States cut Medicaid payments to hospitals before federal cuts take effect

States are cutting Medicaid, typically one of their largest expenses, to close budget shortfalls before the extensive Medicaid cuts in President Trump’s domestic policy law take effect. North Carolina and Idaho announced plans to cut Medicaid payments to providers, including hospitals, doctors and caregivers. Pennsylvania and Michigan are weighing Medicaid cuts as part of negotiations to pass their budgets. Reduced payments to providers will decrease the number of providers in North Carolina’s Medicaid network, resulting in a loss of access to care and higher downstream costs, says Shannon Dowler, MD, former chief medical officer for North Carolina Medicaid. Idaho Hospital Association Chief Advocacy Officer Toni Lawson fears some of the state’s critical access hospitals may close.  (KFF News article, 9/22/25)