Today we're going to talk Medicaid. This is an attempt to super simplify an incredibly complex topic so I know I am missing important details which is why it's ALWAYS important to consider anything like this a datapoint in decision making.
I started out the morning with a chat with Gemini to build a baseline here:
As you can imagine this wasn't super helpful for interpreting the One Big Beautiful Bill impact on Medicaid but it's a start. So let's dig a little deeper.
What is Medicaid?
Medicaid is essentially health insurance for specific groups of people. At the federal level basic guidelines are set around eligibility and covered services. Certain groups like pregnant people, elderly, children, people with disabilities, and people living at a certain percentage of the poverty level are protected under federal guidelines.
The states administer the program within the federal guidelines with their own eligibility criteria, additional services covered, payment rates. This is why Medicaid looks so different from state to state.
The federal government shares a percentage of the cost in what's called Federal Matching Costs (varies by state, states that receive the most federal assistance are poorer and generally *cough cough* redder). States pay for the rest with sales tax, income tax, and provider taxes which is a tax on healthcare provider revenue that the states then use to fund medicaid costs (t.
Who uses Medicaid?
- 41% of US children are on Medicaid
- 60+% of people living in nursing homes are covered by Medicaid.
- 86% of schools use medicaid funding to pay for school services like OTs, PTs, SLPs, nurses that help kids manage diabetes and asthma adn keep them out of the hospital.
What does the Big Beautiful Bill propose with Medicaid?
Here is my basic interpretation:
- Work requirement: which states like Arkansas did and while only 5% of Medicaid recipients didn't meet the requirements a much higher rate were dropped due to red tape and administrative burden. Spoiler alert: It didn't increase workforce participation because these people were already working!
- Reduced federal contribution, leaving states to fund more of medicaid
- Limiting provider taxes (yes, the same provider taxes states use to fund Medicaid)
- More frequent eligibility checks (aka more paperwork and more staffing requirements at the state level)
- Higher cost sharing with individuals using medicaid
What does this mean for me?
We can look at the ten states that opted not to expand medicaid as an example of what can happen here.
Hospitals and healthcare facilities shut down: These states have almost double (and in some states 3x!!) the rate of uncompensated care, forcing them to cut staff and specialist services, and close down hospitals and healthcare facilities. L&D units are usually the first to go because of the cost to operate and low reimbursement rates (but women and children??!).
Economic impact: Less healthcare jobs = massive job loss. People without health coverage save for health costs and do not spend money. People without healthcare won't seek care for illnesses, leading to more community illnesses and lost productivity.
High costs for everyone else: All of this leads to higher insurance premiums for those of us with private insurance due to less people participating in the system, longer waits for healthcare, reduced access to specialists as many would have to close down, increase in illness, and lost workplace productivity.
Tax hikes and public service reductions: States will have to make difficult decisions with the slash in funding like reducing eligibility, changing definitions of "necessary" services, raising taxes to support healthcare, and cutting funding from other vital sources (education is always the first) to fund healthcare.
Early death, increased illness: Millions of people who lose their Medicaid coverage will be forced to make decisions between putting food on the table and going to the doctor. They will put off healthcare until it's an emergency which is always more costly to society. Many will die.
School services go away: While children are supposedly protected in the bill, it is likely that many families will lose their coverage due to the increased hurdles to getting and maintaining healthcare. 80% of schools say they will have to cut school health services (SLPs, OTs, nurses, etc) and 70% believe they will have to cut mental health services. This will result in kids missing more school, schools being less safe, teachers and administrators needing to fill the gaps left by professionals > less focus on classroom time > burned out teachers > lower quality services for students with disabilities and the general student population.
Nursing homes: While the bill doesn't propose direct cuts to nursing homes, it's unlikely that states will be able to maintain the same level of funding to these facilities resulting in less staff, lower quality of care, and worse outcomes for residents.
Medicaid cuts will have a massive ripple impact on everyone, and it's crucial to make your voice heard in this argument.
Read More:
Explainer: Provider Taxes (congress.gov)
How Medicaid Impact Health (Healthline)
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