As Congress explores ways to decrease the federal debt, Medicaid is a focus. Last week, the Republican-led House established a budget framework that allows both chambers of Congress to collaborate on a large budget package that they anticipate to pass without Democratic support.
Some House Republicans have proposed cuts to Medicaid funding. Cuts to the program may disproportionately affect family caregivers and those needing long-term care. Medicaid is the nation’s health insurance program for low-income people, funded equally by the federal and state governments. Medicaid covers 20% of all Americans. Medicaid cost taxpayers $870 billion in 2023.
But it is also the single largest source of funding for long-term care for disabled and elderly people. It accounts for more than 50% of the $415 billion spent on these services each year. Medicare doesn’t cover long-term care.
Medicaid will cover the costs of long-term or permanent nursing home care for people who have low incomes and limited assets other than their homes. It covers 60% of the nation’s long-term nursing home stays, which include over 1 million people.
Medicaid also provides funding for home and community-based services. Home and community-based services include physical, occupational, and speech therapies, durable medical equipment, home healthcare, home-delivered meals, and dietary management. These services are intended to help people live in their community rather than living in a nursing home or other institutional setting.
In most cases, home and community-based services are less expensive than institutional care. The Center for Medicare and Medicaid Services estimates that home and community-based services cost 50% less than institutional care. In 2020, KFF found that the average annual cost per person for home and community-based services averaged slightly more than $36,000, whereas institutional costs averaged more than $47,000.
Caregiving also falls under the umbrella of home and community-based services. Often, Medicaid pays caregivers, including friends, and family members, who assist with activities of daily living. These activities can include eating, drinking, bathing, and toileting.
Reducing people’s Medicaid benefits “would have profound effects on their health,” according to Harvard Medical School’s health economist David Grabowski. “These are services they need every day to bathe themselves, dress themselves, get themselves to the kitchen.” He adds that cuts could result in hospitalizations, ER visits, and, in some circumstances, early death.
Sharon Duchessi, a Sacramento California resident takes care of her partner, who has diabetes and a back injury. She says the two could not survive without Medicaid. She gets paid to provide care through Medicaid.
Both of them also rely on it for medical treatment. Even so, they’re stretched. Duchessi was well compensated as a loan processor. She now makes $18.65 per hour, up to a monthly maximum of 189 hours. She predicts that her partner’s care takes at least 250 hours each month. For example, the program pays her for 30 minutes of laundry every week. However, because he is prone to serious skin infections, she has to scrub the washing machine and dryer every time she does his laundry.
Earlier this year, the House of Representatives sponsored a budget resolution that would essentially cut Medicaid funding by up to $880 billion over the next decade. The resolution which was approved last week still maintains this mandate. However, the Senate and House will have to discuss what is finally included in the budget.
President Trump and House Speaker Mike Johnson pledge to combat fraud and abuse. However, the federal government’s investigations reveal that only around 5% of Medicaid payments are “improper,” which includes both fraud and paperwork errors, and that outright fraud amounts to just about $6.5 billion each year. The remaining savings would have to come from lowering enrollment, cutting services, or paying providers less.
To make up for the shortfall, states may consider raising taxes. However, most people believe that states would reduce payments, adjust eligibility requirements, or cut back on services, leaving unpaid family caregivers to take up the slack, according to Grabowski. “It’ll put a huge burden on the family,” he says. “Even though there might be savings from a budgetary perspective, families bear this cost.” According to Michael F. Cannon, director of health policy research at the Cato Institute, the proposed budget would not reduce Medicaid funding. It would just entail slower growth.
The Congressional Budget Office estimates that to maintain present services, Medicaid’s budget will need to increase by 4% to 6% every year, in line with the annual increase in private insurance spending. To lower the federal outlay by $880 billion over ten years, the program’s budget could only grow at a 3% annual rate.
Medicaid laws require that nursing home stays be covered for those who qualify. However, they do not require coverage for in-home personal care. If money is tight, nursing facilities may still get paid, but home caregivers and other support services may not, says Nicole Jorwic, chief program officer at Caring Across Generations, an advocacy organization that supports care work. “There’s a real likelihood of unnecessary institutionalization, because of what states would have to do,” warns Jorwic. Disabled and elderly people who could have stayed at home with little help may need to be in a nursing home since it is the only way they can receive care.
States might modify eligibility requirements to make it more difficult for middle-income individuals to qualify for Medicaid. Eligibility varies by state and program, but many states require that you earn less than $34,812 per year and have less than $2,000 in assets. To qualify, some families will deplete their savings. Currently, there are legal ways to protect some of your assets if you plan. If these loopholes were closed, some middle-income persons could be able to pay for services themselves.
However, some elderly people who are now eligible for Medicaid were not poor to begin with. Paying for long-term care can ruin even middle-class families. A large survey of providers in 2024 found that assisted living costs an average of $70,800 per year. A private room in a nursing home costs approximately $127,750.
More than half of all persons over the age of 65 are likely to require long-term care at some point. Only 4% have long-term care insurance to cover the cost. According to Cannon, reducing Medicaid payments may encourage more people to purchase long-term care insurance for themselves. Currently, there is little incentive to buy insurance because Medicaid will cover the cost for anyone who runs out of money.
However, that wouldn’t help people like me who rely on Medicaid right now. As a person with cerebral palsy, Medicaid impacts me every single day. Medicaid allows me to live in my apartment where I receive around-the-clock care.
Specifically, Massachusetts Medicaid provides the funding for my PCAs (Personal Care Assistants). My PCA helps me with activities of daily living, including bathing, dressing, and toileting. Without Medicaid, I wouldn’t be able to pay for PCA services, which cost more than $50,000 annually.
The Senate budget resolution passed on April 5 does not include the same cuts as the House version, and some Republican senators have stated their opposition to any Medicaid changes. Later this year, the two chambers will work out the details, including the final size of the Medicaid budget for the following ten years.
Medicaid is more than healthcare insurance for low-income Americans. Medicaid is the difference between life and death for many. People’s lives should be more important than money and politics.
Sources:
Chidambaram, Priya, and Alice Burns. “How Many People Use Medicaid Long-Term Services and Supports and How Much Does Medicaid Spend on Those People?” KFF, KFF, 14 Dec. 2023, http://www.kff.org/medicaid/issue-brief/how-many-people-use-medicaid-long-term-services-and-supports-and-how-much-does-medicaid-spend-on-those-people/.
Diament, Michelle. “House Vote Tees up Billions in Cuts to Medicaid, Disability Services.” Disability Scoop, Disability Scoop, 27 Feb. 2025, www.disabilityscoop.com/2025/02/27/house-vote-tees-up-billions-in-cuts-to-medicaid-disability-services/31321/.
“Genworth and CareScout Release Cost of Care Survey Results for 2024.” Genworth Financial, Inc., Genworth Financial, Inc., 4 Mar. 2025, investor.genworth.com/news-events/press-releases/detail/982/genworth-and-carescout-release-cost-of-care-survey-results.
“Home- and Community-Based Services.” Centers for Medicare and Medicaid Services, The United States Department of Health and Human Services , 13 Jan. 2025, http://www.cms.gov/training-education/partner-outreach-resources/american-indian-alaska-native/ltss-ta-center/information/ltss-models/home-and-community-based-services.
Heasley, Shaun. “Billions Are Spent on IDD Services Annually. Where Does It All Go?” Disability Scoop, Disability Scoop, 16 July 2024, http://www.disabilityscoop.com/2024/07/16/billions-are-spent-on-idd-services-annually-where-does-it-all-go/30967/.
McGowan, Kat. “How Cutting Medicaid Would Affect Long-Term Care and Family Caregivers.” NPR, NPR, 14 Apr. 2025, www.npr.org/2025/04/14/g-s1-59261/medicaid-cuts-long-term-care-caregivers?utm_source=facebook.com&utm_term=nprnews&utm_medium=social&utm_campaign=npr.
Insane to cut Medicaid