Harmful Impact of 2025 Congressional Reconciliation Budget Package
Mel Wilson, LCSW, MBA
Senior Policy Advisor
In May 2025, the House Republicans passed their version of the reconciliation
spending bill—officially named the “
One Big Beautiful Bill Act.” In passing its
version of the reconciliation budget, the House Republicans have exacerbated
already fierce opposition to the deep cuts to essential social safety-net
programs—mainly Medicaid and the Supplemental Nutrition Assistance
Program (SNAP)—and other critical support.
These cuts will strip millions of low-income
families, children, seniors, and individuals
with disabilities of vital healthcare access,
food security, and financial support. The
severe reduction in funding will also
worsen
the existing health disparities that impact
communities of color and rural communities.
Furthermore, a strong case can be made that
budget reductions in Medicaid and SNAP
disproportionately burdens America’s most
vulnerable
while awarding huge tax breaks to
corporations and the wealthy.
The planned cuts in the House reconciliation
budget have sparked intense criticism from
economic justice, human rights, and health
equity communities, who view them as more
evidence of favoritism toward the nation’s
super-rich. The opposition to the budget is
fueled by the widely accepted perspective
that Medicaid, Medicare, SNAP, Temporary
Assistance for Needy Families (TANF), and
other
safety-net programs serve as lifelines for
millions of Americans. According to 2019
data,
99.1 million people participated in one
of the 10 programs discussed in this brief,
representing 30% of the U.S. population.
Budget Reconciliation: Background
and Update
Budget reconciliation is a special
Congressional process governed by strict
guidelines commonly referred to as the Byrd
Rules.
Reconciliation is designed to fast-track
certain budget-related legislation, as
established by the
Congressional Budget Act
of 1974.
Both Democratic- and Republican-led
Congresses have embraced the reconciliation
rules and procedures. This is because they
allow Congress to modify spending, revenue,
and the federal debt limit without being
blocked by a Senate filibuster—meaning that
bills passed into law through reconciliation
can be approved with a simple majority
rather than the usual 60 votes required in the
Senate. Not surprisingly, the current
Congressional Republicans fully appreciate
the fact that the budget reconciliation law
provides a codified avenue for avoiding a
Democratic filibuster.
The current iteration of budget reconciliation
is structured around Republican legislation
that features President Trump’s number one
priority—tax breaks for the nation’s wealthiest
individuals and companies. The budget for
the
proposed tax cuts is set at $3.8 trillion.
Under the reconciliation law, the Republicans
are required to significantly reduce
nondiscretionary spending from the federal
budget to offset the spending for the
proposed tax cuts. The concern is that
nondiscretionary spending includes core
social safety-net programs
such as Social
Security, Medicaid, Medicare, Children’s
Health Insurance Program (CHIP), SNAP, and
other programs that assist many Americans.
The House has passed its reconciliation
package (by one vote), and we now know
that
the House has identified $1.1 trillion of
nondiscretionary funding
to be cut in order to
be in compliance with the reconciliation rules.
With the caveat that the numbers may change
given that the Senate has the last word on
what the final numbers will be, the following
is a breakdown of which safety-net programs
will feel the brunt of budget reductions.
Medicaid Cuts
As stated by the Modern Medicaid Alliance:
“Eliminating upwards of $723 billion
in
Medicaid funding goes far beyond targeting
‘waste, fraud and abuse’ as the impact to
patients will be severe. These policies
represent a fundamental dismantling of a vital
safety net program that would strip health
coverage away from millions of Americans;
cut access to essential services like primary
care and prescription medicines; and push
rural hospitals and health care providers
beyond the brink.”
This quote sets the tone for describing short
and long-term effects of impending reductions
of Medicaid as a result of the budget
reconciliation process. As previously
mentioned, the House has passed a
reconciliation bill that reduces its budget by
approximately $723 billion. The immediate
results will mean that millions of people will
lose health coverage and millions more will
see a dramatic increase in healthcare costs.
Here are some of the impacts:
- The bill fails to extend enhanced premium
tax credits
for Patient Protection and
Affordable Care Act (ACA) marketplace
coverage. If enhanced subsidies are
allowed to expire, the U.S. Congressional
Budget Office (CBO) estimates a
decrease in enrollees with subsidized
exchange coverage, resulting in a
reduction in federal expenditures. CBO
also
estimates that expiration of the
enhanced premium tax credits would
contribute to a rise in the uninsured rate.
- Codification of the Trump Administration
marketplace rule provisions, which the
House Committee on Energy and
Commerce Committee also passed, will
result in an additional 1.8 million people
becoming uninsured.
- Marketplace policies passed by the
Ways and Means Committee would lead
to an additional 2.1 million people
becoming uninsured.
- An additional 4.2 million people would
lose marketplace coverage because the
legislation fails to extend the premium
tax credit enhancements.
It must be noted that when people lose their
health coverage, they lose access to
preventive and primary care, care for
life-threatening conditions, and treatments for chronic conditions. For example, a person
with diabetes who loses health coverage
would lose the ability to properly manage
their condition and so maintain their health as
well as their employment.
Because Medicaid covers such a broad swath
of the American population, it is useful to look
at the degree to which the Medicaid budget
reductions impact specific population and
enrollee segments of the nation.
Children’s Health Insurance
Program (CHIP)
CHIP is a program offered by 14 states and
Washington, D.C. CHIP provides low-cost
health coverage to children in families that
earn too much to qualify for Medicaid but
not enough to afford private insurance—
some states also offer CHIP coverage to
pregnant women.
The House Republican Rules Committee
proposed a modification to the Republican
reconciliation legislation to cut federal
funding for states that provide Medicaid or
CHIP coverage to
lawfully residing children
and pregnant adults
. The consequence of this
provision is that the 14 states that currently
offer CHIP coverage would face a combined
$131 billion reduction in federal funding.
Also, states that do not offer CHIP, but cover
(using state money) healthcare costs for
undocumented immigrants or lawfully residing
individuals, will be penalized with a lower
federal matching rate for Medicaid expenses.
These changes could force states to reduce or
eliminate coverage, putting millions at risk of
losing access to healthcare.
Uninsured Americans
The most recent estimate of projected
uninsured as a result of the Republican
reconciliation package was published on
June 4, when the American Hospital
Association projected the
One Big Beautiful
Bill Act
(H.R. 1) would lead to 10.9 million
people becoming uninsured in 2034.
This is
due to significant changes to the Medicaid
program and ACA coverage. A follow-up
letter from the CBO provides more detail on
how these changes would impact the number
of uninsured.
As many will recall, the main justification for
creating Medicaid in 1965 was to provide
healthcare coverage for low-income
individuals and families who afford private
health insurance. Thus, it is unacceptable that
budget reconciliation significantly increases
the number of people who will be forced into
becoming uninsured. For example, CBO
estimates that, taken together, these changes
will have the following consequences:
The anticipated increase of the number of
uninsured due to the Republican-led House’s
reconciliation bill is coupled with an already precarious system of healthcare insurance
coverage among moderate and low-income
persons.
Impact on Rural Hospitals and
Primary Care Services
Rural healthcare is an issue area where
health disparities abound and where the
reductions in Medicaid assistance will be
sorely felt.
The proposed $723 billion
Medicaid cuts will have severe consequences
for rural communities—where a significant
portion of the population relies on Medicaid
for healthcare access.
It must be remembered that Medicaid
provides essential health coverage for
residents of small towns and rural
communities, playing a significant role in
these areas when compared with
metropolitan regions.
Large reductions in
federal Medicaid funding would put
Americans living in rural communities and
their healthcare systems at serious risk.
The facts are:
It is clear that Americans living in rural areas
have a need for and a right to accessible
quality health and behavioral health
services—equal to that found in urban and
suburban communities. However, it has long
been challenging to (a) recruit and maintain
a qualified health and behavioral health
workforce and (b) ensure accessible primary
healthcare and hospital-based treatment,
given that facilities and providers are located
many miles from those in need of care.
With that in mind, it is understandable why
rural healthcare advocates are perplexed
about why a Republican Congress would
implement Medicaid budget cuts that will
severely exacerbate an already struggling
health care system.
Nursing Homes and Long-Term
Care Facilities
Unless one is personally in need of long-term
health care or is caregiving family member
for a relative who needs such care, most
Americans are not aware of the central and
critical role that Medicaid plays in funding
such facilities in every state in the union. The
truth is that
Medicaid is the primary payer for
long-term care.
In 2020, Kaiser Family Foundation (KFF)
estimated that 4.2 million people used
Medicaid long-term services and supports
(LTSS) delivered in home and community
settings and 1.6 million used LTSS delivered
in institutional settings. LTSS encompass the
broad range of paid and unpaid medical and
personal care services that assist with activities
of daily living (such as eating, bathing, and
dressing) and instrumental activities of daily
living (such as preparing meals, managing
medication, and housekeeping). Services
provided in non-institutional settings are
usually referred to as home- and
community-based services (HCBS) and
include a wide range of services such as
adult daycare, home health, personal care,
transportation, and supported employment. In
2020, Medicaid was the primary payer for
LTSS, covering over
half of all LTSS spending
in the U.S. Also
according to KFF:
- In 2020, there were 5.6 million people
who used Medicaid LTSS, of which 4.0
million (72%) used only HCBS, 1.4
million (24%) used only institutional care,
and 0.2 million used both (4%).
- Medicaid spending per person was
nearly nine times higher for people who
used LTSS than for those who did not use
LTSS ($38,769 vs. $4,480), with
particularly high spending for people
who used institutional LTSS.
- People who used Medicaid LTSS
comprised 6% of Medicaid enrollment
but 37% of federal and state Medicaid
spending, reflecting the
generally high
cost of LTSS
and more extensive health
needs that lead to higher use of other
healthcare services and drugs.
What is worrisome about budget cut impact
on long-term care is that most Americans—
especially younger people—take nursing
homes and other long-term care facilities for
granted. Such facilities pervasively exist in
nearly every community in the United States.
Most do not know how essential Medicaid is
for frail seniors and for the family member
caregivers who serve as the Power of Attorney
for an aging parent. For this reason, long-term
care advocates must fight to convince the
Senate to prevent gaps in availability of this
essential service—especially for low-income
seniors and in rural areas.
Children: Including Immigrant
Populations (Medicaid and SNAP)
While the reconciliation budget reductions for
Medicaid and SNAP impact all segments of
immigrant and migrant communities, the focus
of this section is on how the
cuts in funding
affect immigrant children and families.
To begin with, nearly 45% of America’s
children—a total of 34 million—rely on
Medicaid for health insurance and SNAP for
food.
Nevertheless, leading Republicans in
Congress are advancing budget
reconciliation proposals that would make
history’s largest cuts in both programs. Other
important profile data:
- 44% of all American children benefit
from Medicaid or SNAP, compared with
23% of adults under age 65. Though the
budget reconciliation proposals threaten
children of all races and ethnicities,
Latino families and others from historically
marginalized communities are in
particular danger.
- Two-thirds of the children who participate
in Medicaid or SNAP come from
communities of color, including 1.7
million Latino children; 6.4 million
African American children; 1.4 million
children who are Asian Americans,
Native Hawaiians, or Pacific Islanders;
and 300,000 Native American children.
To reiterate, all residents of the United States
who participate in Medicaid and SNAP are
at risk of losing such assistance should the
Republican reconciliation becomes law and
signed by the President. However, children will
be disproportionately hurt. The reconciliation
budget cuts have significant implications for
children, including immigrant children.
It bears repeating that the House reconciliation
bill proposes reducing federal funding for
states that provide Medicaid or CHIP
coverage to lawfully residing children and
pregnant adults. This could force states to
either end coverage for these groups or face
financial penalties, putting millions of children
at risk of losing healthcare. There are other
losses as well:
- Child Tax Credit Restrictions: The bill
makes the $2,000 child tax credit
permanent but introduces new restrictions
that prevent
mixed-status families—where
one parent lacks a Social Security
number—from claiming the credit. This
change could exclude millions of
immigrant children from receiving
financial support.
- Cuts to Food Assistance Programs: The
budget cuts include reductions to SNAP,
which provides food assistance to
low-income families. With food prices
remaining high, these cuts could worsen
food insecurity among children, including
those in immigrant families.
- Impact on Education and Social Services:
The bill proposes reductions in funding
for education and subsidized housing
programs, which could disproportionately
affect immigrant children and families
who rely on these services for stability
and support.
- Medicaid Work Requirements: The
legislation introduces stricter—and
controversial—
Medicaid work
requirements
, which could lead to
millions losing coverage. Since Medicaid
covers nearly 80 million Americans,
including children, these changes could
result in significant healthcare disruptions.
Overall, these budget cuts could create
financial and healthcare hardships for
many families, particularly immigrant families,
by restricting access to essential services,
limiting access to childhood preventive
health (including immunizations), limiting
access to pediatric primary healthcare and
early treatment intervention for serious
child-related health issues, creating or
increasing risk of serious developmental
delays, and generating increased risk for
early childhood trauma that can result in
emotional and behavioral problems that are
manifested during adolescence.
Medicare May Also Be Facing Cuts
While it does not directly cut Medicare, the
budget reconciliation bill’s increase in the
federal deficit would trigger automatic cuts
under the statutory
rule called Pay-As-You-Go
(PAYGO)
. This arcane rule would result in
approximately $500 billion in reductions
between 2027 and 2034. Clearly, if PAYGO
is triggered, the cuts could reduce services,
lower provider reimbursements, and reduce
benefits for the 68 million elderly and
disabled Americans who rely on Medicare.
The
following communities will be affected:
- Seniors and people with disabilities:
Those relying on Medicaid for long-term
care services may face reduced access or
increased costs.
- Low-income families: Stricter eligibility
requirements could lead to loss of
coverage for millions.
- Healthcare providers: Reduced funding
may strain hospitals and clinics,
particularly in rural areas, potentially
leading to closures or reduced services.
The Medicare Rights Center has raised
additional concerns about Medicare’s
vulnerability when the One Big Beautiful Bill is
enacted. One of their worries has to do with
the bill’s impact on those from the immigrant
community. To quote the Medicare Rights
Center, “The bill would terminate Medicare
coverage for many individuals with lawful
immigration status who have worked and
paid taxes in the US for decades. This is a
significant departure from current,
longstanding policy, which recognizes
eligibility for everyone who has paid
sufficient Social Security and Medicare taxes
on wages to be considered ‘fully insured.’ . .
. Withholding or revoking Medicare eligibility
from legally present older adults and people
with disabilities who have paid in, and
continuing to collect Medicare taxes on their
wages, is deeply unfair and a betrayal of
American values.”
Effects of SNAP Budget Reductions
under Reconciliation
The House reconciliation bill proposes to
dramatically raise costs and reduce food
assistance for many millions of people by
cutting federal funding for SNAP
—by close to
30%. These budget decreases will expand
poverty, food insecurity and hunger, including
among children. Specifics on the effects of the
cuts are as follows:
- The House Republican reconciliation bill
would cut SNAP by nearly $300 billion
through 2034, according to CBO, even
more than required under the House
budget resolution. SNAP provides basic
food assistance for more than 40 million
people, including some 16 million
children, 8 million seniors, and 4 million
non-elderly adults with disabilities, all of
whom would be affected by the cuts in
the bill.
- The deepest cuts to SNAP would come
from cutting federal funding for basic
food benefits by
between 5% and 25%
and then telling states to backfill
for the
federal cut.
To better understand the implications of deep
slashes in the SNAP budget to individual
states, Wisconsin serves as a good example.
The seriousness of the impending cuts was
conveyed by an official analysis of the
problem, which concluded that proposed
federal changes to SNAP will “‘drive
Wisconsinites into hunger’ and harm the
state’s economy.”
This dire reaction was
triggered by the Wisconsin Department of
Health Services’ announcement that the state
would lose $300 million in food assistance
from the federal government under the
“One
Big Beautiful Bill Act.”
As a reminder, House’s
version of the legislation changes SNAP
eligibility and benefits, and cuts $300 billion
over a 10-year period. In Wisconsin, more
than
700,000 people rely on SNAP benefits.
In the end, the reductions in federal support
for Wisconsin’s SNAP will likely require that
the state identify its own funds to close the
shortfall caused by the federal cutback—a
dramatic shift, as SNAP has always been
100% federally funded.
Relatedly, the Center on Budget and Policy
Priorities
recently reported that: “Mandating
that states pay even a small share of SNAP
food benefit costs would hit state budgets
hard at a time when many states are facing
revenue downturns. . . . States are not in a
position to absorb these substantial additional
costs. In fiscal year 2024, tax revenue fell in
40 states after adjusting for inflation, and
many states are projecting budget shortfalls in
the short and long term.”
Opioid Crisis and Other Behavioral
Health Services
Medicaid is the primary source of coverage
for adults with opioid use disorder
(OUD)—covering
nearly half of all adults with
OUD; over
two-thirds of those are receiving
outpatient OUD treatment, and more than half
of adults with OUD are receiving medication
treatment. In fact, in recent years, state
Medicaid
programs have expanded access to
OUD treatment and
medications. Thus, severely
reduced Medicaid funding will result in:
- Reduced access to treatment: Medicaid
expansion has allowed many low-income
individuals to receive opioid addiction
treatment. Cutting funding will lead to
fewer people being able to access
life-saving medications like
buprenorphine and methadone.
- Strain on state budgets: States will
struggle to compensate for lost federal
funding, potentially leading to service
reductions or stricter eligibility
requirements for treatment programs.
- Increased overdose risk: With fewer
treatment options available,
more
individuals will be forced into withdrawal
or relapse, increasing the likelihood of
fatal overdoses.
- Impact on harm reduction programs:
Medicaid funds harm reduction initiatives
such as naloxone distribution and syringe
exchange programs. Budget reductions
will limit the availability of these critical
services.
According to the Centers for Medicare and
Medicaid Services (CMS)
, widespread cuts to
Medicaid enrollments and spending of the
kind that Congress is anticipated to authorize
will undoubtedly hurt people who rely on the
program for OUD treatment. As a result of the
reductions in the Medicaid budget, CBO
projects that Medicaid enrollment will
declines by
10.3 million. Given that so many
people in treatment for OUD are covered by
Medicaid, it is likely they will, at a significant
level, be among those who are projected to
lose coverage. This means that—in becoming
newly uninsured—OUD patients are at high
risk of having their treatment interrupted.
Consequently, they will also become at high
risk for relapse and opioid overdose.
The possibility of major interruption of access
to care is very discouraging. Recent reports
on opioid deaths indicate that, even though
there were
80,000 people who died from
opioid overdoses in 2024
, that number
represents a decrease from the over 100,000
deaths in the previous year. Therefore, while
there continues to be an opioid crisis in the
United States, access to treatment and the
availability of overdose prevention drug such
as Narcan has made inroads in reducing
opioid overdose deaths. Medicaid—being
the largest payer for substance use disorder
treatment in the U.S.—has played an
essential role in the expansion of OUD
treatment services and interventions.
Medicaid has not only covered the cost of
OUD patients having access to Narcan,
provides financial support for millions of
individuals who rely on Medicaid for access
to medication-assisted treatment, counseling,
and harm reduction services.
Impact on Gender and Reproductive
Healthcare
The House reconciliation budget includes
provisions that could significantly impact
gender and reproductive health. The bill
seeks to ban ACA healthcare plans from
covering abortion and gender-affirming care
for all Medicaid patients, including adults.
The reconciliation legislation contains
provisions that
have alarmed healthcare
advocates
since they first appeared in earlier
versions of the bill. Central among those
provisions is a plan to defund Planned
Parenthood. To that point, the proposed cuts
would also
prohibit Medicaid funding for
Planned Parenthood for the next decade.
Those cuts would affect the provision of
services such as Pap smears, cancer
screenings, and birth control. Ironically,
Medicaid already does not fund most
abortions
due to the Hyde Amendment.
However, far-right abortion opponents in
Congress
are pushing to defund Planned
Parenthood regardless of that fact—seemingly
as punishment for the organization’s
perceived strong historic support for abortion
rights. Also related to gender health is that of
LGBTQ+ health disparities. According to the
Human Rights Campaign (HRC), “The bill’s
cuts pose significant threats to critical
programs that disproportionately serve
LGBTQ+ individuals and families, particularly
those who are low-income, living with HIV, or
facing food insecurity. Should the bill be
signed into law, it would be the
largest
transfer
of wealth from poor and working
class Americans to the extremely wealthy in
the nation’s history.”
HRC has outlined the key areas of impact that
the bill will have on the LGBTQ+ community.
Estimates from CBO find that the Republican
reconciliation budget proposals could result in
dropping 13.7 million people from
Medicaid—which is an essential source of
healthcare for LGBTQ+ individuals. The
program covers a disproportionate share of
low-income LGBTQ+ people, including 21%
of transgender individuals and 40% of
people living with HIV.
In addition:
- Medicaid is the largest payer for HIV
care in the U.S., and any cuts would
jeopardize access to essential treatment
for individuals living with HIV,
undermining national efforts to end the
epidemic.
- Many LGBTQ+ community health centers
rely on federal funding through
Medicaid; any reduction would limit
services like mental health support,
gender-affirming care, and sexually
transmitted infection (STI) testing.
- Roughly 22% to 25% of LGBTQ+ adults
in the U.S. live in poverty, compared
with about 16% of nontransgender,
straight adults.
- The bill forbids the use of federal
Medicaid and CHIP funding for medically
necessary healthcare for transgender
people of ALL ages.
- A second provision would prevent states
from offering medically necessary
healthcare to all transgender people
through ACA health plans by excluding
this care from the definition of “essential
health benefits,” regardless of age.
The description and analysis of the impact of
large budget reductions on variety of
Americans who need and receive assistance
from program such as Medicaid and SNAP
help us to understand how reconciliation can
produce highly inequitable outcomes. Before
we move on with other relevant aspects of the
reconciliation process, it is important to
closely review and analyze one particularly
controversial provision in the
legislation—work requirements.
Medicaid Eligibility, Reimbursement
Policies, and Work Requirements
Medicaid eligibility is a joint effort between
the states and CMS, the federal agency that
establishes broad
federal guidelines. Within
those guidelines, each state has the flexibility
to set additional requirements. The process is:
For federal standards, CMS mandates certain
eligibility criteria, such as income thresholds
for specific groups like low-income families,
pregnant people, and people with
disabilities; for state-specific rules, states can
expand eligibility beyond federal minimums,
implement waivers, or create additional
programs to cover more residents. This means
Medicaid eligibility can vary significantly
depending on the state. Core Medicaid
eligibility is primarily based on income level,
household size, and other factors such as
pregnancy or age. However, certain
Medicaid waivers—such as
Section 1115
Waivers
—and programs are specifically
designed for individuals with disabilities or
medical conditions.
Medicaid reimbursements to states can vary
from year to year because federal Medicaid
funding is partly based on the number and
type of health and behavioral health services
provided in a given year. States receive
federal matching funds for Medicaid
expenditures through the
Federal Medical
Assistance Percentage
, which fluctuates
depending on state-specific factors.
As of this writing, work requirements for
Medicaid and SNAP eligibility have emerged
as one of the most critical provisions in the
Republican-led budget reconciliation
package.
Setting work requirements as a
basis for eligibility to receive services form an
entitlement program is not new. Such
requirements were first introduced in 1996
with the passage of the
Personal
Responsibility and Work Opportunity
Reconciliation Act (PRWORA)
. However,
given the political pressures associated with
the current reconciliation budget structure, the
focus on work requirements to reach budget
objectives is seen—by leadership—as a more
acceptable description of their actions.
Given that work requirements are not new,
there have been many opportunities to
evaluate this policy’s effectiveness in
achieving budget reductions as promised. For
example, a 2022
CBO analysis summarized
existing studies (including those of
waiver-based Medicaid work-requirement
experiments) as follows: “Work requirements
in the Supplemental Nutrition Assistance
Program (SNAP) and Medicaid substantially
reduce the number of people receiving
benefits while increasing employment little,
if at all.”
Similarly, longer-term outcome studies of work
requirements for TANF suggest such eligibility
mandates did not change the employment
prospects of beneficiaries: Those who found
jobs tended to work in very low-paying and
irregular jobs. The salient fact is that there is
no evidence that work requirements alone will
actually increase meaningful employment and
reduce the number of idle Americans.
There is recent
evidence that that work
requirements leave people sicker,
less able to
work, and in greater medical debt. Moreover,
even when “exemptions” are applied, work
requirements will inflict disproportionate harm
on individuals with substance use disorder
and mental health conditions. This is because
these populations still face pervasive stigma
and discrimination—along with their health
issues—that increase challenges of securing
and maintaining employment.
The National Conference of State Legislators
(NCSL)
—which is skeptical about the value of
work requirements—offered their “What We
Know About Work Requirements/Community
Engagement Requirements” summary to help
the public understand the essence of work
requirement as an eligibility tool. NCSL’s
summary includes the following points:
- It is unclear who would be subject to the
work requirements, what activities would
qualify as work, or how many hours of
work would be required.
- In modeling released this week, the
Commonwealth Fund estimated that at
least 4.6 million people could lose their
Medicaid coverage in 2026 if work
requirements are imposed, with
reductions in federal funding to states
starting at $33 billion in the first year and
ballooning to at least $362 billion over
10 years.
- Long-term impacts could result in at least
$43 billion in lost economic activity, the
loss of over 300,000 jobs, and a
reduction of over $3 billion in state and
local tax revenue, according to
Commonwealth’s analysis.
- Based on a 2023 work requirement
proposal, the CBO estimated that 1.5
million enrollees would lose eligibility,
resulting in federal savings of $109
billion between 2023 and 2033—but
would “have a negligible effect on
employment status or hours worked by
people who would be subject to the work
requirements.”
- 92% of adults under 65 on Medicaid are
currently working, are not working due to
disability, are attending school, or have
caregiving responsibilities, according to
a KFF
analysis.
In Arkansas, Medicaid work requirements
have been a significant issue since June
2018
, requiring individuals to prove they
had worked at least 80 hours per month.
This requirement has led to confusion and
hardship, with many Arkansans losing
coverage due to the burdensome nature of
these requirements. Recently, the
Arkansas
Department of Human Services has sought a
waiver
for these work requirements,
indicating ongoing discussions about their
impact and potential reforms. Despite some
improvements, the challenges remain, as the
policy has not effectively addressed the needs
of all Medicaid recipients.
Given the nature of Congressional and
executive branch politics and control, it is
highly likely that work requirements will
remain in the final version of the One Big
Beautiful Bill Act, and that will be unfortunate.
There is body of evidence—from a historic
and current points of view—that this policy is
not administratively workable as a condition
for eligibility for Medicaid or SNAP. In
addition,
work requirements have not proven
to be efficacious
in terms of achieving the
stated ill-defined objective of ensuring that all
“able-bodied” applicants and recipients of
Medicaid and SNAP are employed—or
active in other approved work-related activities.
With respect to the effectiveness of work
requirements as a cost reduction tool, there is
evidence that this policy has been successful
in reducing spending—driven by denying
people benefits. The irony is that, even then,
the budget savings are offset by the
substantial costs of administering work
requirements.
To no one’s surprise, the federal
government have sought (and will continue to
seek) to push those administrative expenses to
the states.
The Republican Congressional leadership’s
motive behind mandating work required in
the reconciliation bill is to achieve their
budget aims of identifying cost savings in the
Medicaid and SNAP budgets that will offset
new spending in the form of tax cuts for
billionaires. As stated
in a law review opinion
piece,
“‘work requirements’ are not really
about work: they are a blunt instrument for
slashing program participation to achieve
massive budget cuts to help offset tax breaks
for the very wealthy.”
Conclusion
This asymmetrical reallocation of wealth (from
the poor to the rich)
is seen by economic
justice advocates as being grossly unfair and
equivalent to Congress taking on the persona
of a
“reverse Robinhood.” As frivolous as that
term may seem, it captures the underlying
cynicism of the Trump administration and
Congress reconciliation budget. This bill flips
on its head the notion of a social safety
net—which has, for decades, embodied the
national ethos of caring for the least of us.
For the many organizations, government
officials, and potentially affected individuals
who become aware of the threat that the
Republican reconciliation bill poses for
millions of Americans, the situation can feel
overwhelming. Unfortunately, there is no easy
way to assuage those feelings. Even if the
Senate modifies the House version of the One
Big Beautiful Bill Act, it is nearly certain that
the cuts to Medicaid and SNAP will still be
significant and impactful. Similarly, there is
very little chance that the Senate will reduce
the $3.9 trillion tax break—which is Trump’s
main campaign promise.
This does not mean the many advocates from
social justice, economic justice, and health
equity spaces have no options. It is projected
that, after floor debates and negotiations with
House Republicans, it will take the Senate
until July 2025 to pass the bill. In the
meantime, advocates will have time to
mobilize social actions to directly engage
their members of Congress—especially
Republicans—to petition them to greatly
mitigate the dire consequences of untenable
budget cuts to Medicare and SNAP.
However, the bottom line is that this
reconciliation budget represents a step
backward in prioritizing the interests of
billionaires and millionaires over the
well-being of everyday citizens. Such an
unfair allocation of resources demands strong
opposition to protect the fundamental social
safety net. We must not lose sight of that fact.
Resources
NASW Resources