Majority leadership in the House of Representatives has proposed implementing substantial federal funding cuts that would affect the Medicaid program over the next 10 years. This paper is one in a series that assesses the potential impacts of different policies being considered for Medicaid. This report focuses on proposals considering the removal of the 50 percent floor on the federal medical assistance percentage (FMAP), which determines federal contributions to state Medicaid programs, and to reduce the 70 percent FMAP for the District of Columbia to 50 percent, which would upend a matching rate structure that has been in place for decades. We also assess the fiscal implications of these reductions in the FMAP, combined with the elimination of the 90 percent enhanced FMAP for adults made eligible for the Medicaid expansion under the Affordable Care Act.

Given the populations that Medicaid serves, cuts in federal Medicaid funding would place more of the responsibility on states for financing the care of millions of vulnerable people, including children, disabled and elderly people, and pregnant women. Because most states are required to balance their budgets, any decreases in the federal government’s contribution to state Medicaid costs will be met by increases in state taxes, reductions in spending on other state programs, or cuts to Medicaid eligibility, benefits, or provider payments.

In this paper, we estimate federal Medicaid funding declines and state budgetary impacts for 2026–35 in the 10 states (California, Colorado, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Washington, and Wyoming) that would be affected by eliminating the FMAP floor and in the District if its FMAP was reduced by 20 percentage points. We also consider the effects of these FMAP reductions in combination with a lowered FMAP for the Medicaid expansion population, which would affect DC and all these states except for Wyoming. Wyoming did not expand Medicaid under the Affordable Care Act. Our analysis uses state-specific data from MACPAC on spending for each of the five eligibility pathways (children, traditional nondisabled adults, nonelderly disabled, elderly ages 65 and older, and Medicaid expansion adults), trended forward for each eligibility pathway and state from 2026 to 2035 using Congressional Budget Office growth rate projections.

We find the following:

• The elimination of the FMAP floor and the reduction in the DC FMAP would result in drops in the FMAP, ranging from 2.1 percentage points in Maryland to 26.1 percentage points in Massachusetts.
• The FMAP cuts would lower federal funding for Medicaid in the 10 states and DC by $467.7 billion over 10 years.
• In the absence of increased state spending by these states, these FMAP changes would result in cuts of $50.1 billion for children, $67.1 billion for nondisabled and nonexpansion adults, $189.5 billion for disabled people, and $161.1 billion for the elderly.
• To maintain their current Medicaid programs in the face of these FMAP reductions, the 10 states and DC would have to increase their state spending each year on Medicaid, with increases ranging from 4.1 percent in Maryland to 51.3 percent in Massachusetts and 63.2 percent in DC.
• If the enhanced match for the Medicaid expansion were also to be eliminated, DC and the nine states that would be affected would face total cuts in federal contributions of $835.3 billion, with federal funding cuts ranging from 16.4 percent of Medicaid spending in Maryland to 53.0 percent in Connecticut.
• In 2026, state Medicaid spending would have to increase by between 21 percent in Maryland and by 66 and 83 percent in Connecticut and DC, respectively, to offset the loss in federal contributions if the FMAP floor were eliminated and the DC FMAP were reduced in combination with eliminating the enhanced expansion FMAP.

These policies represent an unprecedented change in the founding principles of the partnership between the federal government and states to finance the Medicaid program. Moreover, these polices explicitly shift the responsibility for financing health care for low-income and disabled people from the federal government to the states. The scale of the reduction in federal contributions to state Medicaid programs that would occur from these policies would likely result in changes to the Medicaid program that would diminish eligibility for the program, covered benefits, and access to care for children, pregnant women, disabled adults, the elderly, and others. Ultimately, the proposed policy changes would have negative health and financial consequences for low-income people and adverse economic consequences for providers and communities in these states and DC.