In late February, the House passed a budget resolution that aimed to cut federal spending by up to $2 trillion over the next decade.
The Republican-backed plan calls for at least $880 billion in spending reductions through 2034, with Medicaid expected to take the biggest hit. The Senate is expected to vote on the legislation in April.
Healthcare leaders — from hospitals and health systems to ASCs and physicians — have voiced significant concerns over how the cuts may negatively impact healthcare access and organizations’ financial stability.
Here are seven other things to know about where Medicaid cuts stand:
1. Medicaid and the Children’s Health Insurance Program, which provide health insurance coverage to almost 80 million Americans, are jointly funded between the federal and state governments. The federal government matches state Medicaid spending through a formula called the Federal Medical Assistance Percentage, which varies by state.
2. Currently, the federal government covers up to 90% of costs for Medicaid expansion enrollees in the 41 states (including the District of Columbia) that have adopted the ACA’s expansion.
3. However, proposed changes from House Republicans could significantly alter this arrangement. The proposals include implementing per capita spending limits, introducing work requirements and reducing the enhanced Federal Medical Assistance Percentage from 90% to each state’s standard Medicaid matching rate, which ranges between 50% and 74%.
4. If all 41 expansion states were to roll back Medicaid eligibility due to federal funding cuts, nearly 11 million individuals would lose health coverage, according to a report released March 11 by the Urban Institute and the Robert Wood Johnson foundation, which examined the potential consequences of these funding reductions on Medicaid expansion programs.
3. Medicaid cuts could leave many hospitals struggling to operate, particularly in rural areas where Medicaid is often a financial lifeline. The potential cuts come at a time when 432 rural hospitals are already at risk of closure.
4. The report also found that hospitals in general have the most at stake in the potential cuts, and are projected to face a $31.9 million revenue cut in 2026 alone.
5. Office-based physician services could see $6.4 billion in lost funding. Other healthcare sectors — including dental care, home healthcare and services from nonhospital providers — could see a $20.7 billion reduction in spending.
6. The burden of unpaid medical bills would rise by $6.3 billion.
7. The proposed cuts in federal Medicaid funding could also lead to the loss of 477,000 healthcare jobs in 2026, according to a report published March 25 by the Commonwealth Fund and the Milken Institute School of Public Health at George Washington University.
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