As Congress continues implementing major federal budget legislation passed in 2025, disability advocates across the country are closely monitoring how changes to Medicaid funding may affect individuals with intellectual and developmental disabilities (IDD).

Although the legislation does not directly eliminate disability services, several provisions reduce federal Medicaid spending over the next decade and shift additional financial responsibility to states. Medicaid remains the primary funding source for Home and Community-Based Services (HCBS), including supported living, employment services, respite care, day programs, and personal assistance that enable people with disabilities to live independently in their communities.

Advocacy organizations have expressed concern that states facing budget pressures may be forced to limit optional Medicaid services, including HCBS programs that many individuals with IDD rely upon every day. Historically, community-based supports have been among the most vulnerable programs during periods of Medicaid funding reductions because they are not federally mandated services.

Several implementation timelines begin in 2026 and 2027, including new eligibility verification requirements and more frequent Medicaid redeterminations for some populations. While most individuals with significant disabilities are expected to remain eligible for services, advocates are encouraging families to stay informed and promptly respond to any requests for documentation from their state Medicaid agencies.

PSW will continue to monitor federal developments and advocate for policies that protect access to essential services and supports for individuals with disabilities. As implementation moves forward, collaboration between providers, self-advocates, families, and policymakers will remain critical to ensuring community-based services remain strong and accessible.