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Congress Threatens Healthcare Access in 2025

Amy E. Lowenstein

Medicaid is facing significant threats as Congress considers proposals that would drastically cut federal funding for this vital program that serves 3 million Pennsylvanians. The current administration and Congress are considering significant cuts to Medicaid that would slash the safety net supporting older adults, people with disabilities, pregnant women, low wage workers, and children, all in the name of achieving savings that would allow for greater tax cuts for wealthy Americans. The potential cuts will not only restrict access to critical health care services for people in Pennsylvania but will also have a significant impact on hospitals and health care providers as well as dire repercussions for Pennsylvania’s economy.

Currently, Medicaid is funded through a partnership between the states and the federal government. The federal government contributes a percentage of a state’s Medicaid costs, known as the Federal Medical Assistance Percentage (FMAP). This percentage is determined by a state’s per capita income and cannot fall below 50%. In Pennsylvania, the standard FMAP is currently set at 56.06%.

Leaked documents from Congress indicate a plan to save $2.3 trillion by implementing harmful cuts to Medicaid that will cause people to lose coverage and make it harder for people to access healthcare.  Key proposals include:

  • Per Capita Caps: This funding model would give states a fixed amount of federal funding for each enrolled Medicaid recipient, rather than matching funds based on actual expenses. If a state's Medicaid costs exceed this cap, it would have to cover the additional costs entirely through its state budget.
     
  • Elimination of Enhanced Federal Matching Funds: In exchange for Pennsylvania expanding Medicaid in accordance with the Afforable Care Act, the federal government agreed to cover a higher percentage of Pennsylvania's Medicaid costs  for people who became eligiible due to the expansion: where usually the feds cover just around half of Pennsylvania’s Medicaid costs, they pay 90% of Medicaid costs for low-income adults who became eligible for Medicaid through the ACA expansion. Proposed cuts would remove this enhanced funding, leaving states to pick up the costs (or, cut programs to save state dollars.)
     
  • Medicaid Work Requirements: These requirements would mandate that people maintain employment to qualify for Medicaid coverage.  But in general, people on Medicaid who can work are already working. Moreover, past experiences show that work requirements do not lead to increased employment rates; instead, they result in many people losing essential health coverage and services, either because they are not able to work or because they struggle to wade through the paperwork and reporting processes that accompany work requirements. Particularly at risk are people with a disability or chronic health condition that prevents them from working; caregivers who are not able to work due to their responsibliites; low-wage workers with unpredictable work schedules or seasonal employment; and people who live in remote areas with limited job opportunities and/or lack of access to transportation.

PHLP firmly opposes any actions that will take Medicaid away from people or make it harder for people to get coverage and access care.  Implementing per capita caps, eliminating enhanced FMAP, and other proposals related to lowering the federal share of Medicaid costs would significantly raise Pennsylvania's Medicaid costs, creating state budget shortfalls. To cope with these cuts, the state would have to find ways to reduce its Medicaid costs, which inevitably leads to cutting services, restricting eligiblity to reduce enrollment, and limiting access to home and community-based services by imposing longer waiting lists and annual service caps. 

For over 30 years, the Pennsylvania Health Law Project (PHLP) has helped Pennsylvanians who depend on Medicaid for life-sustaining health coverage and care. We are actively collaborating with our client community and the broader health, disability, and legal advocacy communities to combat initiatives that will cut health care for millions of Pennsylvanians. PHLP is committed to keeping our stakeholders informed about critical developments and actionable steps through our newsletter and website, as well as timely alerts when necessary. In the coming months, we will share more information about the threats to Medicaid and how we can collectively advocate for the protection of this essential program. Together, we can protect Medicaid and prevent disastrous cuts that jeopardize access to coverage and health care services for Pennsylvanians with limited incomes, people with disabilities, and older adults.