WASHINGTON — As Republicans in the U.S. House moved to extract huge cuts from Medicaid, Minnesota’s hospitals and community health centers have mobilized to turn back a threat to their financial health and the care of low-income Minnesotans.
Medicaid, called Medical Assistance in Minnesota, covered — on average — more than 1.4 million low-income Minnesotans a month in 2023. That’s about 25% of the state’s residents.
But the GOP budget plan that was approved on a largely party line vote Tuesday evening seeks about $2 trillion in cuts focused on a handful of federal agencies and was drafted to advance President Donald Trump’s agenda and his wish for a “big beautiful bill” that would do so.
The Department of Health and Human Services was singled out for the largest reduction, about $880 billion. Although the budget resolution did not specify which programs to cut, that amount of savings could only be found in the agency through deep reductions to Medicaid.
Cuts of that size would hurt the state’s budget, which is already projected to have a deficit.
Medicaid costs are shared between the state and the federal government. The state’s share, which is more than 50% for some Medicaid recipients and only 10% for those added through an expansion of the program in 2014, accounts for a big slice of the state’s budget.
Medical Assistance spending is projected to be $19.8 billion this year, of which $11.2 billion would come from the federal budget — unless there are cuts to the program. The Minnesota Office of Management and Budget estimates the proposed cuts to Medicaid would cost the state more than $1 billion a year.
The House budget resolution would also likely cut funding for other social safety net programs, including Pell Grants and food stamps, while extending most of the tax cuts — mainly for higher income individuals and corporations — that were approved in Trump’s first term in office. Those tax cuts will cost the U.S. Treasury at least $4.5 trillion.
The House budget bill would also raise the debt ceiling by $4 trillion over two years and add almost $3 trillion to the federal deficit over 10 years.
The looming threat to Medicaid and other social programs gave Democrats this week a political cudgel that can be deployed in next year’s midterm election.
“House Republicans are using their majority to serve their wealthy donors at the expense of working families,” Rep. Betty McCollum, D-4th District, said after approval of the budget blueprint. “The budget they passed tonight cuts Medicaid by $880 billion, cuts SNAP by $230 billion and balloons the deficit by $4 trillion to extend tax breaks for giant corporations and billionaires like Elon Musk.”
‘You gotta be careful’
The House budget bill was approved after Trump convinced a handful of Republican holdouts, some of them representing “purple” districts, who were concerned over a backlash over steep Medicaid cuts.
There were others in the Trump camp who also cautioned against targeting Medicaid. Steve Bannon, a former Trump adviser, had warned Republicans against taking a “meat ax” to the program to pay for Trump’s priorities.
“Medicaid, you gotta be careful,” Bannon said on a recent podcast. “Because a lot of MAGAs are on Medicaid, I’m telling you. If you don’t think so, you are dead wrong.”
Reps. Tom Emmer, R-6th District; Brad Finstad, R-1st District; Michelle Fischbach, R-7th District; and Pete Stauber, R-8th District — all of whom voted for the budget blueprint — were also warned by GOP lawmakers in the state Legislature against making deep cuts to Medicaid.
“Just to emphasize what you already know, Medicaid includes services and care for the seniors and those with disabilities, not just health care for the poor,” said a letter to the Republican members of Congress signed by six GOP state senators and eight GOP state House members. “Additionally, nearly 50% of all Medicaid enrollees are children.”
According to a dashboard of congressional districts created by New York University and the Robert Woods Johnson Foundation, the highest percentage of Medicaid recipients (a little more than 25% ) in Minnesota live in Minneapolis and St. Paul and the fewest in the Twin Cities suburbs (about 15-17%.)
But there are many residents enrolled in Medical Assistance in Greater Minnesota, too.
For example, according to the dashboard, 23.4% of the residents in Fischbach’s western 7th congressional district are enrolled in Medical Assistance as are 24.6% of the residents in Stauber’s northwestern 8th congressional district.
Those lawmakers are being lobbied by community health centers who are dependent on Medicaid revenue and are hoping Congress changes course.
Jonathan Watson, the CEO of the Minnesota Association of Community Health Centers, said nearly half of the centers’ patients are on Medical Assistance. He said the combined budget for the center is about $244 million, with about $95 million coming from Medicaid.
Dependence on Medicaid is especially critical in health centers located in rural areas, where they serve about one out of every five residents, Watson said.
He also said his association has determined that cuts of the size approved by the U.S. House could only be accomplished by rolling back the expansion of the Medicaid program that allowed, for the first time, for childless adults to enroll in Medical Assistance coverage and the imposition of work requirements on program recipients.
“In any case, we estimated that 20,000 of our patients would lose coverage,” Watson said.
Rahul Koranne, a primary care doctor and president and CEO of the Minnesota Hospital Association, said the state’s hospitals are already in “precarious” financial health and cuts to Medicaid would make them even less stable.
“Forty percent of our hospitals are operating in the red,” Koranne said.
He said hospitals are already eliminating mental health, labor and delivery, adult day care and dialysis services and would have to continue to limit care to all patients if Medicaid funding is reduced and hospitals are required to treat more uninsured patients.
“The patients who will be affected will not be only the Medicaid patients, but all the patients, including those with good health insurance plans,” Koranne said.
U.S. Senate does not agree
The U.S. Senate, which like the U.S. House is under GOP control, has rejected Trump’s call for one “big, beautiful bill” that would cut the budget, reinstate massive tax cuts and raise the debt ceiling.
The Senate has drafted its own bill, which boosted the budget for the Pentagon and for border security but did not contain deep cuts to any programs or the extension of Trump’s tax cuts.
On Wednesday, Senate Majority Leader John Thune, R-South Dakota, indicated he would consider adding the tax cuts to the Senate’s budget bill, but would not accept deep cuts to Medicaid or any other social safety net program.
Some GOP senators, however, said they were open to imposing Medicaid work requirements but would not support any cuts to the program that affected working Americans.
House and Senate leaders are expected to meet in informal talks next week in an effort to reconcile their dueling budget bills.
Ana Radelat
Ana Radelat is MinnPost’s Washington, D.C. correspondent. You can reach her at aradelat@minnpost.com or follow her on Twitter at @radelat.
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