As Medicaid turns 60, the U.S. faces the largest federal health care subsidy rollback in its history.
The One Big Beautiful Act, signed by President Trump last July 4, slashes federal Medicaid spending by 15%. Over the next decade, it will eliminate over $1 trillion from federal health care and food aid, largely by imposing work verification requirements on recipients and shifting cost burdens onto states.
The Congressional Budget Office estimates the law will leave 11.8 million Americans uninsured by 2034, with another 5.1 million losing coverage due to other changes — including the expiration of Affordable Care Act (ACA) premium tax credits at the end of this year.
The bill also cuts $500 billion from Medicare, the federal health insurance program for seniors and disabled Americans. As of 2024, about 12.8 million people were enrolled in both programs.
While the future for many of the 79 millionMedicaid enrollees nationwide now seems dire, many experts say that California’s fight to preserve historic expansions of Medi-Cal — its version of Medicaid — can serve as a model for the rest of the country.
‘This is all undoable’
“This was a disastrous bill. That it passed is a major setback to health care, health coverage and health costs,” said Anthony Wright, executive director of Families USA and former head of Health Access California, at an August 1 briefing held by American Community Media.
“As you push people out of coverage, that leaves a smaller and sicker risk pool, which means that premiums have to go up to cover that population,” he continued. “At the end of the day, this is a cut to hospitals, clinics, other health care providers and state governments, which will then have to make some tough choices about what they cut — people, benefits or rates to providers.”
He noted that rural hospitals, community clinics, nursing homes and maternity wards — all heavily reliant on Medicaid — are particularly vulnerable.
Nearly half of all U.S. children and approximately 41% of births are covered by Medicaid, with some states and rural areas exceeding 60% of births.
“This is all undoable. This is all changeable,” said Wright, referring to the September 30 deadline for Congress to pass or kill the Health Care Affordability Act, which make the ACA tax credits permanent.
If the credits expire, 20 million Americans could see premiums rise by 75% on average, and 4.2 million more could lose coverage altogether.
“Rising premiums, people losing coverage, services being scaled back or closed — we need to make sure people connect the dots back to this bill, because if they don’t, there will be additional cuts,” added Wright. “In this bill, members of Congress voted to extend trillions in tax cuts for the wealthy and corporations, but they neglected even to extend the tax credits that help people afford health care.”
A ‘domino effect’
“60 years ago, working communities that needed extra help were left in a gap where they needed to choose between medicine and food, between the education of their children and taking care of medical problems … Health care insurance is a lifeline,” said Dr. Ilan Shapiro Strygler, a practicing community physician, chief health correspondent and medical affairs office at AltaMed Health Services.
AltaMed is one of the largest independent Federally Qualified Health Centers in the nation, serving over 500,000 patients in over 60 centers across Southern California.
“My patients before, when there was no coverage, were using the ER as a principal point of healthcare,” continued Strygler. “ERs save our lives, but they’re not the best place to take care of mammograms. It’s not the best place to talk about diabetes or high blood pressure.”
With immigration crackdowns nationwide and an immigration status data-sharing agreement in place between Centers for Medicare and Medicaid Services and the Department of Homeland Security, Strygler said he fears now that many patients will be too fearful even to seek emergency care.
This will create a “domino effect,” he warned, where “complications are going to go up, things that we can prevent, that we have the technology for, and then the cost will start going up.”
Medicaid is among the most cost-efficient health programs in the U.S. It has lower total and per-capita costs than private insurance, due in part to lower reimbursement rates and tighter cost controls.
According to the Medicaid and CHIP Payment and Access Commission, administrative costs generally total 5% of Medicaid spending, while administrative overhead ranges between 12% and 18% of all spending for private insurers.
“Medicaid came into existence 60 years ago as a Civil Rights-era program to ensure that the government provided basic health care to poor people. It was passed fairly quietly alongside the creation of Medicare and the passage of the Voting Rights Act and the Civil Rights Act,” said Cary Sanders, senior policy director of the California Pan-Ethnic Health Network.
“This is important, this history, because of the interconnection now between the attack on Medicaid and the attack on our civil rights,” she continued. “As much as Medicaid is a health care program, it’s also an anti-poverty program, and it’s foundational to our ability to advance health equity … A cut is not just to the individual. It’s to the entire system.”
In California, the state projects a loss of over $30 billion in federal funding, and coverage losses for 3.4 million residents.
A UC Berkeley Labor Center analysis estimates the cuts will result in up to 217,000 lost jobs, $37 billion in reduced economic output and $1.7 billion in reduced state and local tax revenue.
“No matter how people try to sell this bill, the more people know about it, the less popular it is,” said Sanders. “Many large employers don’t provide health care for their workers, which is why so many workers are on Medi-Cal … Maybe now, in this moment where we have so much to lose, it’s time to look at making sure that everybody’s paying their fair share.”
