What You Should Know
- An estimated 1.3 million residents in New York could find themselves losing health insurance over the next decade, based on insights from Gov. Kathy Hochul.
- Medicaid is projected to face cuts of about 1 trillion dollars in the coming ten years due to President Trump’s new tax laws. As part of these changes, adults may need to verify their employment status every six months, proving they are working 80 hours each month through jobs or community service.
- It’s possible that many people aren’t aware that their health programs fall under Medicaid, which might put them at risk of losing coverage. Millions of Americans may not even realize they are in federally funded Medicaid programs, especially as national brands’ health programs become more disrupted.
- Most Medicaid recipients actually receive care through private companies, which can lead to confusion.
- Historical patterns show that Medicaid enrollment has often been underreported, revealing a significant gap in awareness. Government data indicated about 78.5 million people were in Medicaid in 2023, while another source reported only 62.7 million in the same year.
With impending federal cuts, up to 1.3 million New Yorkers could see their Medicaid coverage disappear over the next ten years, as warned by Gov. Hochul. Many individuals might not even recognize that a large part of their health coverage is funded through Medicaid, which puts them at risk.
As of May, 65% of New York’s Medicaid beneficiaries were enrolled in managed care plans, according to the state’s Department of Health. These plans are often managed by private companies, and patients usually don’t realize they are also on government-funded Medicaid. To illustrate, Fidelis Care, a popular managed care plan in New York, serves approximately 1.8 million residents but is privately operated.
Across the country, 40 states and DC have arrangements with managed care organizations to oversee Medicaid programs. This means many patients may not recognize that their so-called private plans are, in fact, Medicaid programs.
These managed care plans are affected by the 1 trillion dollars in anticipated cuts to federal healthcare programs over the next decade stemming from President Trump’s tax initiative, commonly referred to as the “big beautiful bill.” Recipients of these plans will need to meet new work requirements.
In New York, about 6.9 million people are enrolled in Medicaid.
This situation raises concerns about misunderstandings regarding the 71 million individuals in Medicaid and another 7 million in the Children’s Health Insurance Program (CHIP) nationally. Other states have names for their Medicaid programs that sound more user-friendly, leading to potential confusion. Names like Husky Health in Connecticut or Badger Care Plus in Wisconsin can mislead individuals into thinking they’re not using Medicaid.
There’s definitely a potential problem here. Anecdotal evidence suggests that people who are aware of the new work requirements often don’t connect them to their own situations. They might say, “I don’t use Medicaid; I’m on Badger Care” in Wisconsin, for instance.
Pamela Flock, Professor of Social Policy
The tax changes implemented last month, which Trump signed on July 4, could affect nearly 12 million people enrolled in programs, including Medicaid, Obamacare, and CHIP.
As the largest health program in the United States, Medicaid provides crucial insurance for low-income individuals, including those with disabilities, pregnant women, and seniors. Major changes won’t take effect until 2027, coinciding with upcoming midterm elections.
Why Do Medicaid-Funded Programs Have So Many Names?
There’s a rationale behind the use of familiar names in Medicaid-funded programs: it’s a strategy aimed at alleviating the stigma associated with federal support.
There’s an irony to it; in trying to make these programs seem more like regular health insurance, as opposed to welfare, they inadvertently create confusion, as noted by experts.
Unique brand names help consumers navigate the often overcrowded health ecosystem, according to researcher Colin Planalp. If someone moves between states, they might find that Medicaid operates under different titles, which can help clarify that rules may change.
However, these names can also obscure the link between state programs and federal policies, which could complicate matters further. Dr. Benjamin Somers from Harvard Chan Public Health cautioned that if people aren’t aware their health insurance is tied to Medicaid, it might lead to difficulties in meeting new reporting requirements for work activities.
If patients are unaware their plans are part of Medicaid, they may struggle to recognize the need to comply with new requirements.
Dr. Benjamin Somers, Professor of Healthcare Economics
The state-specific names can lead to more confusion, potentially causing people to underestimate their risk of losing coverage.
Historically, there’s been an issue with underreported Medicaid registration, going back decades.
Currently, about 27.8% of the U.S. population is registered with Medicaid. Some studies indicate that a significant number of these individuals don’t even realize it.
As of December 2023, Medicaid records show there were approximately 78.5 million people in the program, according to the U.S. Census Bureau. The discrepancy between those registered and what’s reported is known as the “Medicaid undercount.” This suggests a substantial number of individuals lack awareness of their Medicaid status.
Moreover, 75% of Medicaid beneficiaries are enrolled with managed care organizations that have contracts with state governments for care management.
A substantial portion of Medicaid plans is managed by large Fortune 500 companies, with many beneficiaries interacting more with these private entities than with their state’s institutions. Somers mentioned that individuals often mistakenly believe they’re just dealing with these private companies and are unaware of their Medicaid enrollment.
Managed Care Organizations Oversee Most of Medicaid
For many patients in managed care, understanding the funding source for their insurance can be quite confusing. In fact, the federal government covers a significant share of Medicaid costs—about 69% in 2023—while states contribute around 31%.
Impending Medicaid cuts will add more pressure on states to sustain these crucial programs. Just because patients may not realize they are on Medicaid doesn’t mean they won’t be affected. Without new coverage options, many could end up uninsured.
The revised requirements necessitate that adults aged 19 to 64 verify their employment status twice a year. They must show they are working at least 80 hours monthly or are engaged in schooling or community service.
Republicans argue these changes aim to eliminate inefficiencies and redirect resources toward vulnerable populations such as pregnant women and children. The Affordable Care Act has led to 40 states and the District of Columbia expanding Medicaid for additional low-income adults.
Critics contend that these new criteria could unfairly target those eligible, making it harder for them to provide necessary documentation.
Somers warns that there’s not much room left to cut from Medicaid, which is already a cost-effective program that pays providers less than Medicare or private insurers.
Ahead of these nationwide changes, several states introduced their own work requirements, similar to those applied in Arkansas, and thousands lost their coverage without significantly boosting employment figures, according to researchers.
Nearly 95% of those affected were already working, managing disabilities, or caring for families—conditions limiting their capacity to secure steady employment.
Somers likens the forthcoming requirements to filing state taxes twice each year instead of once, emphasizing the added burden on individuals. If they are unclear about the rules, or if they lack the necessary documents, they may potentially lose their coverage amidst their busy and stressful lives.
