Potential Medicaid Cuts: Who Would Be Affected and What Are Republicans Proposing?

Update, 8:45 a.m. Wednesday: House Republicans on Tuesday evening narrowly passed a budget proposal that could usher in deep cuts to Medicaid.

Medicaid is a federal program that provides health care to roughly 72 million Americans, including some 14.8 million Californians. Among other kinds of care, Medicaid — which turns 60 years old this year — includes coverage for lower-income and disabled people. Among other things, it covers substance abuse programs, nursing home care, and nearly half of all births nationwide.

• Jump straight to: What would potential cuts to Medicaid look like?

Now, Republicans in Congress are proposing huge cuts — at least $880 billion — to this government health insurance program as part of a budget package that would extend and expand tax cuts for the wealthy, as well as finance President Donald Trump’s border security agenda.

Republicans have claimed that Medicaid doesn’t improve health outcomes, states inappropriately juice their federal Medicaid dollars and that shrinking Medicaid funding would improve it. But what would such deep cuts to Medicaid actually look like, and how likely are they to happen?

KQED Forum spoke to the following experts about what to know about Medicaid right now — what it does, who it serves and who would be most affected by the proposed cuts:

• Larry Levitt, executive vice president, Kaiser Family Foundation
• Joanne Kenen, journalist in-residence, Johns Hopkins School of Public Health
• Kristof Stremikis, director of market analysis and insight, California Health Care Foundation, independent nonprofit focused on improving healthcare for Californians
• Chiquita Brooks-LaSure, former administrator, Center for Medicare and Medicaid Services; served as administrator during the Biden administration from 2021–25

This conversation has been edited for brevity and clarity.

How is Medicaid different from Medicare?

Larry Levitt: Medicare is the program that covers seniors and people with disabilities. Medicaid was actually created at the same time as Medicare [in 1965.] Originally, it was connected to welfare — so it covered low-income children, single parents.

It’s been expanded dramatically over time to cover seniors because seniors on Medicare actually have a lot of costs. Big deductibles, things Medicare doesn’t cover, like nursing homes. Medicaid fills in those gaps.

Medicaid was expanded to cover [people with] disabilities and, most recently, under the Affordable Care Act, was expanded to cover all low-income people — at least in those states that choose to do that.

We think of Medicare and Social Security as kind of third rails in American politics: That if you touch them, you get burned. Medicaid has generally not been thought of in that same category, but it actually covers more people now than Medicare or Social Security.

The liberals view Medicaid as a stepping stone, as a part of our complex system, to get as close to universal coverage as we can. Conservatives view it as welfare, only for the deserving poor.

What — and who — does Medicaid cover?

Levitt: Medicaid offers very comprehensive services, [including] home care: Assistance in the home for someone who has a disability, or a senior. It covers nursing home care — institutional care for people who need that. These are people who would otherwise not be covered [by] private insurance — would not have the benefits they need to stay healthy, stay in their home [with] private insurance.

We think of it as covering these low-income people: low-income kids, low-income parents, low-income adults. In fact, over half the spending in Medicaid — [called] Medi-Cal in California — goes [to] people with disabilities and seniors.

Chiquita Brooks-LaSure: If you have a child with high needs, who’s born needing an organ transplant, most of the people who are covered in children’s hospitals in this country depend on Medicaid for their surgeries, for their drugs.

I think it’s really important that as we talk about making changes to the Medicaid program, which has long been a target and has been in the past really described as a welfare program, it is now a [lifeblood] of our health care as a country.

Kristof Stremikis: This really is a program that supports many, many people here, and people in different circumstances. And by the way, those life circumstances, as they do for everyone, they change. This isn’t one static group of people. It really is there for all sorts of Californians. It’s really important to a lot of different people.

Levitt: Certainly, if you have a job, a good job that provides health benefits, that’s how you’re going to get your health insurance. But people lose their jobs, people get their hours cut and lose their health benefits. People have an illness and can’t work anymore. And that’s what this safety net is there for.

What does Medicaid look like in California?

Levitt: Medicaid is implemented differently in every state. In some states, it’s called different things: in California, it’s called Medi-Cal. And the financing is shared between the federal government and states. So if the federal government pays — for example, in California — about half the cost, the state pays the other half of the cost. So it’s not the same thing everywhere [in the way that] Medicare is.

And that’s kind of a point of contention around Medicaid: That if a state is willing to increase its spending, then the federal government will have to increase its match. … So there’s no cap. It’s not required to be appropriated every year in the federal budget. It’s essentially automatic spending.

What would deep cuts to Medicaid look like?

Joanne Kenen: [Cutting $880 billion from Medicaid] would require a fundamental restructuring. It would not look like Medicaid looks today. It would not be an entitlement anymore: It would be what they call a ‘per capita cap.’ [Read more about this proposal for the federal government to pay states based on their number of Medicaid enrollees instead of matching a certain percentage of yearly state spending with no cap.]

Stremikis: Reductions of the sort that [we] are talking about can only really lead to three sorts of outcomes and probably some combination of all three of these.

Number one is: Fewer people will be covered by Medicaid programs, including Medi-Cal here in California.

The benefits that states are offering that are included in Medicaid health insurance, including Medi-Cal here in California, will [also] be reduced. And so, fewer things will be covered.

And then … the payments that are going into the system to providers, to hospitals, to skilled nursing facilities, to nursing homes will be reduced.

Brooks-LaSure: I think it’s really important for us to all understand how much Medicaid supports the underlying health care system: hospitals, community health centers. Medicaid is the primary payer for mental health services. … And educational services are often supplemented when you need help with your child with autism, who [has] special needs.

It also certainly would affect the states that are trying to do the right thing. So states like California, which have had a strong commitment to the Medicaid program. If there are changes made in [federal] payments, that will either put burdens on states to use their funds — state-only dollars to try to supplement coverage — or have to cut services.

How did we go from President Trump vowing to ‘love and cherish’ Medicaid to backing these cuts — and what are the chances they’ll actually happen?

Kenen: There’s been a realignment in the Republican Party, and more working-class, lower-middle-class people who are on Medicare [and] Medicaid are Trump voters. So you’ve changed the political dynamic here. Who relies on Medicaid is different than historically, as Medicaid has gotten bigger.

The Republicans have gone deep, deep, deep toward cuts. We don’t know [if] they can achieve them. We’re at the very, very, very beginning of what is a very long budget process. They passed it [in] committee. They’re having trouble getting it through the floor. It’s a very tight majority in the House. Then Trump, who’s all ‘loving and cherishing’ his Medicaid, just flipped and said he’s backing the House bill. It’s dizzy[ing].

On the other hand, they’ve been trying to [make cuts to Medicaid] since the Reagan years. Literally, this has been a priority in certain circles on the right for 45 years now, and they haven’t gotten it. And I think there’s a lot of reasons, including who is the base of the Republican Party.

It’s not going to be easy to do this. I think the odds are against [Republicans]. I mean, you can’t rule out anything anymore because things that you thought could never possibly happen are happening by the dozen, right? But it’s really, really an uphill struggle.

And you’re going to hear from the providers. If they’re going to lose $880 billion of revenue or anything close to that, they’re going to lobby, they’re going to be out there, and it’ll be their voices you hear a lot on the Hill.

What else could Republicans do to Medicaid even if this full proposal doesn’t succeed?

Kenen: There are lots and lots of other things that [Republicans] could [also] do that are less dramatic and less deep that would still mean fewer people are covered or [would] affect the expansion part of the [Affordable Care Act]. There’s lots of little things: Work requirements, even just making the enrollment process more cumbersome. You end up covering fewer people.

Stremikis: We don’t precisely know what is being considered. What we do know, though, is the federal government right now pays for between 60% and 70% of the $150 billion that’s flowing into [California’s] health care system from the Medi-Cal program. I think even under some of these small changes, we are talking about billions and billions of reduced federal dollars. … I don’t really think there’s a lot of scenarios in which California can step in and replace billions upon billions in lost federal revenue.

And so I think the question really is now for folks to decide, is this something we want, that we support? And take action.

This story contains reporting by KQED’s Grace Won, and has been updated to reflect that Medicaid turns 60 years old in 2025.