At a glance:
- Proposed Medicaid cuts could affect over 400,000 Mainers, especially children, older adults, and families with low income, reducing access to essential health care and economic stability
- Medicaid cuts could lead to job losses in health care, strain rural hospitals, and increase insurance costs for all Mainers, while the wealthiest Americans benefit from tax breaks
- Congress should oppose Medicaid cuts — Medicaid is a vital investment in Maine’s economic and public health future
New estimates from the Economic Policy Institute (EPI) highlight the dangerous consequences of the Congressional House Republicans’ plan to cut Medicaid in order to fund tax breaks for the wealthiest Americans. This plan, if enacted, would disproportionately harm families with low- and middle-income in Maine as Medicaid plays a critical role in ensuring access to health care and economic stability.
Medicaid (MaineCare) is a joint state and federal program that provides health insurance coverage to many children, older Mainers, people with disabilities, and families with low income. Over 400,000 Mainers — more than a quarter of the state’s population — receive health coverage through Medicaid. These proposed federal cuts would translate into billions in lost funding nationwide, with Maine facing deep reductions that could leave thousands without coverage.
According to new estimates from the Economic Policy Institute, on average, the bottom 40% of earners in every state would see an income reduction from Medicaid cuts, as they would not benefit enough from any extension of the 2017 Tax Cuts and Jobs Act (TCJA) to outweigh the value of the health care they lose. Instead, they’d be forced to pay out of pocket for medical care or go without necessary treatments.
On average, Maine households making less than $58,429 — the bottom 40% in terms of income — would see a net loss in income if Congress were to pass the proposed Medicaid cuts and extend the TCJA. Specifically, EPI estimates that if there were a 10.7% cut to Medicaid, the bottom 20% of earners in Maine (with an average income of $19,054) would experience an income reduction of approximately 6.7%, while those in the second-lowest 20% (with an average income of $43,673) could see their incomes drop by around 1.6% due to the loss of Medicaid benefits. Even when potential low-income tax cuts of a TCJA extension are added back in, the bottom 20% of earners still see a 6.3% income cut, and the next 20% don’t quite break even.
Beyond the harmful human impact, these cuts could destabilize Maine’s economy as well as the economy nationwide. Medicaid expansion in Maine has strengthened rural hospitals, created health care jobs, and injected millions into local economies. Slashing Medicaid funding would reverse these gains, straining hospitals — especially in rural areas— and leading to job losses in the health care sector. Furthermore, uncompensated care costs would rise, forcing hospitals and providers to shift costs onto insured patients, increasing premiums for all Mainers.
While working-class Mainers stand to lose the most, the primary beneficiaries of the House GOP plan would be the wealthiest Americans, who would receive substantial tax breaks. The top 1% in terms of household earnings nationally would see a 3.9% increase in their income as a result of extending the TCJA. Since high income and wealthy people are not eligible for Medicaid, they would not feel the impact of cuts to that program directly, though the broader economic impacts of a sicker and poorer population would almost certainly be felt by everyone.
Maine Center for Economic Policy urges Maine’s congressional delegation to stand firm against any proposal that threatens Medicaid funding. Policymakers should focus on strengthening access to health care, not dismantling programs that support families, workers, and the state’s economy.
Medicaid is a lifeline for Maine families and an investment in the state’s economic future. Cutting it to fund tax breaks for the wealthy is not only unfair — it’s dangerous policy. Mainers deserve better.
