Kansas spared from some Medicaid changes
Because Kansas didn’t expand Medicaid, it is exempt from several significant provisions in the One Big Beautiful Bill Act, which is projected to reduce federal Medicaid spending by about $930 billion over 10 years. However, Kansas will still be impacted by the law, according to a Kansas Health Institute analysis.
One of the provisions freezes and potentially reduces provider tax rates, which are taxes that states charge hospitals and nursing homes that are used to draw down additional federal funding. For Medicaid expansion states, the maximum allowable provider tax rate will gradually decrease from 6% to 3.5% by fiscal year 2032. Non-expansion states such as Kansas can maintain their current provider tax rates if they are within federal limits.
The law also requires expansion states to mandate work requirements for Medicaid enrollees, redetermine eligibility every six months rather than annually, and charge up to $35 per medical visit. These requirements don’t apply to Kansas and other non-expansion states.
One provision that affects Kansas relates to State-Directed Payments that help offset low base Medicaid provider rates. The law caps SDPs for inpatient and nursing facility services at 100% of Medicare rates in expansion states and 110% in non-expansion states. Starting Jan. 1, 2028, states must reduce by 10% each year the difference between their current rates and the caps.
Kansas hospitals could lose $1.6 billion in federal Medicaid funding over 10 years and potentially another $1 billion in state Medicaid funding, according to preliminary modeling commissioned by the United Methodist Health Ministry Fund. The law includes a $50 billion rural hospital relief fund that will offset some of the funding losses. UMHMF estimates Kansas’ share of those funds could be $811 million.
Kansas and other states also must perform quarterly checks for deceased Medicaid enrollees and verify addresses and submit Social Security numbers to a federal database. The law also eliminates an enhanced funding program for new states that approve expansion.
Though Kansas was spared some cuts, KHI concluded the Medicaid changes “could impact access to care, administrative workload and the overall structure of Medicaid in Kansas in the years ahead.”
SNAP also impacted
The One Big Beautiful Bill Act also includes significant changes to the Supplemental Nutrition Assistance Program, or SNAP, including:
- Beginning in fiscal year 2028, states must pay a share of SNAP costs based on their error rates of overpaying or underpaying benefits. In 2024, the Kansas error rate was 9.98%. If the rate remains below 10%, Kansas will have to pay about $41 million, according to Kansas Action for Children. If the rate rises above 10%, Kansas’ bill would be $62 million.
- The law increases the state match for the administrative costs associated with SNAP from 50% to 75%, which will cost Kansas an estimated $15 million.
- Refugees and asylum seekers will no longer be eligible for SNAP benefits. The only eligible noncitizen immigrants are green card holders and people with entrant status from certain countries, such as Cuba or Haiti.