The Defunding of Medicaid: The Basics

Introduction

Medicaid, as defined by the United States Department of Health and Human Services, is a ‘joint federal and state program that helps cover medical costs for some people with limited income and resources.’ Medicaid is an incredibly important program for the U.S. people, as it helps those who need medications and other forms of treatment but are struggling financially! Furthermore, Medicaid additionally provides nursing home services and care, and personal care services. Unfortunately, however, Medicaid and its users will be seeing  a troubling  near future. 

Medicaid vs Medicare

We’ve established earlier that Medicaid is a joint state and federal program in the United States that serves the people by providing free or low-cost coverage to eligible individuals and families. However, Medicare is often confused with Medicaid. Their names aren’t the only things similar, and the two can be easily distinguished from each other! Here’s a simple guide, with the information taken from the National Council on Aging (NCOA), that presents the similarities and differences between Medicaid and Medicare. 

Medicaid

• To qualify, age varies. 

• To qualify, income varies. 

• Coverages: 

• Federally required: Inpatient hospital and skilled care services, outpatient hospital, doctor, and healthcare visits, routine screening and diagnostic tests, transportation to medical care, dental care, certified pediatric and family nurse practitioner services, and much more!

•  Optional (State determined): Prescription drugs, dental services and dentures, vision and hearing care, services for those with intellectual disabilities living in an intermediate care facility, and much more!  

• Costs: 0 costs for those whose incomes are lower than 150% of the federal poverty level. Additionally, states are restricted on what they require for enrollment to pay! The total amount of those paying out of pocket cannot exceed 5% of a family’s income. 

Medicare 

• Age: 65 and over except those who have end-stage renal disease, ALS disease (Lou Gehrig’s), and those who receive Social Security Disability Insurance (SSDI)  for over 24 months. 

• Income: No requirements 

• Coverages: 

• Original Medicare (Parts A and B): Diagnostic and laboratory tests, mental health care,  durable medical equipment, inpatient hospital and skilled care services, ambulance services, and outpatient, hospital, doctor, and home health care visits.  

• Medicare Advantage (Part C): Required- Everything originally covered in Medicare Parts A and B. Optional- Vision and hearing care, dental care, certain wellness services, prescription drugs.  

• Medicare Prescription D: Features included will differ depending on the plan. 

Overall, remember that Medicaid eligibility is primarily based on financial need, whereas Medicare eligibility is based on age or disability status!

Fun Fact: It’s totally possible to be part of both Medicaid and Medicare! In order to do this, though, NCOA mentions that you would need to be 65 or older first.

The Benefits of Medicaid

If eligible, a person can get a lot from the coverage given by Medicaid. For example, those able to qualify for its services will receive comforts such as: 

•  Hospital services

•  Emergency services

•  Preventive care

•  Maternity and newborn care

Of course, this means that Medicaid is a huge deal and is very important for Americans. In fact, Medicaid reported that as of May 2025, over 70 million Americans are depending on Medicaid for their medical services and health! 

The Big Beautiful Bill and Medicaid

In an article published July 3, 2025, authors Mia Ives-Rublee and Kim Musheno reported that on that same day, July 3rd,  a bill titled the “Big Beautiful Bill” was passed by Congress and approved by President Trump on the 4th. The nonpartisan Congressional Budget Office (CBO) estimated that this budget bill would cut 1.02 trillion dollars from Medicaid and Children’s Health Insurance programs. If done, this would leave around 10.5 million Medicaid users to be removed from the program by 2034.

Furthermore, NeW federal limits will also be installed, meaning that citizens will need to meet higher criteria in order to be insured by Medicaid. As a result, an even greater number of people will be cut from Medicaid by 2034. To add, a decrease in patients coming to receive medical services will also be found since hospitals and clinics will either be forced to or will need to find better funding or reduce services, workers, benefits, a mixture of these,  or even multiple of these. This budget bill will also attempt to waver the coverage given for those who do not meet the criteria but are in need for institutional care by giving an additional $50 million dollars in 2026 and an additional $100 million dollars in 2027 for funding.

However, the problem in this is that despite these additional funds, it would only cover around 27 people per state! This additionally doesn’t account for rising inflation and overhead costs while states deal with massive funding loss. To make matters worse, this would only increase the waiting time for patients! If so, this would even lead to ineligibility for those wanting to enroll in the incredibly beneficial program.

What Defunding Medicaid Means for Americans 

The budget cuts that will be made to Medicaid has the potential to cause 7.6 million people to lose health insurance. Unfortunately, the consequence to this doing would lead to thousands and thousands of preventable deaths. Annals of Internal Medicine, an academic medical journal published by the American College of Physicians, reports in a published analysis study that 2 million people would lose their primary doctor, 1.3 million people would lose necessary, expensive medications, and over 380,000 women will skip mammograms. Only worsening the situation, over 16,000 preventable deaths are expected due to a rise in chronic illness. 

Center sues Trump Over the Defunding 

The Center for Reproductive Rights, a global human rights organization,  reported that on July 16, they filed a lawsuit in the interests of Maine Family Planning (MFP), Maine’s largest network of reproductive care health clinics. The Big Beautiful Bill includes arrangements that would prevent both MFP and Planned Parenthood from receiving federal medical reimbursement. The lawsuit aims to challenge this. The Big Beautiful Bill aims to target healthcare  organizations and facilities that provide abortions without federal Medicaid reimbursement.

They are suppressed from using the insurance for non-abortion related services including STI testing, cancer screenings, primary care, routine OB/GYN visits and contraception. MFT manages 18 clinics across Maine, with many of those clinics in rural areas where access to care is limited. The clinics are the sole provider for 70% of their patients and almost half of those patients are enrolled in Medicaid.  

Final Thoughts

It is of utmost importance that this country’s citizens will still be able to access and freely apply to be part of Medicaid, as well as other health insurance programs that keep thousands of people healthy and even alive. We can’t predict the future, but we can educate and learn to help others. 

Once again, thank you so much for reading.

Written by Gabrielle B and researched by Keegan W

2025 The HEAL Project