Medicaid Cuts: What Recipients Need to Know

The Medicaid program will face $1 trillion in cuts over the next decade, affecting nearly 12 million recipients. Eligibility requirements will change, limiting retroactive coverage and pushing up the verification date. The program's changes will severely impact healthcare coverage, particularly in rural areas, and states will bear more of the costs. Approximately 71 million Medicaid recipients should be aware of these changes.

The Medicaid program, a vital healthcare safety net, is set to face significant cuts amounting to $1 trillion over the next decade. This substantial reduction in funding will affect nearly 12 million recipients and significantly alter eligibility requirements. The changes include limiting retroactive coverage and pushing up the verification date, which will have severe implications, particularly in rural areas. States will bear more of the costs, and approximately 71 million Medicaid recipients should be aware of these changes.

The cuts are expected to impact healthcare coverage, with rural areas likely to be disproportionately affected. States will need to absorb a larger share of Medicaid costs, which could strain their budgets and lead to reduced services. The delayed implementation of many of these cuts, set to begin after midterm elections in 2026, is a strategic move that may not be immediately apparent to voters.

Beyond healthcare, the cuts will also have a significant impact on education. Medicaid funds an estimated $7.5 billion annually to support essential services for student learning and development. These funds cover speech, physical, and occupational therapies, specialized medical equipment, assistive technologies, and transportation. They also help pay for the salaries of school nurses, psychologists, speech therapists, and other professionals who work directly in schools. Mental and behavioral health services, which are increasingly critical in schools, will also be affected.

School districts are already planning for reduced services and potential staffing cuts. A recent survey of 1,440 school district leaders revealed that 80% expect reductions and layoffs of school health staff, 70% anticipate cuts to mental and behavioral health services, and 62% foresee reductions in assistive technology and specialized equipment for students with disabilities. The survey also highlighted that many rural schools serve as primary healthcare providers, making them particularly vulnerable to the loss of Medicaid funding.

The broader costs of Medicaid cuts extend beyond healthcare and education. An estimated 17 million people are expected to lose coverage as restrictions on enrollment are implemented, and the coverage others have will be less comprehensive. Twelve states have "trigger laws" that would automatically end their Medicaid expansion if federal funding drops below 90%, potentially leaving millions more adults without coverage. Additionally, the cuts to the Supplemental Nutrition Assistance Program (SNAP) will eliminate or reduce food assistance to the families of 1 million children, further straining families and schools.

The delayed implementation of these cuts, after midterm elections, is a strategic move that may not be immediately apparent to voters. However, school leaders across the country are already planning for reduced services and potential staffing cuts. The Broader Costs of Medicaid Cuts Beyond the funding that will be cut from school budgets, there will be other spillover effects from the recent bill as Medicaid and Medicare cuts, along with loss of tax credits for other insurance, affect families. An estimated 17 million people are estimated to lose coverage as restrictions on enrollment are implemented, and the coverage others have will be less comprehensive, leaving many services unreimbursed. Twelve states have “trigger laws” that would automatically end their Medicaid expansion if federal funding drops below 90%. This would drop coverage for millions more adults and create severe pressure on state budgets. Furthermore, projected closures of nursing homes and hospitals, particularly in rural areas, will leave families under strain to care for those who are elderly, ill, or disabled, and will reduce access to medical care for entire communities. Compounding all of these cuts are reductions to the Supplemental Nutrition Assistance Program (SNAP), the federal food assistance program, as the federal government reduces its contribution to SNAP by an estimated $186 billion through 2034. The Center on Budget and Policy Priorities estimates that this will eliminate or substantially reduce food assistance to the families of 1 million children. Further, if students become ineligible for SNAP or Medicaid, they could also lose access to other school-based assistance programs, including free meals, since school districts often use SNAP or Medicaid eligibility to determine eligibility for other programs, such as free and reduced-price lunch. All of these factors will lead to additional strains on families, with direct impacts on children and schools. As a school business official in a rural Michigan district noted: When there are strains on families, schools fill in the gaps and swoop in to support the student. Not only would the decrease in direct funding to school programs and personnel impact us, [but] the cuts to our families’ budgets [also] increase the needs at school. Families won’t be able to feed their students, send them with school supplies, provide them with winter

The 2025 budget legislation represents a massive shift that will affect the learning and development of millions of students across every school district in the country over the coming decade. The delayed implementation of many of these cuts—after voters making midterm election decisions in 2026—is no accident. Voters may not yet have seen school nurses laid off, therapy services eliminated, and other cuts to general education programs. For their part, school leaders across the country are already planning for reduced services and potential staffing cuts.

References:
[1] https://www.forbes.com/sites/lindadarlinghammond/2025/07/16/medicaid-is-more-than-health-insurance-its-a-lifeline-for-public-schools/