As lawmakers hash out the details of a major budget reconciliation package, Medicaid is under pressure.
The program, which covers nearly 80 million people across the country through a combination of federal and state funds, could face sweeping cuts as policymakers in Washington, D.C. seek to trim $880 billion in federal spending.
Proposed adjustments include tightening eligibility to pre-COVID levels and imposing work requirements – changes that would shrink coverage even as many families continue to struggle with rising health care costs.
State Rollback Risk Grows
Medicaid eligibility and the range of covered services vary by state, as do program names like Medi-Cal in California and Medical Assistance in Michigan and Pennsylvania. Federal incentives encouraged 40 states to expand Medicaid eligibility and services, but some states implemented laws to end expansion automatically if federal support is reduced. And few states could sustain the current levels of access without federal appropriations.
The proposed federal changes would disproportionately impact low-income populations, children and the disabled, especially if states are not able to fill those gaps. In all proposals, savings would be realized by removing coverage for some individuals.
Current Outlook
With policymakers in the House of Representatives finalizing lengthy markups, stakeholders are starting to have a better idea of what the changes to Medicaid will include. Work requirements to maintain eligibility, as well as restrictions on how states can use the provider tax to increase federal Medicaid funding have been agreed upon by Representatives.
Early estimates from the Congressional Budget Office project that the agreed-upon proposals would likely result in 8.5 million Americans losing Medicaid coverage over the next decade.
Implementing Medicaid per capita caps and decreasing the federal government’s share of Medicaid spending were both concepts that were floated, but did not make it into the most recent markup. Both would shift more of the financial burden from the federal government to states.
The Path Ahead
Uncertainty is running high in the nation’s capital as policymakers continue to weigh difficult trade-offs.
Once the legislation is voted on by the full House, it will head for the Senate. As the Senate reviews and makes any potential changes to the legislation, it will be crucial to consider the effect that cuts to Medicaid will have on the lives of millions of patients.
The coming weeks will test how far Congress is willing to go to protect Medicaid, or allow it to be reshaped. For tens of millions of Americans, the outcome will carry real-world consequences.
