Despite Deep Federal Cuts, Medicaid Expansion Continues to Benefit States

The sweeping health care cuts enacted by Republicans in the 2025 budget reconciliation legislation (H.R. 1) take direct aim at states that expanded Medicaid coverage to low-income adults aged 19–64 under the Affordable Care Act (ACA) by imposing new eligibility restrictions on beneficiaries through work reporting requirements and limiting states’ ability to tax health care providers to raise revenue to fund their programs. With many state legislative sessions drawing to a close, it is clear that despite these cuts, even policymakers in red states understand how critical Medicaid expansion is in providing coverage to their constituents and how the program benefits their state economies.

Trigger Laws and Repeal Proposals Test Expansion’s Staying Power

Medicaid expansion has slashed the number of uninsured Americans over the last decade; closing the health care coverage gap in 40 states and Washington, D.C. Expanding Medicaid has increased health care affordability, kept low-income families out of medical debt, improved their financial wellbeing, strengthened the financial stability of hospitals and other providers, and delivered significant economic benefits to states.

Yet even with these clearly documented gains, the reality of implementing H.R. 1 led lawmakers in at least three states to seek to eliminate their coverage expansions — so far, all unsuccessfully.

Oklahoma

Oklahoma lawmakers recently came close to putting questions regarding Medicaid expansion back in front of voters this November — years after the public’s 2020 decision to enshrine expansion in the state Constitution. The 2020 action protected expansion from short-term political vulnerability and ensured longer-term stability. Multiple proposals moved through the legislature this year, including a House Bill and a Joint Resolution, culminating in an effort that would have asked voters to decide in November not only whether to institute a trigger law (allowing the legislature to end expansion) but also whether to remove Medicaid expansion from the state Constitution.  However, with an unlikely coalition of opposition from Republicans, including Freedom Caucus members, and Democrats — and with concerns of potential voter confusion — none of the ballot proposals gained enough traction to move forward.

Idaho

Idaho’s Medicaid expansion repeal bill stalled in committee. Instead, the legislature enacted cuts to some specific critical Medicaid services, including disability provider pay rates, which some state lawmakers viewed as a more palatable alternative to full expansion repeal. Governor Little previously  indicated he didn’t support a full repeal of Medicaid expansion at this time, instead recommending these significant cuts.

South Dakota

South Dakota’s House of Representatives squashed (39–27) a resolution that would have sent a full expansion repeal proposal to voters. Instead, this fall voters will decide whether their state should set a “trigger law” that automatically ends Medicaid expansion if federal financial support drops below 90 percent. Several states, including Illinois, New Hampshire, Ohio, and North Carolina, have passed similar trigger laws. However, given that the federal government has never changed the Medicaid expansion matching rate, trigger laws don’t present an immediate threat to Medicaid expansion in states.

Currently, nearly 89,000 Idahoans, 30,000 South Dakotans, and 240,000 Oklahomans remain eligible for comprehensive health coverage through their states’ expanded Medicaid programs. Even though these efforts failed, advocates should remain vigilant for future repeal efforts in these and potentially other states and continue to highlight the strong case for keeping expansion, particularly as new state lawmakers take office after the November elections.

Despite New Restrictions from H.R. 1, States Would Benefit from Medicaid Expansion

Despite the hurdles H.R. 1 put in the way, Medicaid expansion is popular and lawmakers continue to advocate for it even in nonexpansion states. Lawmakers in Florida and Mississippi debated Medicaid expansion in the 2026 legislative session, and South Carolina has proposed a partial expansion of its own.

Families USA has delved more deeply into the fiscal case for Alabama and Mississippi post-H.R. 1, which we explore further in a companion blog, Post-H.R. 1, the Fiscal Case for Medicaid Expansion in Holdout States Remains Strong. These analyses outline the millions in lost state revenue and economic growth by states’ refusal to expand Medicaid — even in the post-H.R. 1 landscape. This economic reality coupled with the lack of interest in full or swift repeal of other states’ existing policies illustrates not only how critical the expansion program is for states’ residents and health care systems, but also how impactful it can still be for states’ budgets even if they have not yet expanded Medicaid.

Read our COMPANION BLOG. In addition, FUSA continues to monitor Medicaid expansion-related trends across states; please reach out to healthpolicy@familiesusa.org for more information or to discuss this topic further.