Cuts to Medicaid funding, including proposals that would reduce the federal government’s share of spending for the program, could strip coverage away from 20 million people, according to latest analysis by KFF. The ripple effect across the country would force states to reconcile with unprecedented budget realities that would either lead to increased taxes for residents, soaring uncompensated care costs, drastic cuts to provider and hospitals on the frontlines of care, and ultimately, reduction in coverage and benefits for patients.
Forty-one states have chosen to expand their Medicaid programs to extend coverage to nearly all adults with incomes up to 138% of the Federal Poverty Level ($21,597 for an individual in 2025) with the federal government covering 90% of the cost for expansion enrollees. Critically, the research finds that eliminating the Medicaid expansion federal match rate would “be felt in both blue and red states.” Such a change would dramatically reverse the progress that has been made to reduce the country’s uninsured rate to an all-time low.
Below are additional insights from KFF’s research:
- “Eliminating the enhanced FMAP for adults in the Medicaid expansion…[means] nearly a quarter of all Medicaid enrollees (20 million people) could lose coverage.”
- “If states maintained their Medicaid expansion coverage in the wake of this policy change, they would need to find ways to offset the loss of federal funding. This could include increasing state tax revenues or decreasing spending on non-Medicaid services such as education, which is the largest source of expenditures from state funds.”
- “If states are unable to maintain Medicaid expansion coverage (or terminate expansion due to a trigger law), the number of uninsured would increase and could reverse gains in financial security, access to care, and health outcomes associated with Medicaid expansion.”
- “Research shows that after losing Medicaid, many people become uninsured. Increasing numbers of uninsured people could lead to loss of revenues and increased uncompensated care costs for providers.”
- “A large body of prior research shows that Medicaid expansion has helped to reduce the uninsured rate and improve health care access, affordability, and financial security among the low-income population. More recent research shows improvements in health outcomes and continues to show positive effects for providers (particularly rural hospitals) and for sexual and reproductive health.”
For more information on Medicaid’s vital role, visit https://modernmedicaid.org.