Rita M. Landgraf was the secretary of the Delaware Department of Health and Social Services from 2009-17.
Delaware is approaching a pivotal moment in health policy, with both real opportunity and real risk. State leaders are planning to use new federal Rural Health Transformation Program funds to support innovation and improve care delivery, particularly in underserved communities. That work is necessary. But it should not distract from a far more consequential challenge: permanent reductions in Medicaid funding that threaten Delaware’s health and long-term care systems.
As federal policy changes begin to take shape in 2026, the stakes are heightened by Delaware’s demographics. The state’s population is aging, and many older adults and people with disabilities rely on Medicaid not only for medical care but for long-term services and supports that allow them to live at home and remain engaged in their communities. Hospitals, primary care practices, behavioral health providers and long-term care agencies — particularly in rural areas — also depend on Medicaid to sustain essential services. As a result, Medicaid policy carries outsized importance for the state’s stability and resilience.
It is important to be clear about the nature of the new Rural Health Transformation Program funds. While these grants represent new spending in a technical sense, they were established alongside of — and as a partial offset to — permanent reductions in Medicaid. They are time-limited, discretionary funds intended to help states manage transition and disruption. They were never designed to replace Medicaid’s role as the backbone of healthcare financing. When the grants expire after five years, the Medicaid reductions will remain.
That distinction matters. Each year federal Medicaid funding is reduced, the impact compounds. Over time, fewer federal dollars will flow into Delaware, placing increasing pressure on state budgets, provider reimbursement and the availability of services. For rural communities — where provider margins are thin, workforces are constrained, and access is already fragile — the cumulative effect could mean service reductions, delayed care and weakened local health infrastructure.
Medicaid supports both sides of Delaware’s care system. It helps stabilize healthcare providers, while financing long-term services and supports, such as home health, personal care, adult day services and support for family caregivers. These home- and community-based services are strongly preferred and widely recognized as more cost-effective than institutional care. Sustained Medicaid reductions threaten that balance, placing pressure on providers and undermining the infrastructure that allows individuals to remain independent, safe and connected to their communities.
Delaware’s focus on transformation planning is appropriate — but it is not sufficient on its own. Planning that centers primarily on short-term grants risks underestimating the long-term consequences of permanent Medicaid reductions. Transformation efforts cannot succeed if the financing foundation that supports access, workforce stability and community-based care is allowed to erode beneath them.
Delaware must begin intentional, inclusive Medicaid planning now, alongside transformation efforts — not after the fact. That planning should focus on reducing the cumulative impact of Medicaid reductions over the next five years and beyond. It must begin with those most affected — Medicaid beneficiaries, family caregivers and people who rely on long-term services and supports — and fully engage managed-care organizations, hospitals and health systems, long-term care providers, community-based organizations and others responsible for delivering and financing care across the state.
Delaware has a long tradition of pragmatic, collaborative problem-solving. Applying that same discipline to Medicaid planning now will help protect essential services, sustain providers and ensure that transformation efforts strengthen — rather than undermine — the foundation of the state’s healthcare system.
Reader reactions, pro or con, are welcomed at civiltalk@iniusa.org.
