Federal Policy
Federal Medicaid Cuts and State Budget Pressures Threaten Home- and Community-Based Services for Disabled Americans
The One Big Beautiful Bill Act reduces federal Medicaid funding, prompting states to cut home- and community-based services (HCBS) that allow people with disabilities to live outside institutions. Maryland and other states have enacted or proposed HCBS reductions in response to federal funding cuts and state budget shortfalls. Federal officials have also walked back longstanding requirements that states deliver disability services in community settings rather than institutions. Advocates report the combined federal and state actions reverse decades of policy favoring community integration over institutionalization for disabled Medicaid beneficiaries.
Why it mattersFederal Medicaid cuts in the One Big Beautiful Bill Act force states to reduce HCBS funding, directly affecting LTSS service delivery, eligibility, and institutional placement rates for millions of Medicaid managed care enrollees with disabilities.