Ten states and Washington, D.C., could face a $468 billion shortfall over the next decade if Congress reduces the amount it guarantees states to run their Medicaid programs, according to a May 6 report from the Urban Institute and the Robert Wood Johnson Foundation.
The federal government has paid for at least half of every state’s Medicaid costs through the Federal Medical Assistance Percentage, which starts at a floor of 50%, according to the report. If that floor were reduced, 10 states and the district would be affected.
Researchers found that the proposed change would result in significant cuts in Medicaid support for people with disabilities ($189.5 billion), older adults ($161.1 billion), and children ($50.1 billion) across the affected states and Washington, D.C.:
| State | Children ($B) | Adults ($B) | Disabled ($B) | Elderly ($B) | Total Projected Cut ($B) |
| California | -18.7 | -28.5 | -59.3 | -50 | -156.5 |
| Colorado | -1.8 | -2.2 | -5.4 | -3 | -12.4 |
| Connecticut | -4.8 | -5.5 | -10.6 | -12.3 | -33.2 |
| District of Columbia | -1.1 | -1.6 | -4.9 | -2.7 | -10.3 |
| Maryland | -0.6 | -0.9 | -1.7 | -0.9 | -4.1 |
| Massachusetts | -6.1 | -10.4 | -38.2 | -25.9 | -80.6 |
| New Hampshire | -0.4 | -0.1 | -0.9 | -0.9 | -2.3 |
| New Jersey | -3.5 | -2.4 | -14.1 | -9.9 | -29.9 |
| New York | -8.8 | -1.6 | -50.1 | -50.1 | -110.6 |
| Washington | -4.1 | -3.7 | -8.4 | -5 | -21.2 |
| Wyoming | -0.2 | -0.1 | -0.5 | -0.3 | -1.1 |
To maintain existing Medicaid coverage, researchers said, states would need to drastically raise their Medicaid budgets — ranging from a 4.1% increase in Maryland to a 63.2% increase in Washington, D.C.
If combined with other proposed federal Medicaid cuts — such as eliminating support for expanded eligibility — the total loss in federal aid to these states and D.C. could reach $835 billion over the next 10 years, according to the report.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
