photo by: Screenshot

CEO and President of the REACH Healthcare Foundation Brenda Sharpe speaks at a webinar on Tuesday, April 29, 2025.

As members of Congress are being asked to find $880 billion in cuts to health spending, Medicaid advocates are warning of tough choices ahead for states like Kansas — choices that could cost them billions of dollars or cause thousands of people to lose their health coverage.

In February, House Republicans passed a budget resolution that instructs the committee that handles health care spending to identify at least $880 billion in savings over the next decade. As The Associated Press reported, GOP leaders have insisted that Medicaid, the joint federal and state program that provides health coverage to people with limited income and resources, is not specifically being targeted for cuts.

However, there is no talk about cuts to the other big federal health care program, Medicare, which provides health coverage for seniors; and The AP reported that things like work requirements for Medicaid recipients and reductions in benefits or coverage could still be on the table.

“The current administration and Congress are giving serious consideration to cutting billions in funding for Medicaid, and every state should be alarmed,” said Brenda Sharpe, president and CEO of the REACH Healthcare Foundation, at a webinar on Tuesday to discuss the potential impact of cuts in Kansas.

REACH, along with the United Methodist Health Ministry Fund and consulting firm Manatt Health, recently studied the potential effects of Medicaid cuts on Kansans over the next decade, and they presented their findings at the webinar on Tuesday. It’s a problem with high stakes for Kansas, because Medicaid is the largest source of federal funding for the state, accounting for 15% of the state’s general fund spending and 46% of its federal funding expenditures.

Manatt’s report said that in fiscal year 2023, Kansas’ Medicaid system spent nearly $5.5 billion, with the federal government covering approximately two-thirds of that total.

Because Congress hasn’t produced a finished budget plan, Manatt’s estimates are more about the fallout from a number of individual cost-cutting measures than from a complete plan. While the possible cuts that Manatt examined take many forms, what they have in common is that they would be devastating to many of the most vulnerable people in Kansas, the advocates said.

“Cuts to Medicaid really mean cuts to services upon which many of our most vulnerable neighbors depend on, long-term care for seniors who’ve outlived (their) resources, children who need access to primary care and vaccines, and people with complex health conditions who will literally die early without adequate care,” Sharpe said. “Medicaid is not a perfect program, but it is an efficient and effective one at bridging critical access gaps in our state.”

One of the cuts examined by Manatt was a system of “per capita caps” — limits on how much federal funding can be provided for each Medicaid enrollee’s care.

Under the current Medicaid funding system, the federal and state governments split the costs of enrollees’ care, and there’s no limit on how much funding the federal government will match. But if Congress imposes a per capita cap, the federal government would only match state dollars for each patient’s care up to a certain point. Any expenses for that patient beyond the cap would have to be paid solely by the state.

Manatt’s models said that if Kansas’ Medicaid system wanted to fully replace the federal funding it would lose from a per capita cap system, it would have to increase its spending by $347 million over one year or $3.15 billion over a decade. If the state didn’t do that, it would likely lead to many Kansans losing their coverage and going into medical debt, and more hospitals facing financial strain.

Another change that’s been mentioned in Republicans’ budget talks has been work requirements for Medicaid recipients.

The report on Manatt’s models said Congress could choose to require non-elderly, non-disabled adults ages 18 to 65 to be employed in order to receive Medicaid. The danger here, it said, is that a work requirement would cause a drop in enrollment in a state where the Medicaid rolls are already thin.

While Kansas currently does not require Medicaid enrollees to work, the state is one of only 10 that haven’t expanded Medicaid under the Affordable Care Act, and it has some of the strictest income limits in the country. To estimate how the work requirements would affect enrollment, Manatt’s model used outcomes from states that had imposed their own work requirements already — Arkansas, New Hampshire and Georgia.

The model showed that over one year, enrollment in Kansas could fall by 5% to 9%, and over 10 years it could fall by 5% to 15%. Up to 57,000 Kansans, including around 2,800 children, could be affected.

Cindy Samuelson, senior vice president of the Kansas Hospital Association, said that when people lose their coverage, it’s not just a problem for them. Uninsured patients put tremendous strain on health care providers, and that in turn causes health care costs for everyone else — businesses, families and taxpayers — to go up.

“These kinds of cuts can also weaken Kansas’ workforce and economic growth by destabilizing our health care infrastructure,” Samuelson said. “As many of you may know, health care is one of Kansas’ largest industries and has a large economic impact to the state and Kansas communities.”

Some of the potential cuts would hit health care providers even more directly.

The report from Manatt talks about changes to the Medicaid State Directed Payment program, which allows states to direct payments to health care providers within Medicaid’s managed care system. Cuts to this program could decrease the total Medicaid funding for Kansas hospitals by up to $344 million over one year and up to $3.67 billion over 10 years.

“This is a 22% decline compared to expected total Medicaid hospital funding in Kansas under current law,” the report said.

None of these outcomes is certain to happen yet, as Cindy Mann, a partner with Manatt, emphasized. She said the budget resolution that Congress passed is just a first step. It basically allows committees for both the House and the Senate to begin writing bills that would turn the numbers in the resolution, like that $880 billion figure, into actual legislative proposals.

The House Energy and Commerce Committee is set to hold a “markup” — a public hearing to debate the legislation — during the week of May 7. But Mann pointed out that due to ongoing tensions over Medicaid cuts and the wide range of opinions in Congress, it’s unlikely a decision will be reached by the end of May.

No matter what happens, David Jordan, president and CEO of United Methodist Health Ministry Fund, said the state is going to have a lot of difficult decisions to make.

Jordan said 84 of the 122 hospitals in Kansas are operating at a financial loss, and any cuts to Medicaid are also cuts to hospital doctors and to the health of the community and the local economy.

“I think the big question is why we really need to stand firm and help policy makers in Kansas know that if they cut Medicaid, the cuts will impact all of us,” Jordan said. “And ultimately, we’ll end up paying more in taxes at the local level to find a way to try to sustain and offset some of the cuts.”

“I just really ask folks to continue to share how costly these cuts will be and urge our policy members to protect Medicaid, protect Kansans and protect providers in our communities,” Jordan said.