As the government shutdown continues—insurance and federal subsidies at the center of debate—it’s the right moment to step back and assess what policy changes over the last 6 months and those proposed to go into effect could mean for your practice. While some states are poised for revisions of Medicaid coverage, others will stand. Meanwhile, ACA subsidy changes, as outlined in the One Big Beautiful Bill passed in July, could influence coverage and patient affordability as early as 2026. What does this mean for you as a dental practice owner?

Why DSOs Care More Today

For years, buyers discounted Medicaid-heavy practices because volatility in reimbursement and eligibility made future cash flows harder to defend. That view is evolving at the edges. Some funds are building platforms in access-to-care niches, creating a pathway for Medicaid–heavy practices to exit in a way that maximizes value.

Medicaid Changes are not One-Size-Fits-All for Dental Practices

While Medicaid is state–administered, it receives financial support from the federal government. When federal dollars tighten or requirements change, governors and legislatures choose how to balance the math. Recent moves have included across-the-board rate trims, code-specific adjustments, and, in some cases, protecting certain categories while reducing others. For example, for North Carolina, they applied a 3% cut to dental reimbursement rates, while other specialties, such as ophthalmology, were hit with an 8% reduction. Other states have proposed focusing their cuts on adult Medicaid and preserving pediatric Medicaid. In these cases, it is to the benefit of pediatric dental practices.

What Medicaid cuts mean for dental practices overall:

• If Medicaid is a meaningful share of your collections, watch your state’s policy calendar, effective dates, and code-level updates. Small percentage changes at the fee schedule level can move margins quickly.
• If Medicaid is minimal or non-existent in your payer mix, the market tends to view you more favorably because reimbursement risk and authorization friction are lower. Lower risk usually commands higher multiples, all else equal. DSOs will continue to seek practices like yours.

What’s Coming in 2026: OBBB and ACA Subsidies Could Pressure Demand Starting in 2026

Looking to 2026, the OBBB impacts ACA premium tax credits in ways that can affect patient behavior. If enhanced subsidies lapse at the end of 2025, many self-employed patients and small-business employees will face higher premiums to keep comparable coverage. When premiums rise, some households downshift plan richness or drop coverage entirely. Dental visits tied to those households tend to soften, especially elective or non-urgent care.

Without proper planning dental practices will potentially see a dramatic drop in patients in 2026. If you’re considering a sale, remember that buyers look back 12 months. Depending on timing, a 2026 process may reflect those headwinds and price differently than a 2025 go-to-market.

What Policy Changes Mean for Dental Practice Valuations

DSOs will calibrate valuation to perceived risk. Here is how the current policy landscape shows up in diligence and deal terms:

• Payer mix quality carries more weight. Collections split by Medicaid, commercial group, Marketplace exchange, and self-pay will be scrutinized state by state. Practices with limited Medicaid exposure and a stable commercial base typically see tighter QoE adjustments and stronger valuations.
• State exposure matters. The same Medicaid percentage can be priced differently depending on your state’s recent and anticipated actions. Clear documentation of your reimbursement history, denial rates, and utilization trends by payer helps defend value.
• Resilience beats peak performance. Demonstrating the ability to maintain volume and margin under different coverage scenarios earns a premium. Think waitlist depth, hygienist productivity, and insurance verification efficiency as proof points that demand is real and repeatable.
• Controlling the narrative wins. Practices that show mastery of their policy exposure, explain 2026 scenarios credibly, and outline measured steps to mitigate downside will avoid retrades. We’ve guided these conversations for our clients and implemented creative deal structures, including earn-out and other tools, so sellers can reposition and still realize the valuation.

What Should Dentists Do Now

1. Know your state. Understand your state’s Medicaid changes that are already in effect or proposed, with dates and the specific dental codes or categories likely to move.
2. Quantify your mix. Tag every dollar by payer category and track trends monthly. If a large share of your patient base pays for their own insurance and receive large ACA subsidies or work for small businesses, assume 2026 could bring some coverage churn and plan for it. If Medicaid exposure is material, monitor authorization, coding accuracy, and throughput so you can protect margins if rates shift.
3. Pressure-test your valuation. If you want an honest read on how Medicaid shifts and OBBB-era coverage trends could affect your outcome, we will run a complimentary, confidential TUSKVal™ and turn the findings into a market plan that protects value on both price and structure.