Whitmer releases key findings as DHHS preps final report on impacts of federal Medicaid cuts

After signing an executive directive in April requesting the Michigan Department of Health and Human Services examine how the state would be impacted by federal cuts to Medicaid, Michigan Gov. Gretchen Whitmer has released the department’s key findings, with the full report to follow in the coming days.

Among the impacts, according to the report, would be nearly three-quarters of a million Michigan residents losing coverage, coupled with the loss of billions of dollars for the state’s hospitals and nursing homes.

“Medicaid provides a lifeline to 2.6 million Michiganders, and the huge, proposed cuts will terminate coverage for our neighbors, family, and friends who need it most,” Whitmer said in a statement. 

With U.S. House Republicans adopting their budget resolution on April 10, the chamber has instructed members of the House Energy and Commerce Committee, which oversees Medicaid, to cut at least $880 billion, as they seek to free up funding for President Donald Trump’s plan to extend his 2017 tax cuts. A number of Democratic leaders and health advocacy groups have warned that cuts to Medicaid funding or programs could bring significant harm to low-income individuals who rely on the program for healthcare coverage.

“More than 700,000 Michiganders including people fighting cancer, seniors in nursing homes, new moms, veterans, kids, and those living with disabilities could lose their health care,” said Whitmer. “Michiganders will suffer because these proposed cuts go too far, too fast, and everyone, including those not on Medicaid, will end up paying more for their insurance. Republicans in Congress cannot let this happen.”

The DHHS report examines the impact of four proposals floated by members of Congress, and their impacts on Michiganders. 

As Medicaid is jointly funded by both the state and the federal government, the report found that if Congress reduces the federal match rates for the program, more than 700,000 Michiganders — roughly 30% of the state’s Medicaid beneficiaries—  would lose their coverage due to a loss of $1.1 billion in annual funding.

Michigan’s Medicaid budget for fiscal year 2025 is about $27.8 billion with roughly 70% coming from the federal government.

Imposing work requirements for Medicaid recipients to keep their coverage would cost taxpayers an additional $75 million to $155 million per year to institute a reporting program to ensure recipients meet these conditions. 

Limiting the use of taxes on health care providers — which states use to pay into their health system through payments for Medicaid services — would lead to a $2.3 billion decrease in payments to Michigan hospitals and a decreased upwards of $325 million in payments to nursing homes.

Plans to convert federal Medicaid funding into a block grant or a per-capita cap system, where the federal government will cover costs up to a pre-set amount, would result in the loss of $4.1 billion to $13.4 billion over the next decade. 

“These cuts will impact health care services for all Michigan families – whether they have Medicaid or commercial insurance – and small town and rural communities are likely to be disproportionally affected,” DHHS Director Elizabeth Hertel said in a statement. 

“Medicaid patients make up an average of 22% of hospital patient volume and the loss of funding under these proposals will cause rural hospital closures and loss of providers. Studies show a lack of access to health care can lead to higher mortality rates, worse health outcomes, increased health disparities and strain the state’s emergency care system,” Hertel said.

Whitmer’s office also stressed the importance of Medicaid in supporting Michigan’s health care industry, which has a $77 billion annual economic impact. The state’s Medicaid expansion, which took effect in 2014, created more than 30,000 jobs. Should Republicans pass cuts to Medicaid, Whitmer’s office said the state could lose out on half a billion dollars in annual Medicaid funding, threatening thousands of jobs.