The Medicaid program, probably a future subject of funding cuts by the Trump Administration, provides healthcare coverage to the poor and disabled, and pays for about one-fifth of all healthcare spending in the country.
Because of its wide reach into all pockets of healthcare, some of which may be surprising, it is important to know how the program works.
Medicaid is a particularly large amount of assistance to pregnant women and to nursing home residents. With total spending in 2023 of $872 billion, it pays for about 40% of all births in the country, and for more than 60% of all nursing home resident care, according to KFF, a not-for-profit research organization.
It has not been announced which parts of Medicaid are likely to lose funding, and understanding how cuts would affect the program is difficult because of its complicated structure. Medicaid is a joint effort between states and the federal government in which the federal government pays for the lion’s share of the spending, and each state’s program varies in how it funds and covers healthcare.
But there are general categories of membership that are typically consistent from state to state, according to Shawn Stack, a policy director at the Healthcare Financial Management Association.
Though specific eligibility rules vary by state, eligibility is assigned to specific populations within a framework set up by the federal government, setting categories for such members as low-income families and children, pregnant women and people with disabilities.
Cuts to the program could come in many ways, because there are multiple funding mechanisms within the program tied to such things as indigent care through a drug payment assistance program known as the 340b program and through another program called the disproportionate share hospital program.
“[Republican lawmakers] are looking at programs like Medicaid that contribute to a lot of federal spending,” Stack said. “In that, Congress is exploring things like work requirements, where able-bodied adults can get back into the work climate and get employee-sponsored care.”
Congress is also examining fraud, waste and abuse of Medicaid – for example, working to ensure that benefits are extended only to individuals who need them.