What Trump’s 2024 Victory Means for Medicaid

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With Donald Trump returning to the presidency and with a Republican controlled Congress the future of Medicaid is uncertain. While Medicaid did not receive a lot of attention directly during the campaign, if Social Security and Medicare cuts are largely off the table, Medicaid spending reductions are left as a likely source of funding to help pay for tax cuts. Trump has previously supported policies to repeal or weaken the Affordable Care Act (ACA), as well as cap and reduce Medicaid financing; however, these proposals were not able to pass Congress in 2017. With support of Congress, Trump could enact foundational changes to the program that serves 1 in 5 Americans and is the primary payer for long-term care in in the United States. Proposals from conservative groups include converting Medicaid into a block grant to states, capping federal funding on a per capita basis, and reducing federal matching funds for ACA Medicaid expansion enrollees.

Potential legislative changes to Medicaid are in addition to changes the Trump administration could make to the program through executive action, including work requirements.

Here are 3 things to keep in mind as changes to Medicaid are considered:

1. Changes to Medicaid could have major implications for people.

Overall Medicaid covers 1 in 5 people in the United States, but Medicaid has a key role for certain groups. In 2023, Medicaid covered nearly 4 in 10 children, 8 in 10 children in poverty, 1 in 6 adults, and 6 in 10 nonelderly adults in poverty. Relative to White children and adults, Medicaid covers a higher share of Black, Hispanic, and American Indian or Alaska Native (AIAN) children and adults. Medicaid covers 44% of nonelderly, noninstitutionalized adults with disabilities. Medicaid also covers 41% of all births in the United States, nearly half of children with special health care needs, 5 in 8 nursing home residents, 23% of non-elderly adults with any mental illness, and 40% of non-elderly adults with HIV. Medicaid pays Medicare premiums and often provides wraparound coverage for services not covered by Medicare (like most long-term services and supports) for nearly 1 in 5 Medicare beneficiaries (13 million). 

2. Federal cuts to Medicaid could have major implications for states.

Medicaid financing is complex. States are guaranteed federal matching dollars without a cap for qualified services provided to eligible enrollees. The match rate (known as the federal medical assistance percentage or “FMAP”) varies across states, some services and populations, and sometimes is adjusted during economic downturns. Because Medicaid is administered by states within broad federal rules, Medicaid programs and spending vary across states. Spending depends on multiple factors, including the number and mix of enrollees, their use of health care and long-term services and supports, the prices of Medicaid services, and state policy choices about benefits and provider payment rates. In 2023, the federal government paid 69% ($606 billion) of the total costs of Medicaid ($880 billion). While children and adults make up most of the enrollees, more than half of spending is for people who qualify on the basis of age or disability.

3. Proposed changes to Medicaid could come up against public support for the program.

Significant cuts to Medicaid could also run up against public opinion. Two-thirds of adults in the U.S. say they have had some connection to the Medicaid program and three-fourths of the public have favorable views of the program (with majorities across political parties). In addition, the majority of Medicaid enrollees and the public prefer to keep Medicaid as it is today with the federal government guaranteeing coverage for low-income people, setting standards for who states cover and what benefits people get, and matching state Medicaid spending as the number of people on the program goes up or down.