Hundreds of thousands of poor, disabled or pregnant Mississippians could lose health care coverage if Congress slashes funding for Medicaid.
Although President Donald Trump has vowed Medicaid won’t be “touched,” the U.S. House of Representatives passed a budget resolution Tuesday that instructs the committee that oversees Medicaid and Medicare to cut $880 billion over 10 years. The cuts will help pay for Trump’s agenda on tax cuts and border reform.
The talk of such dramatic changes to the federal-state program has Mississippi lawmakers concerned – and hesitant to push expansion this year.
Proposals for Medicaid budget cuts nationwide include lowering the rate at which states are reimbursed for Medicaid services, capping the amount of money states can get per enrollee, and imposing block grants – meaning states would receive a fixed dollar amount for the program, regardless of need.
Mississippi, the poorest state in the nation, could suffer the most under some of these proposals, according to health policy experts.
Despite the state having some of the strictest eligibility requirements in the nation, pervasive poverty and poor social health determinants mean that more than 650,000 Mississippians – about half of whom are children – rely on the program for basic health care. More than half of births in Mississippi are funded by Medicaid.
“Mississippi has a relatively small population, with the lowest per capita annual income in the country, rates of chronic conditions that are consistently higher than the national average, and with around 60% of Mississippians living with multiple chronic conditions,” explained John Dillon Harris, a health care systems and policy consultant at the Center for Mississippi Health Policy. “… The result is a large Medicaid population that is very expensive to treat.”
Democratic lawmakers are also sounding the alarm about deep cuts to Medicaid. Rep. Omeria Scott, D-Laurel, said it’s something Mississippians “ought to really be afraid of.”
“If they are talking about cutting $880 billion out of the budget, Mississippi is going to be on its knees,” she said at the Democrats’ legislative press conference Tuesday.
However, since Mississippi is one of only 10 states not to expand Medicaid and draw down billions in additional federal funds, some proposed cuts wouldn’t directly affect the state’s current budget – though they would affect future enrollment.
“Mississippi isn’t drawing down as much, so that’s not going to be a direct cut to your current budget, but it’s an opportunity cost,” said Joan Alker, Medicaid expert and executive director of Georgetown University’s Center for Children and Families.
Threats to slash Medicaid spending have already scared away Mississippi lawmakers from attempting expansion this year – though they have passed “dummy bills,” void of details, to keep the issue alive “should something transpire,” House Speaker Jason White said.
After a decade of squelching any debate on the issue, Mississippi House GOP leaders in 2024 pushed for legislation that would expand Medicaid to 200,000 low-income adults, as 40 other states have done. While the bills died after a saga of partisan politics, advocates were hopeful that the historic session created enough momentum to get the policy through the finish line in 2025.
Now, lawmakers fear they may have bigger problems on their hands.
“Unfortunately, we’re hearing more about what may be cuts or block grants to the Medicaid program in general that we will have to deal with as a state because there’s no denying we have a large Medicaid population – so I don’t know the chances,” White said when asked about the likelihood Medicaid expansion would be brought up this year.
Others are more certain the issue is dead this year.
“In a most practical sense, I’d say we probably won’t be doing anything this year,” Senate Medicaid Chairman Kevin Blackwell told Mississippi Today, though he added that if anything changes, lawmakers could suspend the legislative rules and bring a bill back to life late in the session.
Click the dropdown to learn more about the specific proposals that would reduce Medicaid funding:
Reducing the federal match rate
The federal government could reduce the federal matching rate, or FMAP, which determines the percentage of Medicaid costs the federal government pays to each state. How much this would affect Mississippi would depend on the language of the proposed cut.
Mississippi currently has the highest FMAP in the country at 76.9% – meaning the federal government pays for nearly 80% of Mississippians’ Medicaid coverage, while the state makes up the rest – because of the state’s high poverty rate.
One of the proposals would take away the FMAP floor. As it stands, all states receive at least a 50% FMAP, even if they “should” be receiving less, according to the per capita income formula. If that floor was removed, richer states would be affected, as their FMAP would drop below 50%. Mississippi would likely not suffer from this proposal.
Another proposal would remove the increased federal match rate of 90% that the federal government offered to newly-expanded states in the last few years. Without the increased match rate, expansion would not hold the financial favor that has made it politically palatable to Republicans in the state.
Capping benefits per enrollee
The feds could also impose what’s called a “per capita cap,” limiting the amount a state could spend on Medicaid per person. If the caps were implemented, Medicaid would only receive a certain amount of money from the federal government to cover the care of a beneficiary – regardless of his or her medical needs. States would be locked into a fixed amount based on what they have historically spent.
The fact that Mississippi has one of the lowest per person Medicaid spending would count against the state – locking it into a lower fixed budget.
Alker, the Medicaid expert from Georgetown University, says pushing expansion legislation through this year could make Mississippi more likely to receive a higher per capita budget – though it’s no guarantee.
“I’ve seen proposals that look at taking away the American Rescue Plan Act incentives, which is extra funding for states that newly come to expansion … I have seen some chatter about how one proposal is to take away those incentives, but to not take them away from states that were counting on them,” explained Alker.
“In other words, sort of grandfathering in North Carolina and South Dakota (states that expanded Medicaid in the past two years). So, if anything, it might be smart for Mississippi to do the expansion this session and lock that in.”
Imposing a block grant
Imposing block grants would be similar to per capita caps, but arguably more punishing for states since funding wouldn’t change based on enrollment growth.
Block grants would limit states’ abilities to respond to emergencies, and would especially hurt rural areas, research says.
Limiting provider tax
Mississippi is currently almost maxed out on the tax it’s allowed to impose on hospitals, which helps the state pay for its share of Medicaid spending. One option being discussed in Congress is to lower the limit of or eliminate the tax, which would mean hospitals would be reimbursed at a lower rate and there would be less state money to fund the Medicaid program.
The proposal is less likely to garner support, explained Harris, the policy consultant at the Center for Mississippi Health Policy.
“It’ll be difficult to move this particular reform through Congress since such a large number of states, both red and blue, rely on this tax to pay for their programs,” he said.
But if it did go into effect, the impact would be profound.
“The state would have to get really creative in figuring out what to tax and how in order to maintain the current level of support hospitals receive through these supplemental payments,” Harris said.
Imposing work requirements
Work requirements have long been discussed as a means of making Medicaid expansion more palatable to conservatives who view the program as “welfare.” Now, Congress may decide to impose work requirements on the regular Medicaid population.
As it stands, Mississippi has one of the country’s strictest income requirements for Medicaid. Childless adults don’t qualify, and parents must make less than 28% of the federal poverty level, a mere $7,000 annually for a family of three, to qualify. More times than not, that means that working a full-time job counts against an individual.
If the state were to keep its strict income requirements while also imposing a work requirement, it would be difficult for Mississippians to qualify for the health care program.
The red tape that a work requirement would create would also likely deter eligible Mississippians from enrolling or staying on the program.
Lt. Gov. Delbert Hosemann said Mississippi lawmakers have “a leg up” since the state’s former Medicaid director recently landed a spot in Washington leading the federal Medicaid division under Trump. Hosemann has yet to say what, if anything, Snyder has told lawmakers so far, but said he expects to have “a direct commentary into the area of Medicaid” through Snyder.
Regardless of what action the federal government decides to take, cuts of this magnitude would affect millions of low-income people across the country, not just in Mississippi.
“States will be forced to deeply cut eligibility, benefits and reduce provider rates,” Alker said in a statement published online in response to the House budget resolution outlining Medicaid costs. “These cuts will especially harm rural communities who are more reliant on Medicaid, and where hospitals are already operating on tighter margins.”
Taylor Vance, Geoff Pender and Michael Goldberg contributed to this report.
Mississippi Today receives grant support from The Bower Foundation, as does the Center for Mississippi Health Policy. Donors do not in any way influence our newsroom’s editorial decisions. For more on that policy or to view a list of our donors, click here.
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