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Millions of Americans could lose Medicaid coverage if President-elect Donald Trump follows through on his plans to reduce government spending after taking office next year. Trump has repeatedly expressed his intent to cut federal programs, with Medicaid—a critical provider of health coverage for low-income Americans—potentially among the first on the chopping block.
A study from the health policy research group KFF estimates that over 3 million Americans could immediately lose health coverage if federal Medicaid funding is reduced. This would disproportionately impact nine states with "trigger laws" that automatically end Medicaid expansion when federal funding decreases: Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah, and Virginia. Notably, six of these states—Arizona, Arkansas, Indiana, Montana, North Carolina, and Utah—supported Trump in the 2024 election.
During Trump’s first administration, efforts to repeal the Affordable Care Act (ACA), which expanded Medicaid eligibility to those earning up to 138% of the federal poverty level, faced resistance even within his party. According to Alex Beene, a financial literacy expert at the University of Tennessee, GOP senators were reluctant to remove coverage from millions without a replacement plan.
Medicaid Expansion at Risk:
Under the ACA, states expanded Medicaid programs, allowing an estimated 20 million Americans to gain coverage. Despite this success, Medicaid remains a target for budget reductions among conservatives. Beene points out that Medicaid expansion enjoys strong bipartisan support in many states, making substantial cuts politically challenging.
"Medicaid expansion under the ACA has proven very popular, especially in states where it’s been in place for nearly 15 years," Beene explains. "Eliminating funding would create healthcare and financial dilemmas for millions."
ACA Premiums Could Increase
Even if Medicaid remains untouched, enhanced ACA subsidies—set to expire in 2025—may not be renewed, leading to significant premium hikes. Kevin Thompson, CEO of 9i Capital Group, warns, "If these subsidies expire, many ACA participants could face steep premium increases."
Meanwhile, Trump’s selection of Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services underscores the administration's focus on cost-cutting. In a statement, Trump emphasized Oz's mandate to reduce agency spending and combat waste and fraud, calling Medicaid one of the nation's most expensive programs.
As the Trump administration gears up, the future of Medicaid and ACA subsidies hangs in the balance, posing potential healthcare challenges for millions of Americans.
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