Lame Deer, Montana — Montana was supposed to be next. The state had passed legislation, finalized licensing rules, and was weeks away from joining 25 other states that reimburse doulas through Medicaid. Then the state health department quietly pulled the plug.
Officials cited a projected $146.3 million shortfall in federal Medicaid funds. The decision caught advocates off guard — and it almost certainly won’t be the last cut.
Across the country, states are starting to trim “optional” Medicaid services ahead of what promises to be a far bigger reckoning. The One Big Beautiful Bill Act, signed last year, is expected to reduce federal Medicaid spending by nearly $1 trillion over the next decade. The big cuts don’t hit until 2027 and 2028. But states are already doing the math — and the first thing they’re cutting is anything not required under federal law.
Home care, dental, and more on the chopping block
When Medicaid gets squeezed, optional services go first. That includes home health care, dental coverage, doula support, and personal care services — the kind of support that helps seniors and people with disabilities stay in their homes instead of moving into nursing facilities.
Montana’s health chief told state lawmakers in March that “all options are on the table” when it comes to further reductions. Idaho is considering its own Medicaid rollbacks for people with disabilities. Missouri has proposed cutting tens of millions from disability care programs.
These aren’t hypothetical threats. They’re already happening.
What this means for nursing homes
Nursing homes have a direct stake in what happens to optional Medicaid services. Home and community-based care is what keeps a significant portion of frail seniors out of long-term care facilities. When those supports disappear, the people who were relying on them don’t simply manage without help — they eventually end up needing placement.
That dynamic is already well-documented. Research has shown that cuts to Medicaid home care funding push vulnerable older adults toward nursing home placement, often earlier than they or their families expected. The concern now is that pressure is arriving on multiple fronts simultaneously — federal cuts, state budget gaps, and reduced optional services all converging at once.
The timing matters. States are cutting now partly because Medicaid costs came in higher than expected this year, and partly because they know the federal match rate is about to fall. That combination leaves very little cushion anywhere in the system.
The wider picture
Montana’s doula program cancellation is a small thing in isolation. But it’s a signal of how states are thinking about their budgets right now — and the decisions being made in state capitals today will shape what Medicaid looks like for nursing home residents, their families, and the facilities that rely on Medicaid reimbursement for the majority of their revenue.
Montana’s department spokesperson said it’s “unclear” whether doula coverage can even be authorized this year. One nonprofit leader in the state called it “the first of many rollbacks and cuts Montanans will face.”
If she’s right, nursing home operators should be paying close attention — because their residents, their pipeline of new admissions, and their funding all run through the same Medicaid system that states are starting to pick apart.
