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Medicaid Cuts Continue to Loom as Congress Advances Budget Debate

Amy E. Lowenstein

Since our update last month, Republicans in the U.S. House of Representatives pushed forward a budget resolution on February 25th threatening to drastically cut Medicaid coverage: "Every member of Congress who voted for this budget resolution just voted to cut health care coverage for 800,000 Pennsylvanians…Make no mistake: if this were to become law, it would have devastating impacts on the health care folks all across our Commonwealth rely on,” Manuel Bonder, a spokesperson for Governor Josh Shapiro, told WESA, Pittsburgh’s NPR station.

The House budget resolution, which narrowly passed with a vote of 217 to 215 primarily along party lines, calls for the House Committee on Energy and Commerce to identify at least $880 billion in savings from the matters over which that committee has responsibility, which includes Medicaid. Although the resolution does not explicitly instruct the committee to reduce Medicaid funding, House leadership has consistently indicated that this is the goal, and achieving $880 billion in savings without cutting Medicaid funding is virtually impossible. The House plans to use the money saved from gutting Medicaid, which provides critical health care to people with the lowest income, to extend tax cuts for the wealthy.

The budget process is still in its initial stages, but can progress rapidly at any point.  The Senate has also approved its own budget resolution emphasizing defense, energy, and border spending, while postponing the extension of tax cuts to a future budget resolution. For progress to be made, both houses must agree on a unified budget resolution, which has not yet happened. Following that, various congressional committees will determine how to implement the budget resolution, which is when policies cutting Medicaid could be developed. Ultimately, both houses must pass the budget legislation that implements these policies. With major decisions still looming, the actions taken in the coming months will shape the future of Medicaid funding and healthcare access for millions.

 

What’s at Stake for Pennsylvania?

Cuts to Medicaid would significantly impact Pennsylvanians, particularly older adults and people with disabilities, who represent nearly 80% of Pennsylvania's Medicaid spending.  

Without Medicaid, many would struggle to manage, treat, or prevent health issues. Medicaid is vital to maintaining strong communities and putting more money in families’ wallets, thereby bolstering local economies and driving economic growth. Here’s how Medicaid is essential for Pennsylvania:

  • Supporting Parents & Families: Medicaid covers 35% of all births in Pennsylvania, ensuring access to necessary prenatal, maternity, and postpartum care.
  • Caring for Children: Over 1.25 million children in Pennsylvania rely on Medicaid, including children with special healthcare needs, those from low-income families, and children in foster care.
  • Paying for Long-Term Care: Medicaid is the main payer for in-home services like home care, allowing older adults and people with disabilities to remain in their homes and communities. Medicaid also pays for nearly two-thirds of all nursing home care in Pennsylvania.
  • Promoting Mental Health: Medicaid is the single largest payer for mental health and substance use disorder treatment.
  • Strengthening Local Economies: Medicaid funds hospitals, health centers, and other healthcare systems that deliver essential care and services, create jobs, and support local economies.
     

PHLP firmly opposes any actions that will take Medicaid away from people or make it harder to get coverage and access care.  Implementing per capita caps, eliminating enhanced federal funding, and other proposals related to lowering federal funding for Medicaid would significantly raise Pennsylvania's costs to run the program, creating a state budget shortfall. To cope with this, the state would have to find ways to reduce Medicaid spending, which inevitably leads to cutting services, restricting eligibility criteria in order to reduce enrollment, and limiting access to home and community-based services by increasing the use of waiting lists and service caps.

PHLP continues to actively collaborate with our client community and advocacy partners to raise client voices experiences and combat initiatives that will cut health care for millions of Pennsylvanians. Our partners at Community Catalyst are collecting videos of people sharing what Medicaid means to them and the difference Medicaid has made in their life. To submit your own video recording, head to Community Catalyst's Protect Medicaid page. Additional information and advocacy resources can also be found here.  Get news updates and other Medicaid alerts by signing up for PHLP's email list.