MEDICAID AND MEDICARE BACKGROUND
Medicaid provides health insurance to adults and children with limited income and resources. Medicare provides health insurance to people aged 65 or older and younger people with disabilities. Medicaid and Medicare were established in 1965 as part of the Great Society's social welfare programs under President Johnson. The programs were created to address the lack of adequate health insurance and access to health care experienced by many Americans. In 2024, the United States had a population of 340 million people with over 67 million enrolled in Medicare, over 71 million enrolled in Medicaid, and as of November 2024, 37.5 million children were enrolled in Medicaid and Children’s Health Insurance Program (CHIP).
CUTS TO MEDICAID
In FY 2024, the federal government spent $1.9 trillion on health care programs and services. Federal spending for Medicare accounted for $874 billion, just over half of mandatory spending on all federal health programs and services. Federal spending for Medicaid accounted for $618 billion. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which included state and local tax deductions, tax cuts, additional funding for border security, and defense. The bill also included significant funding reductions to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), reducing the federal match rate for Medicaid expansion, implementing work requirements, and shifting more costs to states.8 The Congressional Budget Office estimates that the bill will increase the national deficit by $3.4 trillion and 10 million Medicaid recipients will lose health insurance coverage over the next 10 years.
ALL MEDICAL PROVIDERS WILL BE IMPACTED
The loss of Medicaid funding leads to a decrease in patient access to services and, therefore, financial instability for medical providers. Many medical practices rely on Medicaid dollars to keep their doors open and without it, it is expected that many medical facilities and practices will have to make massive cuts to staff and services or ultimately close.
EARLY CHILDHOOD WORKFORCE RELIES ON MEDICAID
A healthy and well-supported early childhood education (ECE) workforce is vital to support young children’s healthy development and parents’ ability to work. The lack of public investment in early childhood education combined with the high cost of providing quality care has strained the child care system and destabilized the early childhood education workforce. Inadequate wages and benefits are large drivers of child care workforce challenges, and additional cuts to these already insufficient benefits will exacerbate the various challenges already plaguing this workforce.
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