Slashing Medicaid will unleash a chain reaction of increasing costs across our healthcare system.

As a nonprofit community mental health center, WellPower exists to serve a wide range of people across Denver. At the core of our focus is service to people who are Medicaid members. Current proposals to gut Medicaid by up to $880 billion will jeopardize healthcare coverage for an estimated 15 million people – people who are fighting cancer, seniors in nursing homes, children in low-income families, military veterans, people with disabilities and many more.

If that’s not enough cause for concern, there is another looming impact of sudden, reckless cuts to the program that covers 80 million Americans – that’s 21% of the total U.S. population – cutting Medicaid will increase costs across our healthcare system. This blog post explores how reducing Medicaid funding will trigger a vicious domino effect on healthcare costs, access and economic stability, ultimately burdening our country rather than relieving it.

Medicaid and Its Role in the Healthcare Ecosystem

Medicaid offers a safety net for some of the most vulnerable populations across the country, including children, senior citizens, individuals with disabilities and low-income families. More than one-fifth of the US population is covered by Medicaid and CHIP (coverage for children), and 41% of all births are paid for by the program. By covering essential services such as hospital stays, prescription medications and long-term care, Medicaid ensures millions of Americans receive preventative care, timely treatments and chronic disease management. Its presence in the healthcare system helps mitigate the need for costly emergency care while reducing overall healthcare expenditures.

Medicaid Cuts Could Increase Emergency Visits

One of the most immediate consequences of Medicaid cuts is the rise in emergency room visits for non-emergency conditions. It’s well-established that people who don’t have insurance and who are unable to afford regular check-ups often skip needed care until an illness becomes an emergency. This makes sense – if you aren’t able to afford expensive medical care out of pocket, when you get sick it’s likely you would try to manage it on your own. Sometimes this works; sometimes your illness will worsen to the point of becoming an emergency that may have been avoided with affordable routine care.

Consider, for example, diabetes management: Medicaid helps individuals afford insulin and regular check-ups, preventing complications such as kidney failure or amputations, which require expensive surgical procedures and emergency room visits. Emergency care is significantly more expensive than preventative care, and hospitals are prevented not only by professional ethics but by law from turning people away based on their ability to pay. Without insurance covering the cost of this care, hospitals are left with more (and more expensive) unpaid bills.

Medicaid Cuts Could Cause Higher Insurance Premiums

When hospitals and healthcare facilities face increases in uncompensated care due to unpaid bills from uninsured patients, many providers shift these costs to private insurers through a practice known as cost shifting. Insurers, in turn, increase premiums for their policyholders to offset these expenses. This creates a cycle where Medicaid cuts indirectly affect middle-class and affluent families who may otherwise think they are insulated from the consequences. As premiums rise, healthcare becomes less affordable, leading to further reductions in access and coverage across various socioeconomic groups. When people are kicked off their healthcare coverage, we all pay for it.

Medicaid Cuts will Strain State Budgets

In addition to the impacts on families and individuals with commercial insurance, Medicaid cuts will add unnecessary burdens to strained state finances. Medicaid operates as a federal-state partnership, meaning states contribute significant funding alongside federal dollars. When federal Medicaid funding is reduced such as what will happen under one current proposal, states need to fill the gap. Many states like Colorado will be forced to look at cutting services, limiting eligibility or raising taxes to fill the gap left by increases in uncompensated care. This financial strain on state budgets can lead to broader economic challenges, including reduced investments in education, infrastructure and other public services—all of which indirectly affect the cost of living and economic stability for residents.

Medicaid Cuts will Impact Employers and Small Businesses

In addition to the ripple effects of premium increases on the ability of small businesses to afford health coverage for their employees, cuts to Medicaid will impact the workforce itself. Medicaid serves as a vital support system for low-income workers, enabling them to manage health challenges while remaining productive members of the workforce. When Medicaid funding is reduced, these workers face increased absenteeism, reduced productivity and, in severe cases, job loss due to health-related issues. It’s hard to work when you have unmanaged health needs. The cumulative effect is a less stable workforce, which can hinder economic growth and innovation.

The Human Impact of Cutting Medicaid

As we’ve talked about before, cutting Medicaid will endanger the health of real people who depend on the program for their care. People like Jahmon, Kitty, Rob and thousands of other remarkable individuals and families WellPower serves each year will be at risk of having their healthcare taken away – of not being able to get help when they need it.

Imagine the suffering caused by removing 15 million people from their healthcare. For reference, the population of Colorado is currently just under 6 million people. The scale of 2.5 Colorados (or the combined population of Idaho, Montana, Utah, Wyoming, Colorado and New Mexico) suddenly losing health insurance is staggering. Meanwhile, the actual sources of fraud, waste, abuse and administrative inefficiency will remain entirely intact.

Wrap Up: The False Economy of Cutting Medicaid

While gutting Medicaid may initially seem like a fiscally prudent decision because of immediate reductions to the federal bottom line, the long-term consequences tell a different story. Cuts to Medicaid will lead to higher healthcare costs for everyone, whether through cuts to other state programs, increasing taxes, rising insurance premiums, or even broader economic strain. Rather than viewing Medicaid as an expense to be cut, policymakers should recognize it as a vital investment in the health and prosperity of the nation. Protecting Medicaid is not just about safeguarding low-income individuals; it is about ensuring that the entire healthcare system operates efficiently, equitably and economically for the benefit of all Americans.

How to Help Protect Medicaid

If you recognize the importance of keeping Medicaid intact, you can make a real difference. How? As we speak, our elected leaders in Congress are working through the budgeting process, which will likely have impacts on Medicaid funding. This means it’s the perfect time to contact your U.S. senators and representative and tell them not to gut Medicaid. It’s just too important.