Medicaid Expansion Cuts: Senate Finance Bill
Medicaid expansion States Face Disproportionate Cuts Under House Bill
The “One Big Beautiful Bill Act,” passed by the House, is projected to slash federal Medicaid spending by $793 billion. This could lead to 10.3 million fewer people enrolled in Medicaid and an increase of 7.8 million uninsured individuals. While not a direct repeal of the Affordable Care Act (ACA), the bill contains provisions that heavily impact states that adopted the ACA Medicaid expansion.
The congressional Budget Office (CBO) estimates that allowing enhanced ACA premium tax credits to expire would leave 4.2 million more people without insurance. The bill also makes significant changes to the ACA marketplaces.
Roughly half-$427 billion-of the federal spending reductions in the house bill target ACA expansion states. These provisions include mandates for work and reporting requirements for adults eligible through the ACA expansion,costing $344 billion. Increased frequency of eligibility redeterminations for the ACA expansion group accounts for $64 billion in cuts.
expansion states are expected to experience larger federal spending reductions and enrollment losses. Federal cuts to expansion states represent 13% of federal Medicaid spending over 10 years, compared to 6% in non-expansion states.Median estimated enrollment losses in expansion states represent 14% of projected fiscal year 2034 enrollment, versus 5% in non-expansion states. The role of Medicaid expansion in providing healthcare access is now under threat,potentially impacting millions who rely on it,and the impact on states that embraced the ACA is significant,affecting their budgets and healthcare systems. The future of healthcare for low-income individuals in these states hangs in the balance.
the Senate Finance Committee is considering changes to the House bill that could further amplify the effects on ACA expansion states. these changes include reducing existing provider taxes, but only in states that have adopted the ACA expansion. This could potentially reduce federal Medicaid spending in 22 states by tens or hundreds of billions of dollars.
What’s next
The senate will debate and potentially amend the House bill. The final version of the legislation will determine the extent of Medicaid cuts and their impact on states, notably those that expanded Medicaid under the ACA.