On Feb. 25, House Republicans passed a budget resolution that orders the Energy and Commerce Committee, which oversees Medicare and Medicaid, to find $880 billion in savings from fiscal years 2025 through 2034. The budget resolution does not specify how the committee must cut costs by $880 billion, but Medicare and Medicaid are by far the largest programs under its oversight.
The analysis assumes that per capita caps, which would limit the amount of money the federal government contributes per Medicaid enrollee, would be a likely mechanism to achieve the projected $880 billion in savings because earlier Republican healthcare proposals have included these caps as a means to limit federal Medicaid spending.
The new report examined the potential consequences of implementing per capita caps on Medicaid spending and eliminating the enhanced federal match for states that expanded Medicaid programs under the ACA. Medicaid expansion states receive additional funding called the enhanced Federal Medical Assistance Percentage, or enhanced FMAP.
Per capita caps would result in the largest cuts to federal spending. If per capita caps are introduced while the enhanced Federal Medical Assistance Percentage continues, federal spending would drop by $700 billion to $1.1 trillion over the next 10 years. If the enhanced FMAP is eliminated but per capita caps are not implemented, the federal spending reduction would be $563 billion during the same period.
States with lower per capita income would be the most impacted, specifically Arkansas, Kentucky, Louisiana, Mississippi, New Mexico and West Virginia.
The analysis used two previous Republican healthcare proposals — the Better Way plan from 2016 and the American Health Care Act from 2017 — to estimate the potential impact of the proposed Medicaid cuts. Both plans suggested similar reductions in Medicaid funding, including per capita caps and cuts to the federal match rate for Medicaid expansion. While both plans proposed cuts, the Better Way plan called for an immediate reduction in the federal match rate, while the AHCA allowed for slightly more growth in federal funding over time.
If Medicaid cuts occur and state governments want to maintain current Medicaid standards, they would likely have to raise taxes, reduce spending on other programs, or make cuts to Medicaid benefits and provider payments.
The below ranking shows the percentage increase in Medicaid spending required in each state from 2026 to 2035 if per capita caps and FMAP cuts are implemented, assuming current Medicaid standards are maintained. Estimated spending increases under both the Better Way and American Health Care Act models are shown.
Alabama
BW impact: 20.1%
AHCA impact: 36.4%
Alaska
BW impact: 23%
AHCA impact: 29.4%
Arizona
BW impact: 41%
AHCA impact: 52.4%
Arkansas
BW impact: 32.1%
AHCA impact: 59.2%
California
BW impact: 24.5%
AHCA impact: 33.9%
Colorado
BW impact: 31%
AHCA impact: 40.3%
Connecticut
BW impact: 23.1%
AHCA impact: 31.5%
Delaware
BW impact: 31.8%
AHCA impact: 41.4%
District of Columbia
BW impact: 32.4%
AHCA impact: 56.7%
Florida
BW impact: 9.4%
AHCA impact: 18%
Georgia
BW impact: 14.6%
AHCA impact: 27.5%
Hawaii
BW impact: 31.7%
AHCA impact: 43.2%
Idaho
BW impact: 40.7%
AHCA impact: 57.3%
Illinois
BW impact: 27.9%
AHCA impact: 34.7%
Indiana
BW impact: 44.6%
AHCA impact: 51.8%
Iowa
BW impact: 30.3%
AHCA impact: 45.4%
Kansas
BW impact: 12.1%
AHCA impact: 22.4%
Kentucky
BW impact: 46.2%
AHCA impact: 67.4%
Louisiana
BW impact: 41.4%
AHCA impact: 60.3%
Maine
BW impact: 17.9%
AHCA impact: 32.6%
Maryland
BW impact: 28%
AHCA impact: 35%
Massachusetts
BW impact: 13.1%
AHCA impact: 22.9%
Michigan
BW impact: 32.4%
AHCA impact: 48.4%
Minnesota
BW impact: 20.5%
AHCA impact: 29.8%
Mississippi
BW impact: 21.5%
AHCA impact: 42.4%
Missouri
BW impact: 29.4%
AHCA impact: 43.1%
Montana
BW impact: 44.2%
AHCA impact: 58.9%
Nebraska
BW impact: 37.2%
AHCA impact: 46.6%
Nevada
BW impact: 39%
AHCA impact: 52.4%
New Hampshire
BW impact: 25.8%
AHCA impact: 36.8%
New Jersey
BW impact: 25.8%
AHCA impact: 36.5%
New Mexico
BW impact: 48.6%
AHCA impact: 67.7%
New York
BW impact: 27.9%
AHCA impact: 39.4%
North Carolina
BW impact: 54%
AHCA impact: 64.4%
North Dakota
BW impact: 32.7%
AHCA impact: 41.7%
Ohio
BW impact: 29%
AHCA impact: 45.2%
Oklahoma
BW impact: 42.2%
AHCA impact: 52.6%
Oregon
BW impact: 49.5%
AHCA impact: 60.5%
Pennsylvania
BW impact: 21.3%
AHCA impact: 34.5%
Rhode Island
BW impact: 27.9%
AHCA impact: 38.1%
South Carolina
BW impact: 19.9%
AHCA impact: 34.5%
South Dakota
BW impact: 30.8%
AHCA impact: 40.5%
Tennessee
BW impact: 15%
AHCA impact: 25.1%
Texas
BW impact: 10.6%
AHCA impact: 20.2%
Utah
BW impact: 38.1%
AHCA impact: 51.1%
Vermont
BW impact: 16.8%
AHCA impact: 27%
Virginia
BW impact: 26.4%
AHCA impact: 36.8%
Washington
BW impact: 32.7%
AHCA impact: 39.5%
West Virginia
BW impact: 40.2%
AHCA impact: 66.9%
Wisconsin
BW impact: 12.1%
AHCA impact: 21.4%
Wyoming
BW impact: 7.5%
AHCA impact: 13.6%