House Budget Bill Targets Medicaid Cuts Affecting Older Adults' Coverage

The U.S. House has passed a budget reconciliation bill proposing substantial Medicaid program changes targeting a $793 billion reduction in federal spending and a 10.3 million decrease in Medicaid enrollment by 2034. Key cost-saving measures include instituting work requirements for adults eligible under the Affordable Care Act (ACA) Medicaid expansion, promising $344 billion in savings, and repealing policies that simplified Medicaid enrollment and renewal, expected to save $167 billion. These provisions disproportionately affect adults aged 50 and older, who represent 23% of Medicaid enrollees but account for 42% of Medicaid spending due to higher health and functional care needs. The legislation’s impact extends beyond coverage cuts, potentially constraining states’ ability to increase provider payments and limiting supplemental hospital payments, with implications for care quality among older adults. Of the 22 million Medicaid enrollees aged 50+, roughly half rely solely on Medicaid, while the remainder are dual-eligible, receiving primary coverage through Medicare. Dual-eligibles command a larger share of spending because of extensive long-term care needs, with Medicaid costs for those using long-term care averaging eight times higher than others. Among older enrollees, 92% qualify either through the ACA expansion or disability-specific pathways, both heavily targeted by the reconciliation bill’s provisions. The Senate Finance Committee has released similar language that could deepen spending and enrollment reductions. The bill mandates biannual eligibility redeterminations for expansion enrollees and includes work requirements unlikely to increase employment but prone to causing coverage losses, as seen in Arkansas’s experience. These requirements particularly affect older adults, many facing barriers to employment due to illness or caregiving responsibilities. The proposed Medicaid changes coincide with new work requirements for the Supplemental Nutrition Assistance Program (SNAP), potentially compounding financial hardship for older Medicaid enrollees. This group shows high overlap with SNAP participation and elevated rates of household food insecurity compared to non-Medicaid adults. Overall, Medicaid reforms encapsulated in the reconciliation bill carry broad regulatory, market, and service delivery implications, particularly for the aging Medicaid population reliant on complex coverage and long-term care services. States that expanded Medicaid under the ACA have higher Medicaid coverage rates among older adults, highlighting regional disparities the reforms may intensify. The shifts in enrollment and funding structures may prompt states to reduce benefits or provider payments, exacerbating access and quality challenges within this vulnerable demographic. This analysis underscores the need for stakeholders to monitor the evolving legislative landscape and assess its effects on Medicaid's capacity to support older adults’ health and care needs effectively.