Medicaid's $911 Billion Cut: Who Loses Coverage and When

Adrian McGonigal had a job at a chicken plant in Arkansas. He worked full time. He reported his hours, the way the new rule required. The state cut his Medicaid anyway, lost in the paperwork of a reporting system built to be hard to use.

Without coverage, his COPD medication cost about $800 a month. He could not pay it. His breathing collapsed, he missed work, and he lost the job that was supposed to keep him eligible.

He died of a heart attack before Thanksgiving 2024. He was one of 18,164 Arkansans who lost coverage in the seven months the state ran this experiment.

Arkansas opened coverage in 2014, tried to claw it back with work requirements in 2018, and a federal court struck them down in 2019. In 2025 Congress wrote the same idea into national law, set to take effect in January 2027, the same year it stripped the rule protecting nursing home residents.

A court struck down the Arkansas requirement in 2019, and a court could strike down this one. But first, who stands to lose, and why this reaches far past working-age adults.

Most people picture Medicaid as coverage for poor working-age adults. That is part of it. It is also the program that pays for your mother's memory care, nearly half of all births, and the hospital in your county seat.

The work requirement is not a red-state or blue-state policy. It takes effect January 1, 2027, in all 40 states and Washington, D.C., that expanded Medicaid. Four states are moving ahead of that deadline, from full enforcement in Nebraska and Montana to early compliance checks in Arkansas. Ten states never expanded at all, so their low-income adults have little coverage to lose and their rural hospitals are already the most strained.

The president and House leaders said repeatedly that they were not cutting Medicaid. The One Big Beautiful Bill cut $911 billion from it over ten years. Fact-checkers at KFF and The New York Times rated those denials false.

The largest single piece is the work requirement, the same policy that failed in Arkansas. The losses do not arrive all at once. They build year after year as each provision phases in.

Working-age adults must report at least 80 hours a month of work, job training, school, or volunteering to keep their coverage. Pregnant women, caregivers of young children, and people with disabilities are exempt. But Arkansas showed the catch. Those exemptions exist on paper, and people who qualify still lose coverage when a balky reporting system cannot confirm it.

The $911 billion is only what is already law. A proposed CMS rule would cap the extra payments states send to hospitals, adding hundreds of billions more, and its public comment window is open now.

The cuts are sold as a way to stop fraud. Speaker Johnson calls Medicaid "hugely problematic." The White House says most federal money lost to fraud comes from entitlement programs like it. The work requirement, the argument goes, will stop able-bodied adults from gaming the system.

The government's own data says otherwise. When investigators tally Medicaid fraud, patients are almost never the ones committing it.

The big "improper payment" numbers officials cite are not fraud either. More than 82% of improper payments are missing paperwork or skipped administrative steps, money that would be paid if the file were complete. A work requirement does nothing to catch the providers who actually steal. It only adds the paperwork that pushed Adrian off his coverage.

The cuts do not fall on one kind of person. They reach a working adult buried in paperwork, a small town losing its only hospital, and an elderly parent in a nursing home the program keeps open.

The working adult

Adrian McGonigal was not the exception. Nationwide, 92% of working-age adults on Medicaid are already working, caring for family, in school, or too sick to work.

Most people who lost coverage in Arkansas were working too, and simply could not keep up with a reporting system built to be hard to use. Employment did not rise. The only measurable result was lost insurance.

The rural town

In rural America, Medicaid is the hospital's largest source of revenue, because the patient mix is poorer. When coverage drops, the marginal hospital tips over. Mia Crump delivered her baby at St. Mary's Sacred Heart in Lavonia, Georgia, just before its labor and delivery unit closed. New mothers there now drive up to an hour and a half to Athens.

A rural hospital is usually the largest or second-largest employer in its county. Each job there generates about $200,000 a year in local spending, so when it closes, per-capita income drops 4% and unemployment rises. As one rural health leader put it, when you close a hospital, the community often follows.

The nursing home resident

For three brothers, this one is personal. Their mother lived in a small town in Kansas, one of the ten states that never expanded Medicaid. She was diagnosed with early-onset dementia at 66, and memory care ran about $6,000 a month. Her savings were gone in under two years.

Then Medicaid paid for the care that kept her safe until she died last October, at 69. Kansas refused to expand coverage for working adults, but the older, traditional Medicaid still caught her when the money ran out. That is the part most families never see coming. The diagnosis arrives, the savings vanish, and Medicaid is the only thing between a person and a hallway cot.

The budget reaches families like theirs anyway. About 579 nursing homes already sit at elevated risk of closing, and when rates drop, 58% of facilities say they will cut staff. More than 700,000 people are stuck on waiting lists for the home care that would let them avoid a nursing home in the first place.

Arkansas is not only the warning. It is also the proof that this can be stopped. In 2019, a federal judge struck down its work requirement in Gresham v. Azar, ruling that the government had ignored the coverage losses it would cause. Courts have blocked this exact policy before.

The fight is not settled. The $775 billion CMS payment rule is still in its public comment window, where ordinary people can weigh in. Governors still decide whether their state keeps expansion when the federal match falls. Congress can repeal the work requirement before it takes effect in 2027. Every one of those is a place to push.

1. Write your representative using the letter and call script below. It asks Congress to restore the federal match, repeal the work requirement that failed in Arkansas, and bring back the nursing home staffing rule, while we still find billions for war abroad. Text RESIST to 50409 to send it now.
2. Submit a public comment to CMS before the deadline on the state-directed payment cap rule that would cut another $775 billion from hospitals.
3. Call your governor's office. Governors decide whether their state keeps Medicaid expansion when the federal match drops.
4. Read the full Medicaid explainer and the Healthcare hub for state-specific context and more ways to act.