Key Takeaways
- State-share Medicaid expenditures have experienced three consecutive years of double-digit growth, rising to $367 billion in fiscal 2025–due in part to the phase-out of pandemic-era federal aid, higher provider payments, and the rising costs of serving higher-need populations.
- While overall Medicaid enrollment has fallen from its pandemic peak, it remains elevated relative to pre-pandemic levels in most states.
- Cost drivers–including medical inflation and shifting federal policies–are likely to keep states’ share of Medicaid cost growth above other expenditures; and with state Medicaid costs potentially doubling by 2036, it raises the risk to states’ financial performance and their credit quality.
18-May-2026 | 11:38 EDT