By Healthcare Brew Staff
less than 3 min read
Definition:
Medicaid is a government program that’s funded by state and federal governments and administered on a state-by-state basis to provide health insurance coverage to low-income adults, pregnant people, children, and people with disabilities.
How does Medicaid work?
Medicaid is overseen by the Centers for Medicare and Medicaid Services (CMS) and provides coverage to almost 80 million adults and children as of April 2025. The federal government matches each dollar states spend, contributing 50% to 83% of a state’s total, with wealthier states receiving a smaller percentage, according to KFF. States also use provider taxes to partially fund their Medicaid programs.
What are Medicaid redeterminations?
During the Covid-19 pandemic, Medicaid eligibility determinations were put on hold, and the federal government gave states higher reimbursements to keep beneficiaries enrolled. By 2023, states started working through the backlog of redeterminations, referred to as an “unwinding” process, to see who was and was not still eligible.
By Q3 2024, though, payers were reporting lower earnings, which were adversely impacted by these redeterminations.
What’s happening with proposed Medicaid cuts?
Since January 2025, the Trump administration has proposed cutting Medicaid to help reduce the country’s overall debt and as a part of Elon Musk-led DOGE’s proposed federal government reductions. Originally, the House of Representatives called for $880 billion to be cut from Medicaid, which would have put 880,000 at risk of being cut, according to a Commonwealth Fund report.
That was revised under the One Big Beautiful Bill Act to include work requirements, for which most beneficiaries would have to prove that they’re employed or actively looking for work.
