Slashing federal Medicaid will harm Minnesota’s most vulnerable

Minnesota hospitals like North Memorial in Robbinsdale received $3.5 billion from the Medicaid program in 2023. File photo by Will Jacott/Minnesota Reformer.

Even though we’re hearing mixed messages from President Trump on whether he will protect Medicaid funding, the Republicans in the U.S. House of Representatives have sent a clear message that they intend to cut over $800 billion from the Medicaid program over 10 years to pay for a generous tax cut for corporations and the wealthy. In 2023, federal Medicaid spending was $589 billion and accounted for 9% of the federal budget. To put this funding in context, historically, defense spending was 15% of the federal budget.

Medicaid helps low-income older adults with their health care expenses, including nursing home stays, and covers health care services for children and people with disabilities. In Minnesota, children comprise a majority of enrollees, but spending is driven by low-income seniors. 

About 1 in 5  Minnesotans are enrolled in Medicaid, which in Minnesota we call Medical Assistance, with higher percentages in select counties in Greater Minnesota, such as Mahnomen (55%), Beltrami (38%), and Wadena (37%). 

In 2024, Minnesota spent a total of $18.5 billion on Medicaid, of which $11 billion (60%) was federal funding. The annual federal Medicaid funding represents 36% of Minnesota’s annual general fund budget. If Republicans cut federal Medicaid by $880 billion it will likely result in a minimum cut of $2 billion every year from Minnesota’s budget. This is a significant reduction. 

Republicans have suggested reforming Medicaid by giving states block grants. Block grants are essentially a lump sum of money, and it is likely that the formula for the block grant will be based on the number of Medicaid beneficiaries in each state. Currently the federal government funds a set percentage of all Medicaid expenses for each state. If Republicans are successful in cutting Medicaid, the block grants will be much less than the amount Minnesota typically receives. Plus, Minnesota has an older population compared to other states, thus the cuts may disproportionately impact our state, meaning less money to cover children, people with disabilities and seniors — all populations I believe most Minnesotans care about. 

Reductions in federal Medicaid funding will negatively impact nursing homes and hospitals. Long-term care facilities are forecasted to receive $1.4 billion from Medicaid in 2026; of that sum, $752 million is federal funding. In 2023, Minnesota hospitals received $3.5 billion from the Medicaid program. 

Most Minnesotans would likely prefer their local hospitals stay open and offer comprehensive services. They also likely want access to nursing homes across the state when they or their loved ones need them. The Medicaid cuts would be devastating for these providers and could severely limit access to care for Minnesotans.

In addition to the Medicaid funding cuts, Republicans are proposing work requirements for Medicaid beneficiaries. In 2018, Republican state legislators in Minnesota proposed Medicaid work requirements. Back then it would have cost the state $10 million each biennium just to implement the work requirement (e.g. verify eligibility for exemptions and frequently check compliance with work status), costing more money than it saved. Only 5% of all Minnesota Medicaid beneficiaries would have been impacted by enforcing a work requirement, as 95% are either working or exempted.

We do need to address our nation’s growing debt and reduce waste, fraud and abuse. But we don’t need to put that burden on our most vulnerable people. 

Instead, we should develop fair tax policies, so corporations and the very wealthy pay their fair share. Cutting individual income and estate tax provisions for households with incomes over $321,000 costs around $1.8 trillion through 2034. This amount is similar to the spending cuts Republicans in Congress have proposed — including $230 billion from the Supplemental Nutrition Assistance Program.  Currently folks may exempt $11 million from the estate tax. Of the tax cuts for wealthy households, $200 billion is for an estate tax giveaway that shelters $6 million per estate on the 1,000 wealthiest estates. In contrast, the average SNAP benefit is $6.20 per person per day, which helps feed hungry children.

Savings could be found in the privatized Medicare program called Medicare Advantage. We waste between $88 to $140 billion per year in taxpayer money by overpaying private health insurance plans to manage Medicare benefits. That is roughly $1.6 trillion over ten years. Republicans should be addressing waste and potentially fraud by the private health insurers who offer Medicare Advantage plans, but that is not on their proposed list. It should be high on DOGE’s list too if that group is truly interested in waste and fraud.

Many Republicans speak about the importance of their religion in shaping their values and policies. There are apparently over 200 Bible verses about helping the poor. In fact, Proverbs 14:31 says, “Whoever oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God.” I wonder what God would think of punishing children to help generate more wealth for those who least need it. 

Helping your neighbors in need is humane and part of our way of life in Minnesota. We shouldn’t allow misguided policies of Republicans in Congress to destroy Minnesotans’ moral values that are based on empathy and compassion.