Warning Issued Over $500 Million Loss From Medicaid Cuts

Newsweek

17 hours ago

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Minnesota's Medicaid Director has warned that the state could lose $500 million in federal funding a year if President Donald Trump's "Big Beautiful Bill" is passed in Congress.
John Connolly said in a media briefing yesterday, as shared with Newsweek by the Department of Human Services, "the bill currently on the table is inefficient, ineffective, and fundamentally unfair."
Newsweek has contacted the White House via email for comment.
Why It Matters
President Trump's "Big Beautiful Bill" has sparked significant concern among some lawmakers, particularly over the subject of Medicaid. The tax bill would aim to cut around $600 billion from Medicaid, the federal program that provides health coverage to the country's most vulnerable, to enable the president to bring about $4.5 trillion in tax breaks.
The Congressional Budget Office has predicted that more than 10 million Americans could lose their health coverage if the bill is brought into law, and health experts and lawmakers have warned that this could result in worse health outcomes across the country and, over time, an increase in medical costs.
File photo: Thousands of protestors calling for a stop to the proposed cuts to Medicaid funding.
File photo: Thousands of protestors calling for a stop to the proposed cuts to Medicaid funding.
Katie Godowski/MediaPunch via AP
What To Know
Connolly said that hundreds of thousands of Minnesotans would lose their health coverage as a result, and that increases in medical debt could force some hospitals and clinics to close, leaving communities vulnerable.
Around 250,000 in the state could lose their coverage, according to KFF estimates, and the Commonwealth Fund estimated 9,300 jobs would be lost.
Connolly also pointed to the impact Trump's tax bill would have on family planning services in the state, as the legislation would provide no federal funding for them, alongside a $170 million cut for reproductive health services.
According to a fact sheet shared with Newsweek by the Minnesota Department of Human Services, eligibility checks for the Medicaid program would also take place every six months instead of annually, which the Department said would double the workload for "backlogged" counties, "setting them up to fail."
The Department added it "leads to enrollment churn where enrollees lose coverage as soon as their eligibility is reverified."
Connolly also warned that the cuts would impact not only those who lose their Medicaid coverage but everyone in the state, as the increase in constituents without health coverage would lead to a reduction in preventative care and, in turn, a worsening of health outcomes that would ramp up medical costs for all.
"If these cuts go forward, families will face impossible choices between caregiving and working, between food and medicine, and our hospitals, especially those in rural communities, will suffer and Minnesotans will fall through the cracks ultimately," Connolly said, according to the regional news outlet, InForum.
Alongside proposed cuts in funding to Medicaid, Minnesota would be among one of the states penalized by Trump's tax bill for states for providing health coverage to undocumented migrants.
The terms of the legislation would reduce the federal match rate for the Medicaid expansion under the Affordable Care Act (ACA) in states providing health care for undocumented migrants from 90 percent to 80 percent.
This would lead to a $330 million reduction in federal funding for the state, the Department of Human Services fact sheet reported.
However, Minnesota has recently passed a budget bill suspending MinnesotaCare coverage for undocumented migrants starting from 2026, which is currently waiting to be signed off by Governor Tim Walz.
What People Are Saying
John Connolly, Medicaid director and deputy commissioner at the Minnesota Department of Human Services, said in a media briefing yesterday, as shared with Newsweek by the Minnesota Department of Human Services: "[The bill] achieves its purported reductions by slashing federal Medicaid funding. But those reductions are actually a cost shift - to states, counties, Tribes, providers and people themselves who will have to pick up the expense of health care no longer covered and the cost of increased administrative burdens."
What Happens Next
Lawmakers in Congress will continue to deliberate over Trump's tax bill until the current scheduled deadline of July 4.