Medicaid Budget Cuts Could Affect Millions, Strain State Resources

House Republicans have advanced a budget plan proposing approximately $880 billion in Medicaid cuts over the next decade to offset $4.5 trillion in tax cuts, a move estimated by the Urban Institute to potentially leave 11 million Americans without health coverage.

Medicaid remains the largest public health program in the U.S., covering over 72 million people, including a significant share of births, long-term care, behavioral health services, and support for older adults and people with disabilities.

The Congressional proposals could shift more Medicaid costs to states, including imposing per capita caps on federal funding, reducing support for Medicaid expansion, and instituting work requirements for eligibility. States, which currently receive 56% of their federal funding from Medicaid, may face difficult choices such as raising taxes, cutting other budgets, or reducing Medicaid benefits and enrollment.

These cuts risk reducing access to essential acute and long-term care services and could jeopardize rural hospitals that heavily depend on Medicaid funding, potentially impacting entire rural communities economically. The timing comes as states also face reductions in other federal health funding, further straining their ability to compensate for Medicaid cuts and sustain critical health services.