Medicaid Cuts Jeopardize Veterans’ Healthcare

Washington, DCMany veterans and their families fall outside the VA health system because of VA eligibility restrictions, geographic barriers or other administrative challenges. Even those with VA coverage may depend on some combination of VA coverage, Medicare and Medicaid, particularly as they age and health needs increase.

Medicaid Cuts Jeopardize Veterans’ Healthcare Medicaid helps close the gaps, especially for those who are low-income, have disabilities or are ineligible for other health coverage.

But the Medicaid cuts included in H.R.1, the so-called “One Big, Beautiful Bill” Act, may threaten those services. Without Medicaid, veterans and their families may find that mental health, substance abuse, preventive care, chronic disease management and in-home services are simply unaffordable or unavailable.

Medicaid cuts

The cuts roll out slowly, cutting federal funding for Medicaid by 15 percent, or $1 trillion, over 10 years. The Congressional Budget Office estimates that these cuts will ultimately result in:

11.8 million individuals directly losing their health insurance coverage under Medicaid;
an additional 3.1 million losing Medicaid coverage under ACA marketplace plans;
another 4.2 million covered under marketplace plans would become uninsured with the expiration later in 2025 of the expanded premium tax credits for purchasing the plans. The plans will simply become unaffordable.

According to the American Psychological Association (APA), the fallout from this last requirement represents the largest component of the cuts, totaling $325.8 billion over 10 years.

Five basic facts about the impact of the cuts – what the numbers say

Medicaid provides health care coverage to 1 in 10 veterans (1.6 million people). For some, it is their only source of coverage, especially if they do not qualify for VA health care or TRICARE. A recent study by KFF provides statistical support for five important, and perhaps underappreciated, facts about veterans and Medicaid:

First, the percentage of veterans who depend on Medicaid, either in whole or in part, has increased over the past decade. As the veteran population changes, so too have the pathways to coverage. The Affordable Care Act created a new avenue for veterans who might otherwise have been uninsured. It expands Medicaid eligibility to nearly all adults with incomes up to 138 percent of the Federal Poverty Level ($21,597 for an individual in 2025). Forty-one states, including DC, have adopted Medicaid expansion, and nearly seven in ten veterans ages 19 and older who have Medicaid coverage live in a state that has expanded Medicaid.

Second, Medicaid often supplements coverage for older vets. Many of today’s veterans served during the Vietnam and Gulf Wars. Medicaid often supplements other types of insurance by covering services that other payers may not, such as long-term care. For veterans who are enrolled in Medicare and Medicaid, Medicaid can help cover premiums and cost- sharing responsibilities, reducing out-of-pocket costs for services like doctor visits, hospital stays, and prescription drugs.

Third, veterans with disabilities are more likely to rely on Medicaid than those who do not have disabilities. Age and disability often go hand-in hand. For vets from 50 to 64, slightly more than half of Medicaid enrollees report having a disability. Veterans 65 and older who have Medicaid coverage report a disability rate of 55 percent.

Fourth, Medicaid supports regular access to care for veterans who have high rates of chronic conditions and complex health needs.
In insurance-speak, “chronic conditions” means long-lasting illnesses or injuries like arthritis, diabetes or certain respiratory diseases. In the same strange legal language, “complex health needs” might mean PTSD, traumatic brain injuries, and chronic pain, as well as respiratory conditions, cancers, and other illnesses linked to burn pits, Agent Orange, and other hazards.

All veterans have high rates of chronic conditions and many, including older vets, have complex and layered health needs. Among veterans covered by Medicaid, 41 percent received mental health or substance use treatment in the past year.

What’s next?

Because the cuts roll out slowly, Congress may still intervene to lessen the blow to veterans. But, at present, the situation does not look rosy for elderly and disabled veterans, who are among the most vulnerable.