Medicaid is an American government health programme for poor and disabled citizens. As of 2026 it provides health coverage for almost 77m Americans, roughly 26m more than 15 years earlier. The Affordable Care Act fuelled that growth but also supercharged the programme's cost: in 2024 Medicaid made up 3.2% of GDP, up from 2.6% in 2010.
Ten states have not expanded Medicaid, in part because of the welfare-state connotations of doing so. The reluctance is concentrated among Republican-led states.
Work requirements—making able-bodied recipients prove they are working, training or volunteering—have long been a fixture of conservative thinking on social benefits. Six in ten Americans support adding them, though cutting Medicaid in general is deeply unpopular.
During Donald Trump's first term Arkansas experimented with work requirements. Recipients had to report their working hours monthly or risk losing insurance. By the time a judge halted the programme, 18,000 people had lost coverage. Researchers found most were still eligible but had missed or botched their paperwork. Among those who lost Medicaid, half reported serious problems paying medical debt and almost two-thirds delayed taking medicines because of cost. There was no increase in employment in the 18 months after the change.
In 2023 the Congressional Budget Office found that a House Republican plan for work requirements would not increase employment but would save money. In 2025, as Republicans sought budget savings to fund tax cuts, a House committee proposed requiring recipients aged 19 to 64 to do 80 hours of work, job training or volunteering per month from 2029, with exemptions for those with dependents or disabilities. The CBO estimated this approach would reduce the deficit by $715bn over ten years but leave 8.6m fewer Americans insured by 2034.
Since Trump re-entered office, 13 states have started proposing their own work-requirement schemes through federal waivers.
States finance their share of Medicaid costs partly through "provider taxes"—levies on hospitals, nursing homes and other medical offices. The hospitals then receive much, if not all, of that money back for providing Medicaid services. Because the federal government roughly doubles whatever states spend, this arrangement allows states to increase hospital payments without spending any state money. In Arizona, for example, a hospital tax passed in 2020 increased payments to hospitals by over $1bn at no net cost to the state. The taxes are legal but their importance has grown over time. In 2025 Congressional Republicans proposed capping provider taxes in states that expanded Medicaid from 6% of patient revenues to 3.5%, and scrapping taxes on insurers administering Medicaid revenue. Past estimates suggest capping the rate at 2.5% would save the federal government about $240bn over ten years, or roughly 4% of total Medicaid spending.
The One Big Beautiful Bill Act, passed in July 2025, represents the largest assault on Medicaid in the programme's history. The Congressional Budget Office estimates over $900bn will be cut from the programme over the next decade. As many as 14m additional people could become uninsured by 2034. Researchers at the University of Pennsylvania and Yale have calculated that this could mean an additional 51,000 deaths a year. Only 8% of Medicaid enrollees do not work or have an exemption from work requirements. States are now required to reassess recipients' eligibility every six months rather than every year. The bill also requires states to shoulder more of the cost. Republicans delayed the start of the new work requirements until after the 2026 midterm elections.
Because Medicaid is such a large programme, cuts to it ripple well beyond its direct recipients. Medicaid's expansion has been linked to rising credit scores, falling evictions and falling bankruptcies among beneficiaries. Hospitals that serve large Medicaid populations are especially vulnerable: safety-net institutions such as St Barnabas Hospital in the Bronx, where two-thirds of local residents are on Medicaid, face losing 12% of their budget under the 2025 bill. The interstate gap in health outcomes—already stark, with the richest 1% of American men living nearly 15 years longer than the poorest 1%—is expected to widen as wealthy Democratic states compensate for lost subsidies while Republican states enforce new paperwork requirements more quickly.
In the final months of the Biden administration, a pilot programme was approved that allows Medicaid to cover traditional Native American healing rituals—such as sweat lodges and smudging (burning herbs)—in Arizona, California, New Mexico and Oregon, states containing just over a quarter of Native Americans. Individual tribes can pick what healing is included and who is qualified to do it. To qualify, people must be enrolled in Medicaid and be a member of a federally recognised tribe or a close family member (California covers only those in treatment for addiction). About a quarter of working-age Native Americans are on Medicaid. Native Americans are some of the sickest people in the nation, with life expectancy eight years behind the average; alcohol death rates are five times higher for Indians than among white Americans. The money for traditional healing is authorised for two to five years depending on the state.
Donald Trump won Medicaid recipients by two points in 2024. Four years earlier he had lost them by 19 points.
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