If Trump reduces Medicaid funding, millions of people in nine states will lose their coverage

The Medicaid expansion under the Affordable Care Act is once again in jeopardy as Republicans take over Congress in 2025 and Donald Trump returns to the White House.

If the GOP cut the additional federal Medicaid funding that has allowed states to expand eligibility, more than 3 million adults in nine states would be immediately at risk of losing their health insurance, according to KFF, a nonprofit organization that provides health information and includes KFF Health News and the Georgetown University Centre for Children and Families.

This is due to the fact that states have trigger legislation in place that, in the event that federal money is stopped, will immediately stop Medicaid expansions.

These states include North Carolina, Utah, Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, and Virginia.

In order to cover more low-income Americans without employer-sponsored health insurance, states were encouraged to expand Medicaid programs by the 2010 Affordable Care Act.

The United States’ uninsured rate has dropped to all-time lows as a result of agreements made by 40 states and the District of Columbia to provide health insurance to an estimated 21 million individuals since 2014.

In return, 90% of the expense of serving the bigger population is covered by the federal government. The federal match for other Medicaid recipients, which is typically about 57% nationwide, is much lower than this.

The Affordable Care Act has been largely opposed by conservative policy groups, who claim that the program is too costly and covers too many people. Democrats contend that by giving coverage to those who couldn’t afford private insurance, the Medicaid expansion has improved communities and saved lives.

Medicaid expansion would be in jeopardy in all states that have opted into it, including those without trigger laws, if Congress cut federal funding, according to Renuka Tipirneni, an associate professor at the University of Michigan School of Public Health. This is because state legislatures would have to make up the difference.

According to Tipirneni, state politics would have an impact on the choice to either reverse or continue the development.

For instance, in 2013, under a Republican governor and legislature, Michigan authorized a trigger as part of its Medicaid expansion. The state removed its financial trigger last year when Democrats controlled the government.

In the 2024 election, Trump received support from six of the nine states with trigger laws: Arizona, Arkansas, Indiana, Montana, North Carolina, and Utah.

In the event that federal funding drops below 90%, most of the nine states’ triggers activate. If funding dropped to less than 80%, Arizona’s trigger would stop expansion.

The statute in Montana restricts growth to less than 90% of financing, but it permits it to proceed if lawmakers find more money. According to Montana law, the Medicaid expansion will expire unless lawmakers reauthorize it.

In states with triggers, between 3.1 million and 3.7 million individuals would rapidly lose coverage, according to research from the Georgetown Center and KFF.

The distinction depends on how states handle individuals who were added to Medicaid before the ACA expansion; they might still be eligible even if the expansion is terminated.

Though they do not immediately stop expansions, three other states—Iowa, Idaho, and New Mexico—have laws mandating their governments to lessen the financial impact of losing federal Medicaid expansion funding.

According to KFF, if those three states were added, 4.3 million Medicaid expansion enrollees would no longer be covered.

Medicaid expansions for people earning up to 138% of the federal poverty threshold, or about $20,783 per person in 2024, were authorized under the Affordable Care Act.

Now, almost 25% of the 81 million people who were previously enrolled in Medicaid participate because of Medicaid expansions.

According to Robin Rudowitz, vice president and director of KFF’s Program on Medicaid and the Uninsured, if the expansion match rate is cut, all states will probably have to consider whether to keep expanding coverage since doing so will necessitate a large increase in state spending.

The number of uninsured people is likely to rise if states reduce coverage, which would restrict access to care in both red and blue states that have embraced expansion.

States hardly ever lower eligibility for social programs like Medicaid after providing it.

According to Edwin Park, a research professor at Georgetown University’s Centre for Children and Families, the triggers make it politically simpler for state lawmakers to halt Medicaid expansion because they do not need to take any additional steps to lower coverage.

Consider what transpired following the Supreme Court’s 2022 decision to reverse Roe v. Wade and, consequently, the constitutional right to an abortion in order to comprehend the effects of trigger legislation.

Thirteen states’ conservative lawmakers had drafted trigger legislation that, in the event that the national right to abortion were overturned, would immediately impose prohibitions. Restrictions resulting from these state statutes took effect either immediately or soon after the court’s decision.

As part of Medicaid expansion, states used triggers to convince lawmakers that risking state funds for a federal program that is unpopular with most Republicans was not worth it.

A recent recommendation from the Paragon Health Institute, a prominent conservative policy organization headed by former Trump health adviser Brian Blase, may be a clue of what Trump and congressional Republicans may do with Medicaid after he assumes office in January.

Beginning in 2026 and ending in 2034, Paragon suggests that the federal government lower the 90% federal contribution for expansion until it equals the federal match for traditional enrollees in each state.

That idea would allow states to continue to receive financing for Medicaid expansion under the Affordable Care Act, but it would restrict coverage to enrollees with incomes up to the federal poverty level. Currently, states are required to cover everyone up to 138% of the poverty level in order to be eligible for expansion money.

Arizona is unlikely to remove its trigger to make up for lost federal cash, said to Daniel Derksen, director of the University of Arizona’s Center for Rural Health. He informed me that it would be difficult to sell at this time because it would significantly strain the finances.

Medicaid has historically been the target of Republican lawmakers in Washington. Legislation to cut federal expansion funding, which would have sent billions of dollars to states, was suggested by Republican congressional leaders in 2017. Ultimately, that plan—which was a component of a broader attempt to repeal Obamacare—failed.

RESOURCE

Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!