A budget resolution released by Congress to compensate for income tax relief includes tremendous cuts to existing government programs: about $880 billion over the next ten years, to be precise. These cuts come at a steep price for health (Medicaid) and food (SNAP) benefits provided by state governments to those most in need.

Here’s an easy-to-follow map of the federal-state partnership to fund Medicaid.

The proposed budget cuts will stress the existing partnership between the federal government and states and push states to either fill the deficit (which is impossible!) or cut programs/coverage, affecting over 72 million people enrolled in Medicaid. Support for each state varies: states with the lowest per capita income receive the highest federal funding. Consider these statistics:

·      About 1 in 5 people in the U.S. are covered by Medicaid (20% of the population)

·      About 4 in 10 children are covered by Medicaid’s CHIP program (40% of children)

                o    This includes at least 8 out of 10 children in poverty

In the 10 states that haven’t expanded Medicaid to more low-income adults, the median earnings qualification level is $5,947 a year for a single-person household in 2025. Those who make more are not eligible. Consider that for a second: if you earn 6,000/year, meaning $500 a month, you are now ineligible for free healthcare!

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Impact of the Proposed Cuts

Several options are being considered to implement the cuts, including:

·      Work requirements: The logic is that adults without a disability and without children should work and roll off of Medicaid. However, considering that many on Medicaid have low-wage jobs, they would continue to require this support.

·      Monitor eligibility: This can become cumbersome especially for those who may not have a phone and live in rural areas

·      Reducing the federal match for state Medicaid expansion

·      States could raise resident taxes or cut funding on K-12 education

Reducing Medicaid coverage will prevent timely care for low-income adults, pregnant women and those with disabilities and raise the risk of poor outcomes in the long run. This can boomerang and lead to higher overall costs for the healthcare ecosystem from increased uncompensated care. Additionally, cuts in Medicaid spending will affect clinics, hospitals, nursing homes, and healthcare systems who are the recipients of these monies, affecting their budgets and in turn and staffing.

On the line here are people’s health, financial health of healthcare providers, and state economies.

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Photo credit: TheWorthy Goods on Unsplash

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