Providers frequently decline new Medicaid patients primarily due to significantly lower reimbursement rates compared to private insurance or Medicare, which can make it financially unsustainable for some practices. Additionally,, heavy administrative burdens and billing complexities create substantial,, time-consuming obstacles for doctors. These factors often restrict patient access, particularly for specialists.
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.
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.
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.
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.
On average, Medicaid pays only 78% of what Medicare reimburses for the same services. For more complex procedures, the gap is even larger. This means doctors make significantly less money when treating Medicaid patients than those with Medicare or private insurance.
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.
Unfortunately, Medicaid recipients may receive a lower quality of care, though the reasons are complicated. Ensuring quality and access remains a challenge, particularly with increasing demand and potential funding limitations.
Hospital participation in Medicare and Medicaid is voluntary. However, as a condition for receiving federal tax exemption for providing health care to the community, not-for-profit hospitals are required to care for Medicare and Medicaid beneficiaries.
Figure 1: Nearly 70% of physicians accept new Medicaid patients.
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.
One likely reason fewer doctors accept Medicaid patients is that those claims are paid at a lower rate than other insurance. More providers would be interested in Medicaid if the program's reimbursements were similar to Medicare payments, according to the report.
Starting in 2026, several provisions take effect that will further reduce access to Medicaid. On January 1, 2026, the law sunsets the enhanced Federal Medical Assistance Percentage (FMAP) that had incentivized states to expand Medicaid under the Affordable Care Act.
Reducing Medicaid funding will lead to worse health outcomes, overburden emergency rooms, and cause many rural hospitals to close. Medicaid helps millions of Americans stay healthier by providing care and coverage. Medicaid gives millions of Americans access to the front door of the health care system.
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.
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.
The 2025 budget reconciliation bill (H.R. 1), signed into law on July 4, 2025, introduces new work requirements, also referred to as community engagement requirements, for certain Medicaid enrollees. The provision makes continued Medicaid eligibility contingent upon participation in work or other qualifying activities.