What the Medicaid Cuts Mean for American Healthcare

For many of us, being sick is just a part of living a full life. Perhaps we get injured, falling off a bike; we catch a cold from a friend with a sniffle, or maybe even our bodies contract some sort of disease when we travel - all part of living life.

When we’re sick, understandably, we seek care. Perhaps when we’re young, it’s the comfort of a bandage and some rest. As we get older, maybe it’s the words of a medical professional and some more targeted assistance. For those who don’t have the means to afford health insurance, programs like Medicaid help bridge the gap, ensuring that nobody is left behind when they’re unwell.

While Medicaid is an important policy, it’s also expensive, and in recent times, there has been pressure from lawmakers to make changes to Medicaid and the coverage it provides. No matter whether you’re a patient, a student undertaking online accelerated BSN programs, or a professional in the healthcare sector, understanding how these cuts could impact you is vital. Let’s explore these potential changes and what they could mean for the healthcare industry.

What is Medicaid?

For many of us, Medicaid is a name that is often in the news, but less often at the front of our minds. What is Medicaid, exactly?

Medicaid, simply put, is a government program designed to help cover medical costs for those who have limited income or resources. It’s a program that aims to help those in our community who are least likely to be able to cover the cost of healthcare on their own, to ensure that they go out and seek healthcare when they are unwell, and that they have the confidence, knowing that these costs are supported.

This has a positive impact on the healthcare system. If people who are supported by Medicaid know that they can get support and not be financially burdened, they’re more likely to come out and seek help, rather than try and hide away a condition. This helps to reduce the risk of unknown medical conditions getting far worse, and costing far more when left untreated for an extended period, as people are encouraged to seek treatment as soon as it’s required.

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How Big is Medicaid?

The Medicaid program is one of the largest sources of health insurance that exists in the United States. Founded in 1965, it has grown to be the largest health insurance provider, with data published in January 2025 noting that more than 71 million people were enrolled in Medicaid programs across America. On average, one in five Americans has Medicaid coverage.

Undoubtedly, covering the insurance of 71 million Americans comes with a substantial price tag. In the 2023 financial year, a total of $860 billion was spent on Medicaid funding, with more than two-thirds of that covered by federal expenditure.

While Medicaid offers substantial benefits for those who can least afford healthcare in our society, it is often asked by lawmakers whether it offers effective value for money. For every two dollars spent on Social Security, a dollar is spent on Medicaid, according to data published by the Congressional Budget Office. In times where the U.S. budget operates under trillion-dollar deficits, critics of Medicaid question if it offers value, rather than simply being a drain on limited U.S. budgetary incomes.

What Are The Proposed Changes?

There are a number of different proposed changes under consideration, each offering a different path forward for Medicaid. These also offer substantial challenges - asking the public to reconsider what it means to be a healthcare recipient in modern America.

One proposal recently passed by Congress suggests that the introduction of work requirements for those without young dependents or disabilities may be an option. It’s argued that if people can find work, they can find the means to no longer require the assistance of Medicaid, reducing the healthcare burden on the community. While seemingly straightforward, critics question whether this would actually make a difference, given that the eligibility requirements for Medicaid also cover those on low incomes.

An alternative proposal suggests limiting costs, whether through reducing the amount the federal government pays for services (currently about two-thirds of all Medicaid costs) or restricting the ability of states to recover costs via other means. While these changes may reduce the amount of money spent by Medicaid, they could also have lasting consequences on the healthcare sector, reducing the amount of money that can be spent on patient care.

No matter the changes introduced, the cost savings could be substantial. Some estimates predict that there could be reductions in the hundreds of billions of dollars over a decade, reducing the burden of the Medicaid program on the federal budget, in an effort to manage and mitigate the cost of this program.

The Impact of Medicaid Cuts

What are the impacts of cutting Medicaid, though? While on paper, cost reduction may seem like a good thing, ultimately, any such change will have an impact on the people and the communities served by Medicaid programs.

Less funding ultimately means less money flowing into the healthcare sector, and subsequently, fewer healthcare workers. This has a knock-on effect - with fewer workers, patients may have longer wait times for care; they may receive an inferior level of care than what was previously available.

This can then have further knock-on effects, fewer workers, less care, longer times to identify and treat conditions, and potentially higher healthcare costs in an attempt to treat conditions that are not caught early. Ironically, Medicaid cuts may have the opposite effect from what is desired - it could cause healthcare costs to increase, while offering a lower level of care, at greater cost to the community.

It’s important that policymakers consider the impacts of their actions. Cuts represent a change to the status quo and could have serious effects on healthcare professionals and their capability to treat the most vulnerable in our society.

Healthcare will always represent a substantial part of the American experience. When we are sick, healthcare is there to help mend us. Ultimately, the question now becomes, what will that care look like for those that are most vulnerable in our society, when the funding available to support care is reduced?

(Disclaimer: Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)