A sign at the entrance for Mahaska Health, a hospital in Oskaloosa, Iowa, that has received funding from the U.S. Department of Agriculture. (Photo by Cecilia Lynch/USDA). 

WASHINGTON — Americans living in rural communities throughout the country could see their access to health care diminish if Congress changes eligibility for Medicaid or significantly reduces its federal funding.

While rural residents who depend on the state-federal program for lower income people would experience the most substantial impacts, those who have private health insurance or have other coverage, like Medicare, would likely encounter changes as well.

Rural hospitals and primary care physicians’ incomes would likely go down if Medicaid patients are no longer able to afford the same level of health care, potentially leading to reductions in services offered for everyone or even closures, according to experts.

Whitney Zahnd, assistant professor in the Department of Health Management and Policy at the University of Iowa, said that cuts to Medicaid “will disproportionately hit rural communities,” where 24% of people are covered by the program, including 47% of all births and a majority of nursing home patients.

“This is something that’s going to impact them more than those in urban areas and that’s on top of the already lower access to care, higher need for care, older populations,” Zahnd said. “It’s just going to make things that are already a challenge even more challenging for rural communities.”

The Federal Office of Rural Health Policy categorizes about 20.3% of Americans, or 62.8 million people, as living in rural areas, based on 2020 Census data.

Hospital closings in rural America

Rural areas have seen hospitals close their doors at higher rates than facilities in non-rural areas and that trend doesn’t appear likely to reverse any time soon.

The Cecil G. Sheps Center for Health Services Research at University of North Carolina at Chapel Hill has an interactive map showing where 87 rural hospitals have closed completely since 2010, while an additional 65 “no longer provide in-patient services, but continue to provide some health care services.”

And a report from the Center for Healthcare Quality and Payment Reform released in February shows that more “than 700 rural hospitals — one-third of all rural hospitals in the country — are at risk of closing because of the serious financial problems they are experiencing.”

Losing income from Medicaid patients could lead to a “domino effect,” Zahnd said, exacerbating budget challenges for rural health care providers and potentially communities overall.

“Economically in a lot of rural communities, the hospital is the largest employer,” Zahnd said. “So if you have a hospital close, it’s not just that people are losing access to health care, they might be losing their job or their family member may be losing their job.”

Rural health care providers that are able to stay open might have to cut the services they offer to keep their accounts from going too far into the red. Such a decision wouldn’t just harm Medicaid patients, but anyone living in a rural community who goes to that doctor or hospital.  

“So those are some risks we would anticipate if there are these big cuts to Medicaid,” Zahnd said.

Winners and losers

Timothy McBride, co-director of the Center for Health Economics and Policy at the Institute for Public Health at Washington University in St. Louis, Missouri, said during a briefing on Medicaid in mid-March that financial margins for rural hospitals are “razor-thin.”

“Even in the urban hospitals, they’re probably just a few percentage points, but in rural hospitals, they can be just a percentage point or 2 or negative,” McBride said. “So if you take away the Medicaid dollars, they’re certainly going to go negative. And if you wonder why rural hospitals close, that’s why.”

McBride also made the point during a March 13 briefing hosted by SciLine, a service for journalists and scientists based at the American Association for the Advancement of Science, that Medicaid provides funding for a lot of rural health care providers.

“In an economic system, if we cut the spending, we can go, ‘Oh, that’s great. We cut $880 billion.’ But whose income is that? It’s income to hospitals, it’s income to doctors,” McBride said. “And that’s going to, you know, be really hard on rural systems and on rural hospitals and urban systems.

“Yeah, it’s going to help the taxpayers, but, you know, just be mindful of who is going to be hurt. There’s winners and losers here.”

Budget process

Republicans in Congress are planning to use the complicated budget reconciliation process to extend the 2017 tax cuts they enacted during President Donald Trump’s first term to the tune of about $4.5 trillion in new deficits. They also want to boost spending on defense and border security by hundreds of billions of dollars and rewrite energy policy.

In order to pay for some of the package, the House’s budget resolution instructs the committee that oversees Medicaid to cut $880 billion in spending during the next decade — the figure cited by McBride.

Republicans in the Senate haven’t yet agreed to that outline, with several expressing concerns about how steep cuts to federal funding would affect their constituents.

Census data shows that more than 85% of the United States remains rural, meaning every one of the 53 Republican senators represents a state with at least some rural areas.

The Senate in the weeks ahead is expected to debate the budget resolution the House voted along party lines to approve in February. Senators are likely to make changes and send it back across the Capitol for the House to give final approval.

Once the two chambers vote to adopt the same budget resolution with identical reconciliation instructions, Congress can formally begin advancing legislation that could restructure Medicaid. But the GOP will need to stay united throughout the process.

Republicans hold a paper-thin majority in the House of Representatives, requiring that any proposed changes to Medicaid garner the support of centrist and far-right GOP lawmakers.

Even a few defections over Medicaid changes, or other elements in the bill, would stop the package from becoming law.

Avoiding high medical costs, bankruptcy

Joan Alker, executive director of the Georgetown University Center for Children and Families, said that in addition to being “a critical backbone to our healthcare system,” Medicaid helps prevent lower-income Americans from going into medical debt and reduces the number of people landing in emergency departments for conditions that can be managed by primary care providers.

“We spend a lot of time, of course, rightly, thinking about Medicaid and the question of access. But fundamentally, Medicaid is an economic support — a critical piece of the puzzle for families who are struggling to pay bills with the high cost of housing and food,” Alker said. “And so that’s the number one most important thing: If you are uninsured in this country, unless you are a billionaire, you are going to be exposed to high medical costs, and those can lead to debt, and even bankruptcy.”

When people lose access to health insurance or programs like Medicaid, they tend to delay or avoid going to primary care providers, who can diagnose issues early and help patients manage chronic conditions.

“That’s not the way we want our health system to work,” Alker said. “Their condition will have worsened. They won’t have had access to prescription drugs that they needed to address chronic conditions, like asthma or diabetes or hypertension. And so they get worse and show up in the emergency room.”

Medicaid also covers health care for about half of the children in the United States and more than 40% of the births, making the program a significant source of income for both pediatricians and OBGYNs. They would see their budgets decreased if patients lose access to the program.

“There are already challenges, and these kinds of cuts will really exacerbate those for families living in these communities, whether they’re enrolled in Medicaid or not,” Alker said.

Entire community affected

Megan Cole, associate professor in the Department of Health Law, Policy and Management at Boston University School of Public Health, said during the SciLine briefing that if Congress cuts Medicaid, it would have wide-ranging effects on rural health care. 

“I think these cuts will have impacts not just on Medicaid recipients but on whole economies and health systems; so particularly safety net health systems, community health centers, rural hospitals,” Cole said. “As those institutions have less patient revenue. They may face reductions in services. They may close certain sites depending on finances. They may eliminate staff. So that affects not just the Medicaid enrollees, but also affects anyone who is otherwise served by those providers.”

A sign for the Oneida Community Health Center in Hobart, Wis. | Photo by Jason Kerzinski for Wisconsin Examiner

Wisconsin state Sen. Eric Wimberger (R-Oconto) and Rep. Joy Goeben (R-Hobart) heard concerns about potential Medicaid cuts and gambling at a listening session Monday in Oneida, Wis. 

A woman at the session said her son receives Medicaid through the Katie Beckett program, which serves children under 19 who live at home and have certain health care needs. She said that “with the $880 billion that is going to be reduced in the federal budget, it is without a doubt going to impact Medicaid in our state.” 

A budget proposal approved by the House in late February requires lawmakers to cut spending to offset tax breaks, likely requiring Medicaid cuts, KFF Health News reported. The committee that oversees spending on Medicaid and Medicare is instructed to cut $880 billion over the next decade.

The Congressional Budget Office found House Republicans’ budget goals would require cuts to Medicaid, CBS News reported on March 6. 

The woman said she’s wondering what’s happening in the state budget to “plan for these shortcomings that are going to be coming from the federal level.” 

“I don’t know on the federal side, what’s going on there,” Wimberger said. “…I can’t imagine that we’d let any sort of tragedy happen to people who—if there’s a cut of any kind, so we’ll have to adjust to it.”

Medicaid is funded by both federal and state governments. Proposals that would reduce the amount of money paid by the federal government would not require states to pay more to make up the difference, and most states will not likely increase their health care spending, according to an opinion article by the president of the health policy research and news outlet KFF.  

Wimberger is a member of the state Legislature’s Joint Committee on Finance, which is responsible for reviewing state appropriations and revenues. The committee will hold listening sessions on April 2 in Kaukauna, April 4 in West Allis, April 28 in Hayward and April 29 in Wausau.

Oneida Nation requests anti-gambling efforts, grant funding

Brandon Stevens, the vice-chairman of the Oneida Nation in northeast Wisconsin, spoke at the listening session. One topic discussed was online and in-person gambling. 

In Wisconsin, tribes have the exclusive right to operate Class III games, through compacts with the state. Class III includes banking card games, electronic games of chance, including slot machines and, generally, high-stakes, casino-style games. 

Tana Aguirre from the Oneida Nation’s intergovernmental affairs and communications office sent the Examiner a statement that covers a few of the tribe’s budget priorities. 

The Oneida Nation is requesting an increase in funding to help address illegal/unregulated gambling activities, according to Aguirre. The tribe requests compliance and/or enforcement measures “to help deal with illegal gambling machines and practices throughout Wisconsin.” 

“We’re paying a premium for exclusivity through the gaming compact [between the tribe and the state]. It’s basically a violation of the compact if they’re allowed to game at a particular level,” Stevens said. 

Aguirre said the Oneida Nation and other tribes want to see increased funding for a tribal elderly transportation grant program. The grant gives the state’s 11 federally recognized tribes financial assistance for transportation services for tribal elders on and off the reservation. 

The Oneida Nation also wants funding to go toward an intergovernmental training program, Aguirre said. 

The program “is meant to enhance the skill set and understanding between state and tribal officials.” It aims to promote the different governments engaging in “meaningful and productive” consultations and discussions. 

Aguirre said that for the items included in his email, the tribe is requesting that funding come from Oneida Nation gaming revenue that the state of Wisconsin receives.

Tribes submit gaming-related payments to the state. A variety of state programs receive state funding from tribal payments, such as gaming regulation in the Department of Administration and law enforcement in the Department of Justice. Gaming revenue has been put toward tribal family services grants, a tribal law enforcement grant program and other programs. 

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As Congress considers cuts to Medicaid, advocates warn that proposals will hike state costs or reduce services for people with no other resources. (Getty Images)

Of the laundry list of proposed Medicaid cuts circulating on Capitol Hill, policy watchers say some stand out as the most likely to be implemented because they’ve either been tried before, frequently embraced, or both.

Advocates argue that none of the ideas will actually help the program do a better job of its central mission: make it possible for poor and low-income people to get either primary or long-term health care. Instead, they contend, the outcome would be to transfer the costs to states unwilling to cut services or kick people off the rolls who have no other health care resources.

Broad outlines of the proposed Medicaid wish list for Congressional Republicans were outlined in a U.S. House memo that Politico published in mid-January, along with 50 pages of details. The memo is the basis for a summary of those proposed cuts from policy analysts and advocates at the Georgetown University Center for Children and Families.

Among the proposals that have garnered the most attention and concern are:

• Instituting work requirements for Medicaid recipients.
• Capping the current federal contribution to a state’s Medicaid budget, also known as turning Medicaid funds into a state block grant.
• Lowering the federal government’s minimum share of the cost of Medicaid, currently 50%.
• Ending the increased federal government match for states that have adopted Medicaid expansion under the Affordable Care Act (ACA)

Additional proposals would make other changes to how the federal matching rate is calculated or applied and reverse several Biden administration rules that made Medicaid enrollment easier and broadened access to benefits, according to the Georgetown summary.

Medicaid is funded by a combination of federal and state money. Proposals that lower the federal share would require states to pick up a larger share of the cost to avoid reducing coverage.

“The scale of the cuts Congress is contemplating is so large it really will cause fiscal peril for the state,” says Tamara Jackson of the Wisconsin Board for People with Developmental Disabilities.

Medicaid work requirements

The congressional proposals include imposing work requirements for “able-bodied” people as a condition of receiving Medicaid.

The congressional memo specifies that work requirements would not include “pregnant women, primary caregivers of dependents, individuals with disabilities or health-related barriers to employment, and full-time students.” It pegs the savings from a work requirement at $100 billion over 10 years.

According to KFF, a nonpartisan, nonprofit health policy research organization, however, more than two-thirds of Medicaid recipients are working, and those who aren’t would largely fall into the groups the memo says would be exempt.

The first Trump administration approved state Medicaid program waivers that included work requirements, while the Biden administration withdrew its approval. Among them was a requirement in Wisconsin dating from the administration of former Gov. Scott Walker.

The GOP majority in the Wisconsin Legislature passed a bill in 2022 that included a Medicaid work-requirement variation, but it was vetoed by Gov. Tony Evers.

According to KFF, a Congressional Budget Office analysis of a 2023 U.S. House proposal to institute Medicaid work requirements found that while it would save the federal government $109 billion, it would also increase the number of uninsured people by 600,000 without increasing employment. An Arkansas work requirement instituted in 2018 but later found unlawful by a federal court led 18,000 people to lose coverage.

“What we know is, even though people are working or would be technically subject to exemptions, there are very significant administrative burdens on enrollees to prove that or be found ineligible,” says Richelle Andrae, associate director of government relations for the Wisconsin Primary Health Care Association. The organization represents federally qualified health centers that serve low-income patients, including those on BadgerCare Plus and those who are uninsured.

“More time-sensitive paperwork and steps that are hard for people to understand or do and lots of people trying to complete administrative tasks at the same time are a recipe for mistakes, by individuals and government agencies that must do the work,” says Jackson. “That is how policies like work requirements and more frequent eligibility checks save money. Eligible people lose coverage or struggle to get in.”

Block grants

Currently Medicaid pays states at least 50% of all Medicaid costs, with states paying the balance.

In President Donald Trump’s first term, his administration attempted to replace that long-standing guarantee with a block grant — a fixed amount of money per Medicaid beneficiary in the state, regardless of the actual cost.

That per-patient cap on federal funds “would instead radically restructure Medicaid financing,” according to the Georgetown summary.

The cost would be felt across the board, from long-term care in nursing homes or in the community home care to primary health care through BadgerCare Plus, health care providers say, to the detriment of patients.

“Whatever the proposals are that are at the federal level — changing the formula, [per-patient] caps, at the end of the day they they’re all aimed at reducing funding for the Medicaid program, and it really is a vital lifeline for long-term care services and support,” says Lisa Davison, executive director of LeadingAge Wisconsin. The organization represents nursing homes and assisted living providers in the nonprofit, publicly owned and for profit sectors.

Reducing support would send some patients who now have Medicaid coverage back into the pool of uninsured people, says Patricia Sarvela, chief development officer for Partnership Community Health Center, a federally qualified health center in the Fox Valley that serves uninsured people as well as BadgerCare recipients.

Lacking health insurance, people are likely to put off addressing symptoms until their condition worsens enough for them to go to the emergency room, Sarvela says.

Directly or indirectly, taxpayers will likely wind up having to cover the cost of that care, however. “There might be short-term federal savings but ultimately at the end of the day it’s going to cost the taxpayers a lot more because patients will then not have health insurance,” Sarvela says.

Changes to federal match

Several proposed changes relate to the amount of the federal Medicaid match or how it’s calculated.

A proposal published by the Paragon Institute in July 2024 calls for reducing the federal match below 50% of the costs. The Paragon Institute has close ties to the Heritage Foundation, which produced Project 2025, the 900-page document that, although disavowed by Trump last year, has been echoed in numerous actions since he took office.

In 10 states the federal match is at the minimum and would likely be lowered, the Georgetown summary says, adding: “These states would likely have to make deep cuts to their Medicaid programs in response.”

The states are California, Colorado, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Washington and Wyoming.

Other states receive a higher federal match; Wisconsin gets 60% of its costs covered. It’s not clear whether those states’ matches would also be reduced under the proposal or other Medicaid reduction proposals.

Medicaid expansion

Another likely cut would be to reduce the additional federal match for Medicaid recipients whose incomes are between 100% and 138% of the federal poverty line.

The additional match was included in the Affordable Care Act, enacted in 2010. Originally Medicaid expansion was mandatory under the act, but a subsequent U.S. Supreme Court ruling that upheld the ACA made Medicaid expansion voluntary.

States that have accepted the expansion got a 90% federal match for the added beneficiaries. The Congressional memo proposes ending the higher match, and some states that have expanded are already considering ending expansion if that happens.

Wisconsin never accepted Medicaid expansion, however, so that change would not directly affect the state. Although Evers first ran in 2018 on a vow to accept Medicaid expansion after Walker rejected it, he’s been blocked from doing so by the GOP majority in the Legislature.

As he has with every budget he’s proposed since taking office, Evers has included accepting Medicaid expansion in his 2025-27 budget proposal.

In an interview with the Wisconsin Examiner last month after a visit with constituents in Port Washington to promote his budget, Evers said he didn’t consider leaving out Medicaid expansion, despite predictions that it would be pulled back by Republicans.

“First of all, we don’t know if it’s going to go away,” Evers said. Under the current 90% match, he said, Wisconsin would get about $2 billion in additional federal money every two years and the additional people covered in the state “would get better health insurance, so it’s a win-win-win.”

Evers acknowledged that in the current Congress, there’s a risk for sharp reductions in Medicaid.

If that happens, “it would be disastrous,” Evers said. “We have lots of people on Medicaid in the state of Wisconsin.”

Among states, Wisconsin’s Medicaid profile is “pretty average,” he added.

“There are places in the country where Medicaid is a huge, huge player, and if they would get rid of Medicaid, our health care system would implode. There’s just no question about that. That’s the thing that concerns me.”

This story is Part Three in a series.

Read Part One: Wisconsin patients, families are wary as Congress prepares for Medicaid surgery

Read Part Two: How Medicaid fuels an economic engine for caregivers, family members and patients

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Patients have their blood pressure checked and other vitals taken at a mobile dental and medical clinic in Grundy, Va. Republicans in Congress are considering making major cuts to Medicaid. (Spencer Platt/Getty Images)

Depending on how states respond, a Republican proposal circulating on Capitol Hill that would slash the 90% federal contribution to states’ expanded Medicaid programs would end coverage for as many as 20 million people — or cost states $626 billion over the next decade to keep them on the rolls, according to a new analysis.

The Trump administration and Republicans in Congress are eyeing reductions in federal spending, largely to pay for extending tax cuts enacted during Trump’s first term in office. Medicaid, the joint federal-state health care program for low-income people and people with disabilities, covers 1 in 5 people living in the U.S. and accounts for nearly $1 out of every $5 spent on health care.

Under the ACA, states have the option to expand their Medicaid programs to cover adults with low incomes up to 138% of the federal poverty level ($21,597 for an individual in 2025), instead of just limiting coverage to children, parents of young children and people with disabilities. The built-in incentive to expand was that the federal government’s promise to pay 90% of the cost of expansion from 2020 and beyond, meaning states just had to pay the remaining 10%.

Forty states plus the District of Columbia have opted to expand. The holdouts are Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming.

Research released this week by the health policy research group KFF finds that two major scenarios could happen — both of which might diminish patients’ access to health care coverage.

The first possibility is that expansion states would use their own money to make up for lost federal dollars. That would cost them about $626 billion over 10 years, an overall spending increase of 17%. To shoulder the heavier burden, states likely would have to scale back Medicaid coverage for some groups, eliminate optional benefits or reduce provider payment rates. Alternatively, they could raise taxes or make cuts in other large budget items, such as education.

A second potential outcome is that states that have adopted Medicaid expansion would reverse it. Nine states (Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah and Virginia) already have “trigger” laws in place that would automatically rescind expansion if the federal match rate dips below 90%. Other states are considering similar legislation.

If all the states (plus D.C.) that have expanded Medicaid under the ACA reverse it, 20 million people, or nearly a quarter of all Medicaid enrollees, would lose coverage, according to KFF. Among expansion states, overall Medicaid spending would decline by 6%.

States that have not expanded Medicaid would not be affected under either scenario.

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Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

A sign in Madison, Wisconsin touting a municipal well project funding by President Biden's bipartisan infrastructure law. | Photo by Ruth Conniff/Wisconsin Examiner

In the last days of the Biden administration, just before Trump’s triumphant return and swearing-in on the site of the violent Jan. 6 Capitol insurrection, I happened across a sign touting federal investment in an infrastructure project on Madison’s east side. 

Next to a strip mall, set back from the road and barely visible from busy East Washington Avenue, the sign touted PFAS treatment and upgrades to a municipal well. In large type it declared: “Project Funded by President Joe Biden’s Bipartisan Infrastructure Law.”

Too little, too late, I thought. The sign, practically hidden on a scruffy corner where few eyes can see it, seemed like a metaphor for the Biden administration’s failed effort to take credit for all the good it did. Through federal investments it paved roads, repaired bridges, shored up the economy and set us on a path to recovery from a global pandemic. By the end of 2024, wages, job growth, employment, even consumer prices that had spiked worldwide after COVID hit, apparently driving voters in this country to elect Trump, are all in good shape. In the third quarter, real GDP hit its highest level of 2024 at 3.1%. Consumer spending was up. Unemployment was 4% nationally and 2.9% in Wisconsin. And everywhere across Wisconsin, federal investments have boosted the economy and improved lives.

As Erik Gunn reports, the Biden administration touted  $9.2 billion in federal infrastructure investments in our state, including $1 billion for desperately needed repairs to the Blatnik Bridge connecting Superior to Duluth, Minnesota. There were also hundreds of smaller projects like PFAS remediation in that municipal well on Madison’s east side, which was shut down in 2019 and will be operational again by the summer. 

Because of the Biden administration’s efforts, about 300,000 Wisconsin Medicare recipients are saving an average of $475 per year in prescription drug costs, which were capped under the Inflation Reduction Act. And the Department of Education projects that 62,000 Wisconsinites have had over $2.4 billion in student debt canceled thanks to Biden’s student debt relief efforts.

These are just a few of the highlights in a long list of Biden administration accomplishments put out by the Democratic National Committee as the former president bade farewell. 

Wisconsin lost 83,500 jobs during Trump’s first term. During Biden’s four years in office, it added 186,800 jobs, as we bounced back from the pandemic. Federal pandemic relief funds allowed Wisconsin Gov. Tony Evers to shore up schools, infrastructure, child care and health care in our state, even as Republican legislative leaders tenaciously blocked every effort to use the state’s historic multibillion-dollar surplus to fund any of those priorities. 

Now Biden is gone and Trump’s MAGA Republican party has taken over every branch of the federal government. Here in Wisconsin, as across the country, MAGA loyalists are repeating Trump’s counterfactual talking points about how terrible Biden was for the economy and how government must be cut back in order to unleash a new era of American prosperity.

The battle between those who want to harness the power of government to help people and those who would rather drown it in the bathtub has been going on for decades. But the contrast between those ideologies has grown sharper. It’s more important now than ever to recognize what’s at stake.

At the start of the new legislative session, Wisconsin Republicans pledged to ignore Evers’ budget requests and focus exclusively on giving away the state surplus in the form of tax cuts.

“The money that we set aside for that tax cut will not be spent by this Legislature on other wants,” Assembly Speaker Robin Vos declared, “no matter how many special interests or tax-and-spend politicians apply pressure to get it out of the treasury’s hands.” 

“More than $4 billion of taxpayer money is sitting in a bank account here in Madison, while rising prices impact the families who sent us here to serve them,” Senate Majority Leader Devin LeMahieu concurred. “[Evers] wants to use that money to grow the size of government and send Wisconsin backwards.” 

Even a state effort to curb school shootings, through Evers’ office of violence prevention, which he announced after the Abundant Life school shooting in Madison, came in for scathing cynicism from Republican legislative leaders. 

“It takes a bureaucrat to think that another government agency is actually going to be effective,” Vos spat, summing up the effort as “a whole bunch of touchy-feely bureaucrats that are going to go around wasting time, wasting money.”

At the federal level, Republicans are singing the same discordant tune.

Scott Bessent, the hedge fund manager Trump nominated to lead the U.S Treasury Department, said during his confirmation hearing that extending Trump’s 2017 tax cut which disproportionately benefited the very wealthy is “the single most important economic issue of the day.”

“If we do not renew and extend, then we will be facing an economic calamity,” Bessent said. When Georgia Democratic Sen. Raphael Warnock pressed Bessent on whether people who make more than $10 million per year really need a tax cut, Bessent replied, “There is no income level that I don’t think we should continue the [tax cut] as it was.” On the flip side, he endorsed deep cuts to federal spending that benefits less fortunate Americans. “We do not have a revenue problem in the United States of America; we have a spending problem,” Bessent said. 

The real economic calamity is shaping up as the incoming Trump administration eyes deep cuts to Medicaid and other cuts that will fall most heavily on poor families. For good measure, Bessent also said he opposes raising the federal minimum wage above $7.25 an hour.

Ever since Ronald Reagan championed trickle-down economics in the 1980s, Republicans have promised that cutting taxes on the wealthy and reducing the size of government will benefit most Americans. But it hasn’t worked out that way. “Cutting taxes for the rich over the past 40-plus years has had a huge impact, leaving less money for public programs that benefit millions of Americans while enriching a tiny percentage of the population,” the Center for Public Integrity reports. Income inequality skyrocketed: “As more money flowed upward, the gap in accumulated wealth widened,” the Center reports. “In 2019, the top 10% of Americans had three times the wealth of everyone else in the country combined.”

It comes down to this: Do you believe it’s better for rich people to get tax cuts and for all of us to pay more to meet basic needs — getting only the health care, education, infrastructure – even firefighting — we can afford to pay for out of pocket? Or do you think we can, as a society, create a world where there is a baseline level of wellbeing, decent education, food, shelter and security for all? 

Republicans have been arguing for a long time that government is broken, should be “drowned in the bathtub” — that no one should be required to chip in to support things like public schools or provide decent housing and health care and education to all, including children born into families that can’t afford all these things on their own.

Now we face an aggressive push by the incoming Trump administration and the Wisconsin Leislature’s majority to destroy programs that benefit poor kids, poor families and society as a whole

After years and years of underfunding Wisconsin’s public schools and our once-great university system, Republican  legislators now say there’s no point throwing good money after bad, using the struggles of an underfunded system as an excuse for further cuts.

If we can’t remember what it’s like to have a functional society, it’s easy to become cynical and give up on the idea of a healthy public sphere. 

Now, as we enter the era of Trump 2.0, it’s important to remember what we had, what we lost, and what we need to fight like hell to hang on to.

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U.S. President-elect Donald Trump speaks at a news conference at Trump's Mar-a-Lago resort on Dec. 16, 2024 in Palm Beach, Florida. (Photo by Andrew Harnik/Getty Images)

Under President Joe Biden, enrollment in Medicaid hit a record high and the uninsured rate reached a record low.

Donald Trump’s return to the White House — along with a GOP-controlled Senate and House of Representatives — is expected to change that.

Republicans in Washington say they plan to use funding cuts and regulatory changes to dramatically shrink Medicaid, the nearly $900-billion-a-year government health insurance program that, along with the related Children’s Health Insurance Program, serves about 79 million mostly low-income or disabled Americans.

The proposals include rolling back the Affordable Care Act’s expansion of Medicaid, which over the last 11 years added about 20 million low-income adults to its rolls. Trump has said he wants to drastically cut government spending, which may be necessary for Republicans to extend 2017 tax cuts that expire at the end of this year.

Trump made little mention of Medicaid during the 2024 campaign. The first Trump administration approved work requirements in several states, though only Arkansas implemented theirs before a federal judge said it violated the law. The first Trump administration also sought to block-grant funding to states.

House Budget Committee Chair Jodey Arrington (R-Texas) told KFF Health News that Medicaid and other federal entitlement programs need major changes to help cut the federal debt. “Without them, we will watch this country sadly enter into fiscal collapse.”

Rep. Chip Roy (R-Texas), a member of the Budget Committee, said Congress needs to explore cutting federal spending on Medicaid.

“You need wholesale reform on the health care front, which can include undoing a lot of the damage being done by the ACA and Obamacare,” Roy said. “Frankly, we could end up providing better service if we do it the right way.”

Advocates for poor people fear GOP funding cuts will leave more Americans without insurance, making it harder for them to get care.

“Medicaid is an obvious target for huge cuts,” said Joan Alker, executive director of Georgetown University’s Center for Children and Families. “An existential fight about Medicaid’s future likely lies ahead.”

Medicaid, which turns 60 in July, is nearing the end of a disruptive period, after covid pandemic-era coverage protections expired in 2023 and all enrollees had to prove they still qualified. More than 25 million people lost coverage over the 18 months after the “unwinding” began, though it has not notably increased the number of people without insurance, according to the latest census data.

The unwinding’s disruptions could pale in comparison to what happens in the next four years, said Matt Salo, former executive director and founder of the National Association of Medicaid Directors. “What we are going to see is an even bigger seismic shift in who Medicaid covers and how it operates,” he said.

But Salo said any efforts to shrink the program will face pushback.

“A lot of powerful entities — state governments, managed-care organizations, long-term care providers, and everyone under the sun who wants to do well by doing good — wants to see Medicaid work efficiently and be adequately funded,” he said. “And they will be highly motivated to push back on something they see as draconian cuts, because it could affect their business model.”

The GOP is looking at several tactics to reduce the size of Medicaid:

• Shifting to block grants. Switching to annual block grants could lower federal funding for states to operate the program while giving states more discretion over how to spend the money. Currently, the government matches a certain percentage of state spending each year with no cap. Republican presidents since Ronald Reagan have sought to block-grant Medicaid with no success. Arrington said he favors ending the open-ended federal funding to states and replacing it with a set annual amount based on how many people each state has in the program.
• Cutting ACA Medicaid funding. The ACA provided financing to cover, through Medicaid, Americans with incomes up to 138% of the federal poverty level, or $20,783 for an individual last year. The federal government pays 90% of the cost for adults covered through the law’s Medicaid expansion, which 40 states and Washington, D.C., have adopted. The GOP may try to lower that funding to the same match rate the feds pay states for everyone else in the program, which averages about 60%. “We should absolutely note that we are subsidizing the healthy, able-bodied Medicaid expansion population at a higher rate than we do the poorest and sickest among us, which was the original intent of the program,” Arrington said. “That’s not right.”
• Lowering federal matching funds. Since Medicaid began, the federal match rate has been based on the relative wealth of a state’s population, with poorer states receiving a higher rate and no state receiving less than a 50% match. Ten states get the base rate — all but two are Democratic-run states, including New York and California. The GOP may seek to cut the base rate to 40% or less.
• Adding work requirements. During the first Trump term, federal courts ruled that Medicaid law doesn’t allow coverage to be conditioned on enrollees’ working or seeking jobs. But the GOP may try again. “If we can get strict work requirements on able-bodied adults, that can be a huge cost savings by itself,” Rep. Tom McClintock (R-Calif.) told KFF Health News. Because most Medicaid enrollees already work, go to school, or serve as caregivers, critics say such a requirement would simply add red tape to obtaining coverage, with little impact on employment.
• Placing enrollment hurdles. About 10 states offer some populations what’s called continuous eligibility, whereby people stay enrolled for years without having to renew their coverage. That policy’s been shown to prevent enrollees from falling out of the program for short periods because of hardships or paperwork problems, which can lead to surprise medical bills and debt. The Trump administration could seek to repeal waivers that allow states to grant multiyear continuous eligibility, which would require people in those states to reapply for coverage annually.

If the GOP’s plans to shrink Medicaid are realized, Democrats and health experts say, low-income people forced to buy private insurance would face challenges paying monthly premiums and the large copayments and deductibles common to commercial plans that typically don’t exist in Medicaid.

The Paragon Health Institute, a leading conservative think tank run by former Trump adviser Brian Blase, has issued reports saying the billions in extra money states took to expand Medicaid under the ACA has been a boon to private insurers that manage the program and relatively wealthier people it says shouldn’t be enrolled.

Josh Archambault, a senior fellow with the conservative Cicero Institute, said he hopes the Trump administration holds states accountable for overpaying providers and enrolling people in Medicaid who are not eligible. Conservatives have cited CMS reports saying states improperly pay Medicaid providers billions of dollars a year, though the federal government notes that is mostly due to lack of documentation.

He said the GOP will look to scale back Medicaid to its “traditional” populations of children, pregnant women, and people with disabilities. “We need to rebalance the program that most people think is underperforming,” he said. Most Americans, including large majorities of both Republicans and Democrats, view the program favorably, according to polls.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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This article first appeared on KFF Health News and is republished here under a Creative Commons license.

The NorthLakes Community Clinic health center in Washburn is one of a group of community health centers across northern Wisconsin. A new report finds that rural residents are at least as likely to rely on Medicaid for health coverage as people in other communities. (Photo courtesy of NorthLakes Community Clinic)

Residents of rural areas and small towns are more likely to rely on Medicaid for health coverage than city dwellers, a new report issued Wednesday finds.

Authors of the report said the findings highlight the potential harm that could particularly affect rural residents if Congress imposes drastic cuts to Medicaid as is reportedly being considered.

The analysis was released by the Georgetown University Center for Children and Families less than a week after a published report that U.S. House Republicans are contemplating cutting Medicaid by up to $2.3 trillion as part of their plan to renew tax cuts enacted in the first Trump administration.

“That equates to almost one-third of federal Medicaid spending,” said Joan Alker, executive director of the center and a research professor at Georgetown’s McCourt School of Public Policy, during an online press briefing Wednesday. “Rural communities are at grave risk if substantial Federal cuts are enacted.”

Medicaid provides health care coverage for about 80 million low-income Americans. Closely related, the Children’s Health Insurance Program (CHIP) extends coverage for children in families with incomes too high to qualify for Medicaid but too low to afford private health insurance coverage. Both programs are funded jointly by states and the federal government and are managed by states under federal rules.

 “Medicaid is the backbone of many aspects of our health care system, including paying for the majority of nursing home residents, covering 40 to 50% of children and births nationwide, depending on where you live, covering people with disabilities and many other low income people,” Alker said.

Medicaid’s rural footprint

The report looks at 2023 federal census data to estimate the share of urban as well as rural and small town residents covered by Medicaid and CHIP. The data source, the American Community Survey, is useful for comparisons among states but may undercount Medicaid enrollment, Alker said, making the report’s estimates conservative.

In 40 out of 48 states, the report finds, Medicaid enrollment in rural counties was similar to or higher than in urban counties. (The report defines a rural county as one with no urban communities of 50,000 people or more. New Jersey, Rhode Island and the District of Columbia have no designated rural counties.)

Medicaid and CHIP covered more than half of all children living in rural areas and small towns in six states: New Mexico, Louisiana, Arizona, Florida, South Carolina and Arkansas.

Ten states had the largest difference between rural and urban children in the programs. Arizona headed that list, with 55.9% of rural or small town children enrolled in Medicaid or CHIP compared with 34.9% of children in metro areas.

Among all states, Texas had the largest number of children — 239,100 — enrolled in Medicaid or CHIP, followed by North Carolina, with 237,800; Georgia, with 205,200; and Kentucky, with 199,200.

Higher rural Medicaid enrollment also showed up among adults. In 15 states at least 20% of rural or small-town adults ages 18 to 65 were covered by Medicaid. Arizona again headed the list, with 35.9% of rural non-elderly adults enrolled in the program compared with 16.8% of urban adults.

“Medicaid is protecting families and people from exposure to high medical costs, and Medicaid is very good at that,” Alker said. “Cuts to Medicaid, which is already a very lean payor in our health care system, will result in transferring costs, shifting costs to families and providers cutting services and in rural communities,” Alker said.

Wisconsin patterns

Overall, Medicaid coverage is highest in urban Milwaukee County (27.4%) and rural Menominee County (29.9%). On average, Medicaid covers about 15% of Wisconsin adults under 65, rural and urban alike, and Medicaid or CHIP cover about one-third of children on average, whether they live in urban or rural communities.

In 27 rural counties across northern and central Wisconsin, however, the share of children on Medicaid is higher than the state average.

“Nearly 1.5 million Wisconsin residents live in rural areas and small towns, and Medicaid plays a critical role in ensuring access to health care for these communities,” said William Parke-Sutherland of Kids Forward. “Congress is considering enormous funding cuts to Medicaid in the year ahead, and this new report confirms how disastrous this would be for our rural communities and small towns.”

Rural patients and providers alike count on Medicaid to support the health care infrastructure and provide health care services, providing preventive care, dental care and behavioral health services, according to Ana Tochterman, CEO of NorthLakes Community Clinic, a federally supported health clinic with facilities across northern Wisconsin.

“Medicaid is an absolutely essential program that provides insurance for the majority of patients served at our rural Community Health Center,” Tochterman said. “Rural patients face unique challenges like transportation barriers and limited access to resources found in larger communities, and Medicaid is an important tool that enables rural patients to thrive.”

Rural health and resources

The report identifies several health care challenges for rural areas. Those include a greater scarcity of providers, limited internet connectivity and longer distances between people and their health care providers, exacerbated by a lack of public transportation.

Medicaid cuts could threaten already-shrinking rural health care networks, the report warns. “Health care systems are already under enormous pressure and can ill afford any loss of resources,” Alker said.

Care for mothers and newborns is especially likely to suffer, said Katy B. Kozhimannil, a health policy researcher at the University of Minnesota who has studied hospital and delivery room closures.

In 2010, more than 43% of rural hospitals and almost 30% of urban hospitals didn’t offer obstetric care, she said. By 2022, that was true of more than 52% of rural hospitals and more than 35% of urban hospitals.

“More than a decade into a maternal health crisis in the United States, fewer U.S. hospitals provide obstetrics every year, with rural hospitals experiencing the greatest losses,” Kozhimannil said.

The high cost of specialized facilities and staff to deliver babies have to be covered by revenues that vary depending on how many children are born each year and how much the hospital gets paid for each birth, she explained. Those factors put a bigger burden on smaller hospitals and on hospitals with more Medicaid patients, because Medicaid usually pays less than private health insurance.

Beside care at and before birth, she added, Medicaid can make it possible for families to get health care for children growing up with special health needs, mental health care or substance abuse treatment for teens, or long-term care for the elderly.

“These are all areas of deep need in our rural communities that are disproportionately financed through Medicaid programs,” Kozhimannil said.

‘A crucial backstop’

Hutchinson Regional Medical Center in central Kansas serves a population of about 100,000 people, but its service area extends into Western Kansas. 

“Our health system, which cares for that region, is sustained largely, or in part, by Medicaid,” Benjamin Anderson, the medical center’s CEO, said during the Georgetown press briefing.

He mentioned a baby born earlier this week at the hospital whose mother never had access to prenatal care. The infant will now spend months in the facility’s neonatal intensive care unit, incurring health care expenses likely to top $1 million.

“Much of that would have been preventable with adequate prenatal care,” Anderson said.

Maternal and child health is a major part of the facility’s mission, “but older adults, too, are also cared for by moms and they are also particularly vulnerable,” he added. “Cuts to Medicaid mean fewer providers, and just speaking very plainly, fewer providers are able to sustain receiving patients that have Medicaid. Fewer poor people will be able to access care at a health system like ours that takes all payers — and those who can’t pay — and is currently operating at break even.”

The COVID-19 pandemic put health care systems into a metaphorical intensive care unit and “we’re still recovering,” Anderson said — striving to address needs ranging from maternity care to seniors who need long-term care, perhaps at home in the face of nursing home bed shortages.

“Medicaid is a crucial backstop for that to happen, and it’s so important that we sustain it, that we prop it up,” Anderson said. “We have an opportunity to rebuild a system right now, and there are many in this country that are doing that following the pandemic. And significant cuts, as are identified in this report, would cripple those efforts to recover.”

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