The Human Cost of Cutting Medicaid

On May 13, in Washington, DC, protesters packed the hearing room as members of the House Commerce and Energy Committee moved what President Trump has called a “big, beautiful bill” through the markup process. The bill aims to reduce spending by $880 billion over the next 10 years, largely through cuts to Medicaid. By the end of the session, 25 activists—several in wheelchairs—were arrested after putting their bodies on the line to draw attention to the harm that Medicaid cuts would inflict on vulnerable communities.

Across the country, nearly 80 million people—children, senior citizens, people with disabilities, parents, and adults with dependents—rely on Medicaid and the Children’s Health Insurance Program (CHIP). According to an estimate by the nonpartisan Congressional Budget Office, the Medicaid provisions in the GOP tax bill would lead to 10.3 million people losing their Medicaid coverage and 7.6 million people going uninsured.

Nearly 80 million people—children, senior citizens, people with disabilities, parents, and adults with dependents—rely on Medicaid and the Children’s Health Insurance Program (CHIP).

As data from the Economic Policy Institute (EPI) show, White people are the largest racial demographic of Medicaid users in raw numbers, but Black and Latine people are proportionally more likely to rely on it for healthcare coverage. More than half of Black and Latine young people rely on either Medicaid or the Children’s Health Insurance Program (CHIP) for healthcare coverage. Potential cuts to these programs would impact the benefits of more than six million Black youth and more than 10 million Latine youth.

In all, the EPI estimates that over 13 million Black Medicaid recipients and more than 19 million Latine Medicaid recipients are at risk of losing benefits under the bill.

Increased Long-Term Costs

One has to look no further than the 10 states that have not expanded Medicaid—most of them in the South—to see the human cost of withholding this critical healthcare coverage. A 2019 report from the Center on Budget and Policy Priorities found that while Medicaid expansion saved over 19,000 lives between 2014 and 2017, state decisions not to expand Medicaid led to over 15,000 premature deaths during that same period. In non-expansion states, the workforce is largely made up of low-wage Black and Latine workers who are uninsured or underinsured through their employers.

Though GOP members of Congress have proposed implementing work requirements for Medicaid, the vast majority of people who receive Medicaid are already working or are unable to do so because they are disabled, have caretaking responsibilities, or are in school. The Center for American Progress has warned that “work reporting requirements would inflict widespread collateral damage, including hundreds of thousands of children losing Medicaid coverage, massive job losses, and tens of thousands of avoidable deaths.”

“Cuts to Medicaid will make low-income workers, non-workers, and their families poorer and less able to afford health care, especially those who are Black or Hispanic.”

As a program that provides healthcare to the most marginalized individuals—those with disabilities, pregnant people, low-income households, low-income seniors, among others—cuts to Medicaid will have the potential to worsen economic disparities and exacerbate both generational wealth and health outcomes.

“Cuts to Medicaid will make low-income workers, non-workers, and their families poorer and less able to afford health care, especially those who are Black or Hispanic,” the EPI noted.

While the proposed GOP budget aims to decrease federal spending, research suggests that Medicaid coverage, especially for children, provides a significant return on investment through improved long-term health and economic outcomes. Cuts to Medicaid now, researchers argue, will cost the federal government more in the long run.

Hits to Hospitals and Providers

“I’m super worried about my patients and coworkers,” said Donna, a physician’s assistant at a large mental health nonprofit in eastern North Carolina. She asked to be identified by her first name only, for privacy concerns.

In her work, Donna performs psychiatric medication management and addiction medicine management, and estimates that at least 40 percent of her patients rely on Medicaid for their healthcare coverage. The organization Donna works for is also funded using Medicaid resources.

Hospitals and healthcare providers nationwide are often supported with Medicaid funds. In recent months, nonprofit healthcare organizations have finally begun to recover from the impact of the COVID-19 pandemic, but Medicaid cuts could reverse this progress, as more patients would be unable to pay for their care.

As the medical news outlet Chief Healthcare Executive reported, “Nearly 80 million Americans rely on Medicaid for healthcare, and if fewer people have coverage, nonprofit hospitals will likely end up providing more uncompensated care.”

This has impacts far beyond providers’ economic bottom lines. In recent years, largely in rural areas and states that have refused to expand Medicaid under the Affordable Care Act, many rural hospitals have had to close or undergo conversions because of a lack of funding, making it harder for already underserved residents to access healthcare.

Recently, Donna’s employers encouraged her to write to her Congressional representatives and urge them not to cut Medicaid. Though she is in her 60s and more readily able to retire if needed, Donna worries about how her more vulnerable coworkers and patients would be impacted by Medicaid cuts.

She raised concerns about the future of her organization’s opioid treatment grants, which are funded largely by Medicaid. “I don’t know what’s in the pipeline with that, and I’m worried about losing those,” she said.