NEW RESOURCES: Families USA Outlines How Proposed Medicaid Cuts to States Would Still Devastate Families, Health Systems, and Communities - Families USA Skip to Main Content
03.24.2025 / Press Release

NEW RESOURCES: Families USA Outlines How Proposed Medicaid Cuts to States Would Still Devastate Families, Health Systems, and Communities

Despite Claims that Patients and the Public Won’t Be Impacted, the Health and Financial Security of Our Nation’s Families Are Threatened by GOP Plans to Decimate Medicaid’s Federal-State Partnership

WASHINGTON, D.C. – Dangerous Medicaid cuts proposed by Congressional Republicans will result in millions of Americans losing their health care and would devastate state and local economies, according to two new fact sheets by Families USA. In recent weeks, Republicans have floated proposals that would devastate state budgets and force people to lose their Medicaid coverage — despite claims that the cuts would not impact patients or services. The fact sheets delve into two proposals that attempt to shield their impacts by cutting state funding for Medicaid, include changing formulas for federal matching funds for Medicaid and limiting state options to raise their share of funds to cover Medicaid beneficiaries.

If the Congress reduces the federal match under the Affordable Care Act, effectively ending the Medicaid expansion under the ACA in 40 states including DC, average state costs would skyrocket by 336%, and 20 million Americans could lose their health care. If states were no longer allowed to tax health insurers and providers to pay for Medicaid, as 49 states currently do, state governments would lose $605 billion over 10 years.

“Hundreds of billions of Medicaid cuts as proposed by House Republicans would wreak havoc on states and force them to make devastating cuts to the health care in their communities. Some of them shamelessly say these cuts won’t impact individuals, but if we eliminate these major funding streams, every state government will be forced to choose between taking health care coverage and benefits away from people, cutting payment to essential health care providers, raising people’s taxes, and maybe all of the above,” said Anthony Wright, executive director of Families USA. “Medicaid cuts to states doesn’t do anything about waste, fraud or abuse, it simply forces states into a Sophie’s Choice between bad options to cut our health care. These cuts are a blatant betrayal of the promises that Republicans made to their own voters who would be directly impacted. Americans voted to lower costs and improve access to health care, but these proposals will do the opposite.”

Proposals to reduce federal matching funds or limit states’ ability to raise money to fund the state match will:

  • Shift more health care costs to states, undermine governors and throw state budgets into chaos.
  • Force states to reduce coverage and access to essential services.
  • Strain an already overburdened hospital system.
  • NOT address underlying health care costs for consumers.

Families USA, the longtime health care consumer advocate, is organizing with groups across the nation to protect Medicaid from severe cuts, caps or other regulations that will result in millions of Americans losing access to the health care they need. Earlier this year, Families USA led hundreds of organizations to call on Congress and the Trump administration to reject cuts to Medicaid and work to make health care more affordable, not less.

For additional resources, see Families USA’s fact sheets on how work reporting requirements would undermine access to Medicaid, and on the importance of Medicaid to people, the economy and the health care system.