Medicaid services pared back as states brace for federal cuts

Montana has postponed adding Medicaid reimbursement for doulas because of a projected federal Medicaid funding shortfall, and state officials say they will seek supplemental funding and must prepare spending-reduction plans. Officials and analysts say optional Medicaid services nationwide are at risk as states prepare for reduced federal Medicaid funding tied to the One Big Beautiful Bill Act.

Montana postponed planned Medicaid payments for doula services this spring, citing a budget shortfall tied in part to lower federal Medicaid funding. The state had approved reimbursements last year but a health department spokesperson said implementation will not move forward at this time. Health officials projected a substantial shortfall in federal Medicaid funds and said they will seek supplemental state funding and prepare a plan to reduce spending as required by state law. Key details: - Montana approved doula reimbursement up to $1,600 per pregnancy but delayed implementation due to a projected funding gap. - The state health department projected a $146.3 million shortfall in federal Medicaid funds for the current year. - A recent federal law called the One Big Beautiful Bill Act is expected to reduce federal Medicaid spending substantially and to add new eligibility checks and requirements that officials say will affect coverage over time. - States around the country are weighing reductions to optional Medicaid services such as doula support, home health care, and dental care, and some states have already proposed cuts. Summary: The immediate effect in Montana is a pause on adding doula coverage to Medicaid while officials seek supplemental funds and prepare required spending-reduction plans. Whether and when the doula benefit will be implemented is unclear at this time.