Update on Federal Actions

Campus Community,

On July 4, President Trump signed into law a massive tax and spending package after passage by both chambers of Congress.

The package represents an important challenge to our entire university and especially our health care system. Specifically, it contains a significant shift in funding for the way UK HealthCare has over the past several years fulfilled its mission to treat and heal the sickest patients, particularly in rural areas of Kentucky.

Indeed, early estimates are that over the next several years that funding — supplemental payments as part of federal and state funding of Medicaid — will be reduced by hundreds of millions of dollars.

The legislative package is complex. It is nearly 1,000 pages and its details will ultimately impact every facet of our institution — health, service, research and education. We are still analyzing and understanding its specific details.

It is clear that over time we will be confronted with financial challenges and difficult decisions. We will need to think about new strategies to meet this moment, create more efficient operations to fund our work and develop and enhance more partnerships to advance our efforts.

What is also clear is this: Our mission hasn’t changed. We exist to advance this state — its health, its education and its economy. And at the direction of our Board of Trustees, we have been called to accelerate our progress, working with partners in particular, to do more than any other institution to advance the overall health of our state.

Against that backdrop, below is what we know today and how we are thinking about moving forward tomorrow.

Medicaid funding and its impact on UK and Kentucky

• The final legislative package will reduce supplemental Medicaid payments for hospitals, beginning in 2028, by 10 percent a year for several years. It will take the funding we receive for treating patients to levels far below our cost for providing the advanced, specialty care that only we offer.
• Reductions in funding can also significantly impact our efforts to extend access — particularly among rural populations that make up so much of our patient base — and for preventive services and primary care.

SNAP-Ed

• The legislative package eliminates funding for a program called SNAP-Ed (Supplemental Nutrition Assistance Program — Education).
• These are federal dollars that flow through state governments to provide nutrition education programs for people with lower incomes designed to help ensure more Kentuckians understand the importance of a nutritious and balanced diet. UK’s Martin-Gatton College of Agriculture, Food and Environment (CAFE) administers this critical program for the state through our Cooperative Extension offices.
• CAFE Dean Laura Stephenson and her team will be having conversations with the CAFE community in the coming days about how best to move forward.

Federal student loans and grants

• Additionally, the legislative package makes significant changes to some of the federal grant and loan programs for students. Those dollars typically flow directly to students and families, not the university. We are still analyzing the final package with respect to these important issues and will work closely with our students to provide counsel and support.

What do we do now and what are our next steps?

• We continue to aggressively make our case with lawmakers on future legislation and regulations that support the work we do to advance the health and well-being of this state.
• The reconciliation legislation is now law. We will work with it and with our partners in government and the public and private sectors to meet this moment and our mission of advancing Kentucky.
• With that mission in mind, we are going to plan and act thoughtfully guided by what is best for Kentucky and our university.
• To that end, we have time to respond, plan and chart a new course forward that continues to fulfill our mission in advancing this state. We will use that time — wisely and strategically.
• As much as possible, we will protect the people and programs that make real our mission to advance this state.
• We will also communicate regularly about how we are responding.

We will be updating our website devoted to monitoring federal government activities to include summaries of these issues: https://pres.uky.edu/monitoring-federal-changes-2025.

Our mission — to ensure a Kentucky that is healthier, wealthier and wiser — is more important now than ever. So, as we have for more than 160 years, we will work with a sense of commitment and purpose to create and sustain a Kentucky with a brighter future.

We were created to advance this state. We have been called to work with partners to do more than any other institution in the country to make our state healthier. That hasn’t changed. It won’t change. I remain confident that, working together, as a community and with committed partners across this state, that we will meet this moment and these challenges, too.

Eli Capilouto
President