(WASHINGTON) — When the White House budget office released a memo this week that instructed all federal agencies to cease spending on any financial assistance programs pending internal review, the fate of the nation’s largest public health insurance program was propelled into question.
Medicaid is a joint federal and state program that provides health care coverage to low-income individuals and families. There were over 79 million Americans enrolled in the program as of October 2024.
The online Medicaid reimbursement portal accessible by every state was reportedly down following Tuesday’s freeze announcement, despite the White House Office of Management and Budget saying in an updated memo that the program would not be affected.
On Wednesday, after being temporarily blocked by a federal judge and already facing a legal challenge from 22 state attorneys general, the freeze was rescinded.
While federal administrators and private individuals alike scramble to understand which programs could be affected by President Donald Trump’s sweeping executive orders, experts say Medicaid’s role in America cannot overstated.
“It’s really the backbone of many aspects of our health care system,” Joan Alker, executive director of Georgetown University’s Center for Children and Families, told ABC News.
From birth to elder care, Medicaid covers newborns, children, low-income individuals and families, people with disabilities and substance abuse issues, and nursing home residents, among others, according to Alker.
“I think we all need to really pay attention to what’s going on here, both in the administration but, more importantly, in Congress, where they are contemplating these very large cuts,” Alker said.
What is Medicaid?
Medicaid, which turns 60 this year, was established in 1965 as amendments to Social Security by President Lyndon B. Johnson. The program was meant to provide health insurance to individuals and families who could not afford or were not provided private insurance through employment.
Now, it’s a nearly $900 billion program funded by both the federal government and individual states, with each state administering its own eligibility, benefits and payment rates based on federal guidelines, according to the program’s website.
The federal government reimburses states for a portion of Medicaid costs through the Federal Medical Assistance Percentage program, which covers hospitals, doctors, clinics, pharmacies and nursing homes with little to no copayments by the beneficiaries, according to Medicaid.
“Medicaid serves a key role in the health insurance market, and for many people, there is no alternative,” Eric Seiber, Ph.D., a professor in the College of Public Health and director of the Center for Health Outcomes and Policy Evaluation Studies at Ohio State University, told ABC News.
“This affects Medicaid beneficiaries, but also Medicaid providers. What is often overlooked is one person’s healthcare expense is another person’s healthcare income,” Seiber added.
How many Americans are on Medicaid?
As of October 2024, the program reported that 79.4 million people were enrolled in Medicaid across the U.S. That includes 41.7 million adults enrolled in Medicaid and 37.6 million Medicaid child and Children’s Health Insurance Program enrollees.
Medicaid enrollment is on the rise, with the program seeing a 20% increase in applications since October 2023 and a 66% increase since October 2022, according to the program.
Who is eligible for Medicaid?
Eligibility for Medicaid coverage is based on income, family size, disability status and age, and can vary from state to state.
The expansion of Medicaid through the Affordable Care Act made adults with incomes of up to 138% of the federal poverty level, or about $20,783 for an individual, eligible in 2024, according to the program.
Not everyone to enrolls in Medicaid remains on it indefinitely, according to Seiber.
“Medicaid often serves as a trampoline, not a safety net. People land on Medicaid and often bounce right back off,” Seiber told ABC News of Medicaid’s role in the American health care system.
“I would say that Medicaid protects people’s health, but also their future,” Seiber added.
Medicaid during Trump’s first administration
Trump’s first administration saw threats to Medicaid and the Affordable Care Act that were ultimately rejected, perhaps most dramatically in 2017 when Sen. John McCain, who died of brain cancer the following year, returned to Washington, D.C., to vote against the so-called “skinny repeal” of the ACA and hundreds of billions in cuts to Medicaid.
Trump was attempting to replace the ACA with the American Health Care Act, which would have repealed the individual mandate and the employer mandate, amended Medicaid eligibility and weakened protections for patients with pre-existing conditions.
In December 2017, a Republican tax reform law was passed that eliminated individual mandates, which Gallup later said may have reduced participation in the insurance marketplace.
At the end of 2019, 13.7% of adults were without health insurance, the highest level seen since early 2014, according to Gallup data.
Fast-forward to the 2024 election cycle: Trump made little mention of Medicaid amid various campaign trail comments about possible changes to Medicare and Social Security.
In March, Trump wrote in a post on Truth Social that he was “not running to terminate” the ACA but said he wanted to make it “better” and “less expensive.”
During the September presidential debate, he said he had “concepts of a plan” and said it would be “better health care than Obamacare,” but offered few details.
“Medicaid will be turning 60 this year, so we are very concerned that that proposal may arise again,” Alker said of possible cuts to federal Medicaid funding.
“So our future is really at stake here, and I think with an aging population, with a growing need for long-term care, there’s no way that states can manage this,” she added.
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