear on "worst" lists.
It takes some financial planning. The second downside is that it restricts you to where you can go live. If you need nursing home care, you can only go to the places that accept Medicaid as a benefit.
Eligibility rules differ between states. In states that have expanded Medicaid coverage: You can qualify based on your income alone. If your household income is below 133% of the federal poverty level (FPL), you qualify.
Unlike Medicare, Medicaid is administered at the state level, and opt-out procedures vary widely: No Formal Opt-Out: Many states do not offer a formal opt-out process. Instead, providers simply decline to enroll as Medicaid participants.
Medicaid is facing significant changes due to the 2025 budget reconciliation bill (H.R. 1/OBBBA), introducing federal work/community engagement requirements for some enrollees, potential funding cuts, restrictions for certain immigrants, and increased out-of-pocket costs for some expansion adults, leading states to already cut spending and providers to leave, risking access issues for millions, especially people with disabilities, older adults in long-term care, and low-income families.
While children and low-income adults make up the largest share of Medicaid enrollees, people eligible due to age (65+) or disability account for over half of all Medicaid spending, due to higher healthcare needs and use of costly long-term care services. Children are the biggest group by enrollment numbers, while low-income adults (especially through ACA expansion) and the elderly/disabled are key populations.
If you or your loved ones don't qualify for Medicaid, you have other options, including CHIP for people under 18 years, Tricare for military personnel and their families, and Medicare for people ages 65 years and older. You can also consider state-based programs that may offer healthcare plans at a lower cost.
Ten states—Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming—have not expanded Medicaid eligibility under the Affordable Care Act to individuals with incomes up to 138% of the federal poverty level.
Administrative Burdens
Doctors report that Medicaid paperwork and billing requirements are more complex and time-consuming than private insurance. Many offices lack the staff and resources to handle the extra administrative work, leading them to prioritize privately insured patients instead.
If you are no longer eligible for Medicaid, you can apply for private health insurance through your employer if that is offered to you. Generally, to sign up for job-based coverage outside of the normal annual open enrollment, you must apply within 60 days of losing your Medicaid.
The study explained that unfair treatment due to health insurance type may have many causes, such as bias and discrimination on the part of providers and office staff members, as well as provider perceptions of or experiences with structural aspects of the Medicaid program.
Summarizing, we do find corroborative evidence (admittedly based on physician self-reports) that both Medicare and Medicaid pay significantly less (e.g., 30-50 percent) than the physician's usual fee for office and inpatient visits as well as for surgical and diagnostic procedures.