Medicaid insures 1 in 4 Delawareans. If federal funds are cut, here’s the impacted

A proposed budget resolution passed by the Republican-led U.S. House in February calls for $2 trillion in federal spending reductions. Among those cuts, $880 billion would come from programs overseen by the House Committee on Energy and Commerce, which manages Medicare, Medicaid and the Children’s Health Insurance Program or CHIP.

Delaware’s Medicaid program is funded through a combination of federal and state resources, with the federal government covering approximately 60% of the total costs. In 2014, Delaware expanded Medicaid and now includes adults under 65 with incomes up to 133% of the federal poverty level. Under the expansion, the federal contribution increases to 90%.

If federal funding is reduced, Delaware could face an estimated $200 million loss in Medicaid funding, which may force the state to either reallocate funds or cut coverage, according to U.S. Rep. Sarah McBride. More than 300,000 residents — nearly one in four people in the state — qualify for Medicaid health coverage.

Who would be affected?

Medicaid is a significant part of Delaware’s healthcare system, providing access to essential healthcare services, including doctor visits, hospital care and prescription medications for thousands of qualified residents. In 2023, the Senate Committee on Aging released a fact-sheet documenting who would be disproportionately impacted by Medicaid cuts. Nonelderly adults with disabilities, communities of color and Medicare beneficiaries are at biggest risk for loss of coverage, according to the report. Eligibility requirements vary by program, but expected spending reductions could impact the health care safety net for key groups in Delaware, including:

• Low-income children: Nearly 43% of Delaware’s children rely on Medicaid or CHIP for health care.
• Pregnant women: Nearly 37% of births in Delaware are covered by Medicaid. Eligible mothers can receive care for up to 12 months postpartum.
• Low-income adults under 65: Under Medicaid expansion 58% of adults of color are eligible for coverage in Delaware
• Seniors and individuals with disabilities: Medicaid covers nursing home care, home health services and other essential needs. 63% of Delaware nursing home residents depend on Medicaid.

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If the proposed cuts take effect, as many as 41,000 Delawareans could lose health coverage, according to a study by the Urban Institute and the Robert Wood Johnson Foundation.

A separate report by the nonprofits, shows the impact would extend beyond Medicaid recipients. An analysis, also conducted by the Urban Institute, found that a decline in health care coverage could lead to increased costs from higher levels of uncompensated care putting financial strain on hospitals.

For more information about programs and eligibility, visit Delaware’s Division of Medicaid and Medical Assistance Frequently Asked Questions webpage.

You can contact Anitra Johnson at ajohnson@delawareonline.com.