Proposed $700 Billion in Medicaid Cuts Will Gut American Safety Nets and Shatter State Budgets

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House Republicans are pushing a legislative package that would cut nearly $1 trillion from Medicaid and food stamps, two of the largest federal safety net programs. The proposal includes $700 billion in Medicaid cuts over ten years, with sweeping eligibility changes and work requirements that could strip more than 10 million people of coverage. Experts warn the effects would ripple across hospitals, state budgets, and the broader economy.

The legislation marks a historic reversal of federal health policy. Medicaid, which currently covers over 71 million Americans, would face its largest funding rollback in decades. States would have to absorb much of the cost shift, leading to potential cuts in enrollment, benefits, and provider reimbursements. Many could also reallocate funds away from education and infrastructure or raise taxes to stay afloat.

Who Gets Hit First

The Congressional Budget Office estimates that by 2034, an additional 7.6 million Americans would be uninsured because of the Medicaid provisions. While the GOP says the work requirement targets able-bodied adults, the reality is broader. Many recipients at risk include children, seniors, people with disabilities, and low-income workers who may fail to meet new documentation rules.

Under the plan, adults aged 19 to 64 must work at least 80 hours a month or engage in qualified activities to keep coverage. Exemptions exist for pregnant women, medically frail individuals, and caregivers, but experts say administrative hurdles will still knock eligible people off the rolls. The impact could be most severe in states with limited infrastructure to process exemptions.

Hospitals and nursing homes—especially those in rural or low-income areas—would also take a hit. States often use provider taxes to fund Medicaid, but the bill limits that tool. With fewer insured patients and lower reimbursement, many facilities may cut services, raise rates for others, or shut down entirely.

Food Stamp Rollbacks Add to the Blow

The legislation also expands work requirements for food stamp recipients and shifts more program costs to the states. Currently, adults without children must work 20 hours a week to qualify. The GOP plan would apply that rule to adults up to age 64, and to parents of school-age children. States would also lose flexibility in waiving work rules during downturns.

For the first time, states would have to cover at least 5 percent of food stamp benefit costs, with higher shares required if error rates rise. They would also shoulder 75 percent of administrative expenses. Analysts estimate the changes could put food access at risk for 11 million people, including 4 million children.

Some states may respond by capping enrollment or reducing benefits. Others could choose to exit the program altogether, since participation is technically optional. The National Grocers Association warned that the economic impact could be severe. Food stamps support 388 000 jobs, generate $20 billion in wages, and deliver $4.5 billion in tax revenue.

A Policy Shift With No Precedent

Health policy experts say the combined scope of the Medicaid and food stamp cuts is without modern precedent. “We’ve never seen coverage reductions of this scale,” said Alice Burns of KFF. “These programs have only expanded over the past fifty years. Rolling them back this aggressively is uncharted territory.”

The bill also delays a Biden-era rule meant to streamline Medicaid enrollment. That postponement alone could cost 2.3 million people their coverage. Many of them are seniors, children, and people with disabilities who depend on continued access to services and prescription assistance.

What happens next remains uncertain. Conservative and moderate Republicans are still debating amendments, and further changes are expected in the Senate. But even in its current form, the bill sets a clear direction: one that shrinks federal safety nets, increases state burdens, and reshapes how millions of Americans access health care and food.

Do you believe Congress should move forward with the proposed Medicaid cuts, or is the plan too costly for families and states to bear? Tell us what you think.

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