The recent budget resolution passed by the House of Representatives proposes significant spending cuts, including approximately $880 billion from programs under the jurisdiction of the House Committee on Energy and Commerce, which encompasses Medicaid. This proposal has raised concerns about potential reductions in Medicaid funding, a program that currently provides health coverage to over 72 million Americans. As part of our blog’s ongoing exploration of the editorial decision to focus on “Political Determinants of Health” in 2025, this post will delve into the critical role Medicaid plays in the U.S. healthcare system. Then we are obligated to examine the potential population health impacts from such substantial funding cuts.
Until recently, the primary talking points about Medicaid were which states (South Carolina and Ohio) might implement work requirements for Medicaid eligibility, and who might walk them back. Health services researchers were looking into alternative payment models and ways to align program financing to improve access to primary care. In the past few years, this blog has even outlined road maps toward “Medicaid for All” and “Medicare Advantage for All” frameworks. Political circumstances and the conversations surrounding them change fast these days.
History of Medicaid
Medicaid, established in 1965 under Title XIX of the Social Security Act, is a joint federal and state program that provides health coverage to eligible low-income individuals, including families, children, pregnant women, elderly adults, and people with disabilities. Each state administers its own Medicaid program within broad federal guidelines, resulting in variations in eligibility criteria, benefits, and payment rates across the country.
While both Medicaid and Medicare were created in 1965, each serves different populations and operates under distinct structures. Medicare is a federal health insurance program primarily for people aged 65 or older, regardless of income, as well as certain individuals with disabilities. In contrast, Medicaid assists those with limited income and resources, offering benefits that Medicare typically does not cover, such as long-term nursing home care and personal care services.
Over the years, Medicaid has undergone significant changes to expand coverage and services [pdf]. Initially, it was available only to individuals receiving cash assistance, but subsequent legislation broadened eligibility to include more low-income children and adults. The Affordable Care Act (ACA) of 2010 further expanded the program by allowing states to cover nearly all low-income adults with incomes up to 138% of the federal poverty level. As of August 2021, 38 states and the District of Columbia had adopted this expansion. Medicaid covers a comprehensive range of services, including hospital and physician services, laboratory and X-ray services, home health care, and nursing facility services for individuals aged 21 or older.
Public Opinion
Public opinion in the United States consistently reflects strong support for the Medicaid program. According to a recent KFF Health Tracking Poll, 69% of Americans hold favorable views of Medicaid. This support spans across political affiliations, with 76% of Democrats, 63% of independents, and 69% of Republicans expressing favorable opinions. Notably, 62% of voters who supported President Trump in the 2024 election also view Medicaid positively.
Support for Medicaid also varies across different demographic groups. The same KFF poll indicates that 71% of Black respondents and 77% of Hispanic respondents have favorable views, compared to 67% of White respondents. Income levels also play a role in these perceptions: 82% of individuals with household incomes less than $40,000, 81% of those earning between $40,000 and $89,999, and 70% of those with incomes of $90,000 or more view the program favorably.
Further insights from a polling experiment reveal that public support for health policy proposals increases when they are framed as expansions of existing programs like Medicaid. The experiment found that including the name “Medicaid Buy-In” in descriptions of health policy proposals increased approval by 5 percentage points, from 50.1% to 55.1%. This suggests that familiarity with and trust in existing programs like Medicaid can enhance public support for their expansion.
Impacts of Cutting Medicaid
The proposed $880 billion cut to Medicaid over the next decade, as outlined in the recent House budget resolution, would have profound effects on healthcare coverage and community well-being across the United States. Estimates suggest that such a reduction could result in somewhere between 20 million and 15.9 million individuals losing their coverage, disproportionately affecting low-income families, children, pregnant women, seniors, and people with disabilities.
The impact of these cuts would vary by region, with each congressional district potentially losing an average of $2 billion in funding over ten years. Notably, nine states have “trigger laws” that require termination of Medicaid expansion if federal funding is reduced. For example, in Illinois, about 3.4 million residents rely on Medicaid; and studies show significant funding reductions could jeopardize their access to essential healthcare services. Such widespread loss of coverage would likely lead to increased uncompensated care, placing additional financial strain on healthcare providers.
Uneven and inequitable
Medicaid cuts would also significantly reduce access to dental care, particularly for low-income adults. Many states may be forced to eliminate or scale back adult dental benefits. This could lead to worsening oral health disparities, with more individuals experiencing untreated dental conditions, increased emergency room visits, and greater overall healthcare costs.
Cuts to Medicaid would be particularly devastating in rural areas, where many healthcare clinics and community programs rely heavily on federal funding to operate. Reduced Medicaid funding could force clinics to close or scale back services, leaving vulnerable populations without access to essential healthcare and housing support.
Furthermore, the reduction in Medicaid funding could have a ripple effect on public health initiatives and preventive care programs, leading to increased long-term healthcare costs and poorer health outcomes for communities nationwide.
Impacts on Industry
Beyond individual coverage losses, the proposed Medicaid cuts could have broader economic repercussions. Nonprofit hospitals, which often serve a large number of Medicaid patients, could face reduced reimbursement rates, threatening their financial stability and potentially leading to service reductions or closures. This scenario would not only limit healthcare access but also result in job losses within the healthcare sector, adversely affecting local economies.
Medicaid Managed Care Organizations (MCOs) also play a significant role in the healthcare industry, with contracts from the federal government forming a substantial portion of their business. As of 2022, 282 Medicaid MCOs operated across the U.S., with over 63% of enrollees covered by just 16 multi-state parent firms. Among these, five publicly traded companies—Centene, UnitedHealth Group, Elevance Health, Molina, and Aetna/CVS—account for half of all Medicaid MCO enrollment. These firms, ranked among the Fortune 500, depend heavily on Medicaid contracts to sustain their business models, making any large-scale funding cuts a major financial risk for the industry.
If Medicaid funding is reduced, these companies could see significant declines in revenue, potentially leading to service reductions, narrower provider networks, or even market exits in some states. The impact would extend beyond corporate losses—millions of beneficiaries could experience disruptions in coverage and care as insurers reassess their participation in the program. Additionally, non-profit MCOs and regional providers that lack the financial reserves of large corporations may struggle to remain viable, leading to reduced competition and fewer choices for enrollees. Cuts to the program would not only strain healthcare access for low-income populations but also create instability within the broader health insurance market.
Cutting Funding for Medicaid Will Increase Homelessness
Reducing Medicaid funding by the amount currently proposed would have dire consequences for individuals at risk of or currently experiencing homelessness. While the exact structure of the cuts remains uncertain, the outcome is clear: millions of Americans would lose access to medical care, long-term support, and specialized services that help stabilize housing. Medicaid has become a cornerstone of public assistance, particularly for those experiencing homelessness, at least in expansion states.
Medicaid plays a vital role in homelessness prevention and intervention. Many residents of Permanent Supportive Housing depend on the program for healthcare, and its expansion under the Affordable Care Act significantly improved access to medical services for people experiencing homelessness. Additionally, Medicaid funds key housing-related services through mechanisms such as 1115 and 1915i waivers and in-lieu-of-services provisions, which support tenancy, housing navigation, and even limited rental assistance.
Without these supports, individuals facing housing insecurity would have fewer resources to maintain stable living conditions, exacerbating the homelessness crisis. By limiting access to these critical services, Medicaid cuts would not only worsen health outcomes but also contribute to rising rates of homelessness, creating a broader social and economic crisis.
In Conclusion
Medicaid plays a vital role in the U.S. healthcare system, providing coverage to over 72 million low-income individuals, including children, seniors, and people with disabilities. It is a program with broad public support, with 77% of Americans viewing it favorably across political and demographic lines. Decades of expansion have reinforced Medicaid’s role in ensuring access to essential health services, from preventive care to long-term nursing home support. However, the proposed $880 billion budget cut threatens to undermine this critical safety net, potentially stripping healthcare access from millions and placing additional strain on hospitals, healthcare providers, and local economies.
The consequences of these cuts extend beyond individual coverage losses. They could destabilize nonprofit hospitals, increase uncompensated care, and widen health disparities across vulnerable populations. Economic analyses suggest ripple effects, including job losses in healthcare and negative impacts on state economies. Fiscal responsibility is an important goal. However, the potential harms of deep Medicaid cuts are extensive and potentially debilitating for the people and the country. As policymakers debate the future of the program, they must weigh the significant public support for Medicaid against the long-term consequences of reducing access to healthcare for some of the nation’s most vulnerable populations.
Ben King