Democratic-leaning states will feel more of the impact of sweeping Medicaid cuts included in the One Big Beautiful Bill Act, according to a new analysis by Oxford Economics.
The report, authored by lead economist Barbara Denham, says that millions of Americans – regardless of where they live – will lose access to health insurance because of the tighter eligibility rules and new work requirements. Immigrants will be disproportionately affected, with many losing coverage under Medicaid, Medicare and the Children’s Health Insurance Program.
States such as California and New York – which have both expanded Medicaid and have large immigrant populations – are expected to be hit hardest. Other vulnerable states with large immigrant populations include Louisiana, Nevada, New Jersey, New Mexico and Washington, D.C.
“Federal funding cuts and the expiration of the Marketplace subsidies will have several economic consequences,” Denham wrote. “The number of newly uninsured will rise significantly, putting more at risk of worse long-term well-being, which will sap productivity growth”
States with the highest percentage of residents enrolled in Medicaid
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The new law limits federal matching funds for noncitizens’ medical care, shifting the financial burden to state governments and hospitals. That’s particularly concerning for states with high percentages of foreign-born residents, many of whom rely on Medicaid.
The federal cuts to Medicaid funding come at a time when states are looking to trim their spending, too. The Kaiser Family Foundation recently reported California has paused enrolling new immigrants in its health coverage program while Illinois has stopped state-funded health benefits for all immigrant adults between 42 to 64. States such as Idaho and Tennessee also enacted legislation limiting immigrant access to state health care benefits.
States with the highest percentage of foreign-born residents
Since 2012, 40 states and the District of Columbia have expanded Medicaid under federal initiatives. But with the expiration of marketplace subsidies and new restrictions on immigrant coverage, a handful of states now face the steepest declines in federal health care funding.
Based on Oxford Economics’ analysis of Congressional Budget Office and KFF data, more left-leaning states will lose more money per resident as the new law rolls out, but right-leaning Louisiana stands to lose the most ($5,855 per resident) of any state. Alabama, Florida, Georgia, South Carolina and Wyoming – states that didn’t expand their Medicaid benefits – will see some of the smallest cuts.
How much Medicaid funding each state is projected to lose per resident
Some states have passed laws to buffer their residents or their budgets against federal cuts. For example:
◾ Their residents: New York, Missouri, Oklahoma, and South Dakota require coverage for adults earning up to 138% of the federal poverty line.
◾ Their budgets: Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah and Virginia tie Medicaid spending to federal funding levels.