Georgia governor, legislature signal health care isn’t priority as federal aid losses mount

by Margaret Coker, The Current
January 17, 2026

Amid the topics covered by Georgia Gov. Brian Kemp in his state of the state address Thursday, one top of mind for many Georgians was missing: health care.

That’s a sea change from a year ago when Kemp hailed his signature policy initiatives as a role model for the nation. These included a state-managed marketplace for the federally subsidized health insurance known as Obamacare plans, a robust reinsurance system and a Medicaid work requirement experiment. The programs were designed to lower Georgia’s rate of uninsured adults — one of the largest in the nation — and increase health coverage options in rural counties by managing the cost of doing business for insurance companies.

Yet these policies are under threat this year after the U.S. Congress slashed federal funding and health care subsidy rules, according to Georgia hospital leaders and health care policy experts. Data analysis of Georgia’s health care economy and insurance markets suggest that revenue for providers, along with rates of insured Georgians, will fall off a cliff this year, leaving Georgia residents and businesses in trouble.

Neither Kemp nor the Republican leaders in the state legislature have signaled any major initiatives to address the looming federal funding cuts. State Democrats, meanwhile, are making health care issues — insurance, affordability and government subsidies — a pillar of their campaign in the race to take over the governor’s office this fall. Kemp, who is ending his second term, faces term limits and will be stepping down at the end of the year.

As the state legislature begins its session, here are some of the health care storm clouds looming for Georgia:

Hospitals

Hospitals and health care clinics are required to care for anyone who needs it and rely on both federal, state and county governments to reimburse them for that care. The new federal law known as the One Big Beautiful Bill changes the main formula through which hospitals have received reimbursements for such care provided to uninsured, often low-income, patients.

In 2025, Georgia had an estimated 1 million uninsured adults. That number is expected to rise by another 20-30% in 2026 because of the end of enhanced subsidies for so-called Obamacare plans. Yet the new reimbursement caps will lower the amount that Georgia hospitals can receive in federal funds. Hospitals in rural counties are projected to lose nearly $626 million from the federal financing cuts from 2025 to 2034, according to a study conducted by Manatt Health consultants for Georgia Health Initiative, a consortium of health care providers, academics and organizations.

Federal changes to Medicaid limit what are known as Medicaid State Directed Payments (SDPs) which is the formula that states use to reimburse hospitals for care they provide. The changes will reduce Georgia’s federal Medicaid funding by an estimated $5.4 billion over the next decade, a 13.5% cut from baseline federal hospital Medicaid spending levels.

Gov. Kemp and Republican legislative leaders have hailed a federal award of $218 million that Georgia can use to bolster hospital infrastructure, data systems and telehealth programs. That money is coming from a fund created as a way to offset criticism of the Medicaid funding cuts passed by Congress. However, the portion of money that goes to payments for health care providers cannot exceed 15%, something that many rural Georgia health care providers say won’t make up the losses they face with the changed reimbursement formulas.

Affordable Care Act

Thursday was the last day for Georgians to enroll in the health insurance plans that offer federal subsidies for adults and families that are based on income levels. In 2025, the number of Georgians buying these plans hit a record high — 1.5 million people. Congress decided to end enhanced subsidies that helped make more plans in this marketplace more affordable, a decision that has sparked double-digit percentage increases in insurance coverage.

In December, Georgia’s enrollment levels for 2026 had dropped by about 190,000 people, according to the federal Centers for Medicare & Medicaid Services and the Georgia Department of Insurance. More than two-thirds of current enrollees were automatically enrolled into the same or similar plan for this year, meaning they took no action to select a plan for next year, spokesperson Bryce Rawson said. Health care advocates predict that many of those Georgians will drop coverage when they see how much premiums have increased once they receive their first bill from their health insurance company this month.

Lower enrollment levels, meanwhile, have a negative impact on state revenues too. Georgia receives fees for every person that enrolls in these marketplace plans, and Georgia Health Initiative projects that the state will lose approximately $14 million in such fees in 2026. Lower enrollment also decreases the federal funding to the state for the reinsurance policy that has helped to stabilize the health insurance market and lower premiums for all Georgians.

Medicaid 

Medicaid funding cuts are largely due to start in 2027, and many states outside of Georgia are strategizing this year about how to find more state revenue to address the pending losses from the federal government. Medicaid is jointly financed by the state and federal governments, with the federal government contributing roughly 66% of Medicaid costs in Georgia.ix The remaining state share is funded through Georgia’s general fund, supplemented by health care taxes and transfers. While Republicans who voted for the Medicaid funding cuts say that the changes won’t affect Georgia’s elderly and children — the majority of 1.9 million people who receive Medicaid in Georgia — that may change, depending on decisions by state lawmakers to address looming funding shortfalls.

One of the main changes for the rest of the county won’t necessarily affect Georgia. Beginning Jan. 1, 2027, all states must adopt new work reporting requirements for adult Medicaid recipients, mirroring the policy experiment in place in Georgia for the last 2 ½ years. That policy, known as Georgia Pathways to Coverage, has been mired with technical glitches and red tape, causing thousands of low-income Georgians to give up on a chance for free health insurance.