Analysis: HHS FY26 Appropriations Legislation Includes Medicaid Policy Changes

January 23, 2026

Analysis: HHS FY26 Appropriations Legislation Includes Medicaid Policy Changes

Home » Analysis: HHS FY26 Appropriations Legislation Includes Medicaid Policy Changes

BY Georgia Goodman

The HHS funding bill passed in the House on January 22, 2026 included some key Medicaid provisions. It now faces a vote in the Senate before January 30 to avoid a second lapse in federal appropriations.

A package of funding bills has passed the House and moves to the Senate for a vote prior to the January 30, 2026 deadline. If the Senate fails to approve the package, the government could again shut down, as it did for over a month at the beginning of the federal fiscal year. The four-bill package includes a bill funding portions of the Department of Health and Human Services (HHS) budget and many programs serving older adults.

Medicaid Buy-In

Riding along with some of the health extenders, there was a positive inclusion: a Medicaid change for older adults. The bill includes a key policy amendment that would allow individuals over age 65 to participate in states’ Ticket to Work or other similar buy-in programs operated under 1115 waivers.

The popular programs allow individuals with disabilities to be eligible for Medicaid even if their incomes are over the typical income threshold.

Operated as buy-in programs, eligible enrollees can continue to work, receive Medicaid health insurance, and support with activities of daily living and instrumental activities of daily living.

Eligibility has historically been limited to individuals under age 65; language in this legislation would eliminate the age cap. Opening up eligibility to older adults would allow ongoing community engagement while individuals continue to work, if they choose. Otherwise, upon turning 65, individuals participating in their state’s program would need to choose between quitting their job or losing health insurance and other long-term services and supports. This policy transition allows continuity of care, promotes independence, and supports individual’s self-worth and economic participation.

Other Medicaid Changes

Changes to the Medicaid program within the HHS funding bill include streamlining provider enrollment across state lines for providers that have been determined to have a low risk of fraudulent activity, processes for confirmation of eligibility for active military families, and additional attention to disproportionate share hospital (DSH) payments.

LeadingAge will continue to monitor appropriations activity as we look ahead to the Senate vote.