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Story perspectives

States Face Budget Crisis Amid Rising Medicaid Costs

3/25/2026

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Story summary
  • Federal Medicaid and SNAP policies are raising administrative costs and reducing revenue for state budgets.
  • In fiscal year 2025, the median rainy-day fund balance fell to 47.8 days, the first drop since the Great Recession.
  • Pennsylvania and New Jersey are proposing to tap reserves to address budget gaps.
  • Republican-led states are considering cuts to essential services, including child care and disability programs.