STATEMENT: Narrowly Passed Budget Bill Will Harm Lives and Livelihoods in Every State
The budget bill that passed in the House today—soon to be signed by President Trump—will have devastating repercussions for all who live in this country. Direct care workers and their families are among the millions who will be deeply impacted as the law imposes $930 billion in cuts to Medicaid. A staggering total of 17 million people are expected to lose health coverage. The Supplemental Nutrition Assistance Program (SNAP) will be radically reduced. For the first time, SNAP costs will be shifted to individual states, seriously undermining access to food and other essentials for direct care workers and so many others.
The passage of this bill is a cause for national reflection and deep concern. Individuals, families, and communities across our nation—and each one of us—deserve better.
Today’s developments are also cause for resolve. Voters, advocates, federal and state policymakers, and long-term services and supports providers will be called to action in the times ahead. Together, we can strengthen the quality of jobs held by direct care workers and improve quality of care for the benefit of older adults, people with disabilities, and family caregivers alike.
Medicaid—Protecting This Program Matters for Each of Us
For six decades, Medicaid has provided efficient, cost-effective health coverage. The changes that President Trump will soon sign into law represent the largest cuts in the program’s history, pushing health care costs onto the Americans who can least afford to absorb them, and creating harmful ripple effects across society. As history has shown, Medicaid cuts at the federal level will cause states to slash support for older adults and people with disabilities. An early analysis estimated that these cuts will cause nearly 17,000 preventable deaths per year due to lost health coverage.
This legislation was deeply unpopular and passed by razor-thin margins in both the House and Senate. In the months leading up to the budget debate, fewer than one in five Americans indicated support for Medicaid cutbacks, and federal lawmakers faced contentious town halls with concerned voters. The Trump Administration’s response has been to repeatedly deny that it is cutting Medicaid at all, despite widespread concern about the true severity of these cuts, including from moderate Republicans.
Medicaid is the primary payer for long-term services and supports in our country. The Trump Administration and all but a few Republicans in Congress have failed in their responsibility to protect this program, which will soon see its ability to sustain home and community-based care for 7.8 million Americans and nursing home care for six out of every ten nursing home residents severely weakened.
Short-Sighted, Dangerous Cuts
The law brings into motion an unprecedented range of harmful cuts. These cuts include, but are not limited to:
Direct Care Workers’ Benefits Coverage: Low wages mean that nearly a third of direct care workers rely on Medicaid themselves, and 28 percent rely on food and nutrition benefits, including SNAP. New eligibility and verification requirements for Medicaid will threaten coverage for these workers, many of whom have obtained coverage through Medicaid expansion, while other provisions of the law may challenge their access to SNAP.
Overall Access to Coverage: Other provisions of this law will make it more difficult for individuals to apply for Medicaid, get covered, and stay covered through the program. Onerous and more frequent verification requirements for continued eligibility will pose significant administrative burdens on both states and individuals. Because Medicaid pays for some Medicare costs for many individuals who are dually eligible for both programs, the law will increase out-of-pocket costs for Medicare beneficiaries as well.
A Greater Burden for People Living in or Near Poverty: For Medicaid beneficiaries living just above 100 percent of the federal poverty level ($16,000 per year for individuals), the law will require paying out of pocket for many health care costs (this provision is referred to as “cost-sharing”). While a significant percentage of direct care workers live in poverty, those who live just above the poverty line will be forced to cover these additional costs or go without care—threatening their health and workforce participation. This, in turn, will worsen recruitment and retention challenges, exacerbate the workforce shortage, and compromise the quality and continuity of care.
Work Requirements: Implementation of community engagement (work) requirements—which will require many Medicaid recipients to prove that they work, volunteer, or are enrolled in an educational program for at least 80 hours per month—will be required by the end of 2026. In a field with a high prevalence of part-time hours, direct care workers will struggle to meet these monthly requirements. Further, disrupting health coverage for Medicaid-eligible people will threaten vital caregiving connections between direct care workers, older adults, and people with disabilities, as well as directly undermining direct care workers’ own coverage.
Provider Taxes: The law will freeze existing provider taxes—state taxes on health care providers that help support the state’s share of Medicaid—while also halting the establishment of new ones. Reductions to provider taxes will increase state taxes in general, reduce provider payment rates, and undermine access to care. Crucially, these economic impacts will likely lead to stagnation of direct care wages, which are already well behind wages for competitive occupations in other industries.
Nursing Home Staffing Standards: This law imposes a ten-year moratorium on any implementation of the Center for Medicare & Medicaid Services (CMS) staffing standards rule. Nursing home residents and direct care workers deserve adequate staffing and safe working and living conditions. The staffing standard had been estimated to potentially save 13,000 lives per year; eliminating it will result in that many preventable deaths per year.
A Cruel Focus on Immigrants
Eliminating Eligibility: This law includes provisions to eliminate Medicaid eligibility and other program eligibility for documented immigrants who are not permanent residents. This will be particularly detrimental to direct care workers and the people who rely on them, since nearly one in four direct care workers are immigrants, and many rely on Medicaid and other public programs due to persistently low wages. Notably, the law also eliminates access for these immigrants and their families to the Children’s Health Insurance Program (CHIP).
Punishing States Providing Coverage for Immigrants: The law will penalize states that provide health care coverage to undocumented immigrants by reducing the Federal Medical Assistance Percentage (FMAP)—the degree to which the federal government supports states’ Medicaid spending—by more than 10 percent. This will force some states into difficult financial tradeoffs and likely result in further reductions to Medicaid coverage and services.
A Sweeping Anti-Immigration Agenda: This law diverts approximately $150 billion to immigration and customs enforcement, including $46.5 billion toward the construction of a border wall and associated infrastructure. During the same week that President Trump is touting a disturbing and regressive open-air prison for immigrants, his administration is advancing harsh healthcare and food assistance policies that target millions of immigrants and many more across our nation.
Conclusion: A Call for Resolve—and Action
The Trump administration and Congress have abdicated their responsibility to the health and wellbeing of all who live in this country. Undoing these devastating actions—and continuing to build up our nation’s health care and long-term services and support systems—will be a critical focus for PHI and many other advocates in the months and years ahead.
“Even as we struggle to accept this unjust law, we need to begin looking ahead,” said Jodi M. Sturgeon, PHI President and CEO. “Direct care workers, older adults, and people with disabilities will need our support more than ever. We must continue to work together to mitigate the damaging provisions of this law and focus our collective energy on building a better vision for the future.”
