Understanding Medicaid and Congress’ Potential Cuts to the Health Insurance Program

Should the president sign the bill as is, millions of low-income Americans and their families will lose access to health insurance. Without insurance, individuals can’t access primary or specialty care and will be forced to receive costly emergency department care when their symptoms worsen—a shift that creates worse health outcomes for Americans and significant financial strain on the hospitals providing their care. 

The Americans whose Medicaid coverage is most at risk are those who qualify for the program in the “expansion adult group”—a group authorized as eligible for Medicaid, at state option, under the Affordable Care Act (ACA) and who earn up to 138 percent of the federal poverty level (FPL). For an individual living in one of the 41 states (including Washington, D.C) that have taken up Medicaid expansion, that’s $21,597. But the bill also makes changes that put coverage for children, older Americans and people with disabilities at risk. 

Depending on the design of each state’s Medicaid program, which is jointly funded by the federal government and states, expansion enrollees can access comprehensive mental and physical services, dental care, and in some states, non-medical interventions related to housing, transportation and food. Medicaid enrollees don’t have to pay premiums and pay low co-payments, if any. Medicaid is a stabilizing force for low-income people, encompassing caretakers, children, older Americans, people with disabilities and pregnant folks, among others. It also is the largest payor of long-term care services in the country, helping to ensure older folks can receive a broad range of medical, personal care, rehabilitation, social services and nursing home care, if they need it. By ensuring people have affordable coverage that provides access to health care, Medicaid helps its enrollees work and take care of their families, go to school, and avoid impossible decisions about whether to see a doctor or buy food, for instance. Most important, it gives people a shot at maintaining some sense of physical and mental well-being. Most Americans know someone on Medicaid (if they themselves aren’t insured through the program), whether a family member, friend or employee. 

Significant drivers of coverage losses and funding cuts are several requirements in the bill that make it harder to get into and to keep Medicaid coverage. If enacted, the bill will mandate work requirements to be eligible for Medicaid expansion coverage. This means that people applying for or renewing Medicaid will have to prove that they have worked or participated in community service (among other activities) for 80 hours in at least the prior month. The vast majority of Medicaid enrollees already work or take care of family members. This requirement risks terminating Medicaid coverage because people get tripped up on proving to the government that they work (e.g., filling out paperwork improperly or missing filing deadlines). A few states, such as Arkansas, had already implemented work requirements, and studies on their initiative found work requirements not only to be costly to implement but also ineffective at boosting employment among enrollees, in addition to causing coverage loss for eligible people. 

Other provisions in the One Big Beautiful Bill Act will cause nearly 600,000 children and more than 200,000 pregnant people, parents and caretakers of dependent children to lose health coverage. All these coverage losses are estimated to generate $1.02 trillion in federal Medicaid expenditure cuts, according to Manatt Health’s state impact assessment, produced with input from State Health and Value Strategies.  

The One Big Beautiful Bill Act also will make changes in current coverage programs for middle-income people. With the advent of ACA Health Insurance Marketplace in 2013, individuals in expansion states making above 138 percent of the FPL and those in non-expansion states making more than 100 percent of the FPL can also qualify for health coverage and receive tax subsidies to make the plans more affordable. In the last 15 years, healthcare has become more affordable for many people. If it passes, the One Big Beautiful Bill Act would make cuts to tax subsidies and make it harder for people to enroll in and keep their Marketplace coverage. Altogether, it is estimated that 16 million Americans will become uninsured by 2034 from these cuts, including 7.8 million Medicaid enrollees and 8.2 million Marketplace enrollees, according to the Congressional Budget Office.  

There is still more to do to make health insurance accessible and affordable for people, and there is a solid foundation in Medicaid and the ACA Marketplace on which to build. 

This bill, if it passes, would make unprecedented cuts to Medicaid and ACA Marketplaces that will reverberate throughout our country for decades. 

The AFT believes that everyone should have access to affordable healthcare and opposes these Medicaid cuts. For more information on how you can make your voice heard, go to https://www.aftvotes.org/issues/medicaid.