Senate Approves Harmful Cuts to Medicaid, Food Aid in Revised Budget Bill

The bill would also require states to pay significantly more for SNAP benefits, which historically has been fully funded by the federal government. 

After a previous version of the bill was rejected by the Senate parliamentarian, the bill included a provision requiring states with error rates of 6 percent or higher to pay between 5 and 15 percent of SNAP benefit costs. In some states, that could cost states billions of dollars on top of additional administrative costs to run the program.  

The Senate bill gives states more time before their cost-share would be calculated, permitting them to use error rates from fiscal 2025 or 2026 as the basis of their payment. They would then begin paying under this new model in 2028.  

“To manage these new costs, states may be forced to restrict eligibility, limit benefits, or withdraw from the program entirely, which would make it more difficult for eligible individuals to access food assistance,” LeaMond wrote. 

The bill also cuts funding for the SNAP-Education program, which works with states and local organizations to provide nutrition education in lower-income communities.

Medicaid funding and eligibility at stake 

Similarly, the Senate seeks to slash funding for Medicaid, a federally regulated program that provides health insurance to more than 17 million low-income Americans age 50 and older. 

The bill would impose broad new work requirements on enrollees ages 19 to 64, requiring them to work or volunteer at least 80 hours a month to obtain and keep eligibility, with exceptions for disabilities and other circumstances.  

More than 9 million Medicaid enrollees would likely be subject to the work requirements, according to research by the AARP Public Policy Institute. Those who fall short of the new standards could also risk losing Affordable Care Act premium tax credits that go toward paying insurance premiums.  

“This creates a steep coverage cliff for those in their 50s and early 60s — particularly for those nearing retirement or working part-time — who may be left with no affordable coverage option at all,” LeaMond wrote.   

Plans to pull federal funding from Medicaid would also leave states with difficult trade-offs to offset increased costs. Currently, states participate voluntarily in Medicaid, and the federal government pays a percentage of the cost.  

One way states pay for Medicaid is through general funds and taxes on hospitals, nursing homes and other providers, but the Senate proposal would restrict this ability. It would also limit retroactive coverage, though not as severely as the House version would.

“By limiting how states fund their Medicaid programs, the bill threatens health care access, particularly for people in rural and underserved areas and through safety-net providers,” LeaMond wrote.  

In addition, the budget bill prevents attempts to streamline the Medicare Savings Program, which is used by Medicaid-Medicare beneficiaries to pay for premiums, deductibles and copayments for Part A and Part B.  

The Senate bill blocks new staffing standards in nursing homes that receive funding through Medicaid and Medicare.  

Last May, the Department of Health and Human Services sought to increase minimum staffing levels for nursing homes to ensure adequate care for residents, especially after the COVID-19 pandemic put extraordinary strain on frontline health workers.  

“These bare-minimum nursing home standards are estimated to save nearly 13,000 lives each year,” LeaMond wrote in her letter. “Delaying these long-overdue protections for people in nursing homes will perpetuate unsafe conditions in many facilities across the country.” 

AARP also raised concerns about potential language that allows certain prescription drugs that treat fewer than 200,000 people to circumvent Medicare’s price negotiation.