New Analysis Highlights Potential Impact of Proposed Medicaid Spending Reductions

A recent white paper from The Century Foundation examines the potential impact of significant federal Medicaid spending reductions, which have been suggested as part of broader budget discussions tied to funding tax cuts and reducing federal expenditures. The analysis provides a detailed look at three hypothetical budget reduction targets—$100 billion, $250 billion, and $500 billion over ten years—and their implications for Medicaid, a vital program serving millions of low-income Americans, including individuals with disabilities, children, and older adults.

The white paper warns that the budget process currently being discussed, which prioritizes setting overall spending targets before detailing specific policy changes, could make it difficult for lawmakers and the public to fully grasp the magnitude of proposed cuts. Described as a “numbers first” approach, this process could see Congress voting on broad Medicaid reduction goals without specifying how those reductions would be achieved, complicating efforts to assess their real-world impacts.

To contextualize the proposed cuts, The Century Foundation translates these targets into meaningful metrics on the impact on Home and Community-Based Services (HCBS). A $100 billion reduction over ten years would equate to a 9% cut in annual federal Medicaid spending for HCBS, while a $250 billion reduction would represent a 23% cut for HCBS. A $500 billion reduction—among the more extreme scenarios—would result in a 45% cut in annual spending for HCBS. Such cuts could require fundamentally altering the program.

The report emphasizes that Medicaid cuts of this magnitude would not only affect federal spending but also impose additional fiscal pressures on states, which share the cost of the program with the federal government. States would face difficult choices about whether to fill funding gaps, reduce services, or limit access to the program. Health care providers, particularly those serving Medicaid populations, could also face financial strain, potentially reducing access to care for people with disabilities.

While these scenarios are speculative and based on floated proposals, the report underscores the importance of understanding the human and financial implications of such cuts. The analysis aims to provide lawmakers, state officials, health care providers, and the public with tools to evaluate the potential impact of proposed reductions, ensuring informed decision-making during the upcoming fiscal year 2026 budget process.

President Trump Kicks Off Term with Flurry of Executive Actions

Since returning to office, President Donald Trump has issued an unprecedented number of executive orders, marking a decisive start to his administration. Within his first week, he signed nearly five dozen executive actions, outpacing his initial term in 2017, when he issued only six in his first week. These actions signal a clear shift in federal priorities and a swift dismantling of key policies from the Biden administration.

Trump’s early executive orders have targeted a wide range of issues, from halting diversity, equity, and inclusion initiatives to reversing environmental and infrastructure policies.