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Medicaid Spending Cuts Create a Need for Payers to Diversify Revenue

July 15, 2025

With Donald Trump signing into law his Tax and Spending plan, the healthcare industry is coming to grips with a nearly $1 Trillion expected cut in Medicaid spending over the next ten years. These cuts will impact bottom-line performance of virtually all hospitals who treat Medicaid beneficiaries and health insurance payers who contract with state regulators to insure these beneficiaries. The question is what will payers do next? Will they hide their heads in the sand, focus on cost cutting, or will they consider new ways to generate untapped revenue?

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