Sharing the Facts About the State Impact of Medicaid Cuts

The Trump administration has made major cuts to federal agencies and programs that serve American taxpayers. In the health sector, that has included laying off tens of thousands of public health workers and cutting billions from programs that support children’s health and wellbeing.

At the same time, Congress is debating major reductions to federal support for Medicaid. The proposal both limits how states can fund Medicaid coverage and how older people can enroll in the program, among other things.

Medicaid, which was created in 1965, provides health care for around one in five Americans, many of whom have disabilities or low incomes. Polling shows that very few Americans want to see Medicaid coverage cut. The proposed cuts have faced criticism for risking the health care coverage of the 72 million people who use Medicaid, including children, pregnant women, and the elderly.

In partnership with the states, the federal government pays for a large portion of Medicaid coverage and sets national standards. States also contribute funding to the program and are charged with administering it to their residents—setting policy around eligibility and payments. In most states, Medicaid makes up the largest portion of their annual budget. Medicaid coverage also varies by state, depending on the number of residents using the program, who qualifies for coverage under state law, and how much states pay into the program.

Nonpartisan experts say that the current congressional proposal for the program would require cutting coverage for Americans. This could halt payments for cancer treatments, long-term care facilities, and everyday medicines like insulin. Health care costs would also shift to the states, who are already struggling with tight budgets in the wake of other federal cuts.

Here are some key takeaways about the state impact of potential cuts to Medicaid:

• Americans in every state rely on Medicaid for essential health care coverage.
  • The number of people that depend on Medicaid is striking: A fifth of Americans count on it for their health care. Among the millions who use the program are new moms, people with disabilities, and people who can’t afford health insurance. Four out of 10 children are on Medicaid.
  • Without proper coverage for life-saving care, many people will die. Others will end up in the emergency room because they lack access to regular care, and taxpayers will foot the bill.
  • We should strive to make government more efficient, but it should not come at the cost of the health of everyday Americans.
• Medicaid cuts will cause tremendous harm in rural areas.
  • The majority of people who rely on Medicaid live in rural areas, where health care is already harder to access. And a large chunk of those people are children.
  • Rural hospitals are afloat right now because of Medicaid. Cuts will mean rural hospitals will close, creating more health care deserts in states across America. That’s not good for anyone.
  • And on top of that, fewer hospitals in rural communities means a loss of key jobs—hospitals, doctors’ offices, and clinics tend to be one of the biggest employers in small towns.
• Cutting federal funding for Medicaid will drastically shift costs and responsibility to the states.
  • Medicaid is the largest source of federal funds that states receive.
  • This is a major threat to state budgets. It will hurt states’ abilities to make effective decisions about how to serve their residents. And taxpayers are going to face the burden of paying those budget deficits.
  • The Trump administration has already cut billions in funding to the states. This will put states into impossible situations, forcing them to cut essential services.
• Medicaid is popular among Americans of all political leanings, across the country.
  • Cutting Medicaid is unpopular and will cause Americans to suffer.
  • Most Americans, regardless of what party they belong to, view Medicaid favorably. Nearly everyone says Medicaid is important for their local communities.
  • Most Americans have a personal connection to Medicaid, either having been on the program or known someone close to them who has received help. Everyone will feel the pain of these cuts.