AARP Hearing Center
How Much Will You Pay for Medicaid Under the New Rules?
Under the One Big Beautiful Bill Act, Medicaid enrollees in most states will face copays for some health care services
Kotryna Zukauskaite
Key takeaways
- Medicaid expansion states must add copayments for at least one health care service by October 2028.
- States will decide which services require copays and how much to charge, up to $35 per service, though some services such as primary care visits are exempt.
- AARP warns that even small out-of-pocket costs can lead low-income older adults to delay care or skip medications.
A copay of a few dollars to visit a doctor may not sound like much, but for low-income older adults on Medicaid, even small payments can add up fast.
Many states currently allow Medicaid patients to access health care services like outpatient visits, hospital stays and prescription drugs with no out-of-pocket cost. But by October 2028, that will change for certain enrollees who live in more than 20 states. Under the One Big Beautiful Bill Act, which was signed into law by President Donald Trump in July 2025, states that have adopted Medicaid expansion must impose copayments on at least one type of health care service for certain enrollees.
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Medicaid expansion enrollees with incomes between 100 and 138 percent of the federal poverty level, about $15,960 to $22,025 for a single person this year, will be subject to the new rules. The copays could hit especially hard for older adults who lose access to employer-based health insurance before they are eligible for Medicare.
“It doesn’t make sense to try to pull these relatively small amounts of money from people who don’t have it,” says Joan Alker, a research professor at the McCourt School of Public Policy at Georgetown University.
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Forty states and the District of Columbia have adopted Medicaid expansion, which broadens eligibility so that adults under 65 qualify by income alone if they earn below 138 percent of the federal poverty level. Nineteen states with Medicaid expansion already require fees for some services.
Copay costs will likely vary. States will have leeway in what they ultimately charge, as long as copays don’t exceed $35 per service, according to an April analysis of the legislation by AARP’s Public Policy Institute. The fees must be applied to at least one health care service, such as a visit to a specialist or a nonemergency ER visit. Some services, like primary care appointments, are exempt from copays.
For some people, “$5 is a coffee,” says Andrea Callow, a policy adviser at the AARP Public Policy Institute. “But when you’re paying 50 percent of your income on housing and food is expensive and you’re using a lot of health care services, it really adds up, and people start rationing care.”
Small payments, big burdens
About 20 million adults in the U.S. are part of the Medicaid expansion group, according to health policy research nonprofit KFF. That includes nearly 5 million adults ages 50 to 64, according to AARP data. Many of them could be subject to the new copays.
People in this group may find these added costs to be especially challenging. Adults typically need more health care as they age, and Medicaid is an important safety net for those who retire before they are eligible for Medicare, whether by choice or because they lose a job and struggle to find a new one. The health of Medicaid users could suffer when they have to weigh the cost of visiting a doctor or picking up medication against other expenses.
“Research has been clear that even relatively small copays will deter people from getting care they need,” Alker says. “That costs our system more in the long run.”
Erin Guay, co-executive director of the Pennsylvania Health Law Project, a legal services organization that represents patients who need Medicaid, has seen this play out in real life. Pennsylvania charges Medicaid beneficiaries $3 per day spent in the hospital, up to $21 for one hospital stay; $1 for each generic prescription drug; $3 for each brand-name prescription drug; and $1 per X-ray.
“A lot of our clients are on very fixed budgets and often don’t have money left at the end of the month,” Guay says. They sometimes must decide whether to delay care, stretch out their medications or go without food, especially if they need frequent medical care, she adds.
Fourteen states currently charge copays that already comply with the new rules and will not have to make changes in 2028, according to the AARP Public Policy Institute’s interpretation of the legislation. Four states will have to lower costs on at least one service, and Iowa will have to discontinue the premiums it charges to certain Medicaid enrollees. That means 21 states and the District of Columbia will have to add copays in 2028.
Several AARP state offices have sent letters to their state Medicaid directors urging them to set fees well below the $35 maximum, pointing out that even small increases in out-of-pocket costs can lead to skipped care and adverse health outcomes.
AARP Kentucky successfully lobbied legislators in both the state House and the Senate to reduce future copays from $20 to $5 for services, to limit future prescription drug copays to $1, and to push the start date to impose these fees to the federally required deadline of October 2028 rather than launching them earlier.
“We know this is a pocketbook issue,” says Daniel Roe, state advocacy and community engagement manager at AARP Kentucky. “With rising health care, prescription drug and utility costs, there has to be some way to alleviate that.”
States have leeway on imposing costs
How much you pay when the copay requirements kick in will largely depend on your state.
While state Medicaid programs must add a copay of up to $35 on at least one item or service under the 2025 legislation, there are some protections for enrollees built in.
Prescription drug copays are limited to $4 for preferred medications and $8 for non-preferred drugs. States can’t add copays for primary care visits, preventive services, behavioral health or emergency needs. People who are 65 and older, on Medicare or with incomes below the poverty line are exempt from the new rules. Also, Medicaid enrollees will not pay more than 5 percent of their income on out-of-pocket expenses, which states can calculate monthly or quarterly. States may also choose to bar providers from denying care if someone doesn’t pay, and to let providers waive costs on a case-by-case basis.
“If we’re going by the plain language of the statute, it gives states a ton of discretion,” Callow says.
That still leaves a lot of uncertainty for Medicaid users. Specialist visits and vision and dental appointments could all require copays. That could lead to steep costs for someone with a chronic condition who frequently visits a cardiologist or oncologist.
“Thirty-five dollars is fairly significant if you are living below the poverty level,” Alker says.
And even residents of those states already charging copays may get a jolt.
Guay notes that in Pennsylvania, some managed care organizations — the private companies that contract with the state to provide Medicaid benefits — charge lower copays than what the state allows, or none at all, for certain services. Guay is not sure yet whether these organizations will adjust their rates when the new rules take effect in 2028.
“If that happens, it will be a big change in Pennsylvania,” she says. “Not everyone is paying these copays the state outlined.”
The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
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