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WHY DO CUTS TO MEDICAID MATTER FOR AMERICANS OVER 65?  
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Jane Tavares; Marc Cohen
May 13, 2025
The Conversation
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_ We are gerontology researchers who study health and financial
well-being in later life. We’ve been analyzing what the potential
impacts of Medicaid cuts might be. _

Medicaid provides health insurance coverage for more than 82 million
Americans., FatCamera/E+ via Getty Images

 

Republicans in Congress intend to cut about US$880 billion in federal
health care spending
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One of their primary targets is Medicaid
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That government program covers 82 million Americans with health
insurance
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of the people enrolled in the program are low income, have
disabilities, or both.

Medicaid, jointly funded by the federal government and the states, is
also the biggest funder in the U.S.
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of long-term care services, whether they are delivered in the
patient’s home, another location where they spend part of their day
or a nursing home. That makes it particularly important for older
adults and those with disabilities. All states must meet the basic
federal guidelines
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for Medicaid coverage. But 41 states have opted
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take advantage of the Affordable Care Act provision that expanded
eligibility to cover more people under the program.

We are [[link removed]] gerontology
researchers [[link removed]] who study
health and financial well-being in later life. We’ve been analyzing
what the potential impacts of Medicaid cuts might be.

While the debate about how to reduce the budget focuses largely on
dollars and cents, we believe that cutting federal spending on
Medicaid would harm the health and well-being of millions of Americans
by reducing their access to care. In our view, it’s also likely that
any savings achieved in the short term would be smaller than the
long-term increase in health care costs born by the federal
government, the states and patients – including for many Americans
who are 65 and older.

Weak track record

Wary of backlash from their constituents, Republicans have agreed on a
strategy
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that would largely cut Medicaid spending
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in a roundabout way.

Previous efforts by the GOP in some states, such as imposing work
requirements
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for some people to get Medicaid benefits, have not greatly reduced
costs. That’s largely because there are relatively few people
enrolled in the Medicaid program
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who are physically able to be employed and aren’t already in the
workforce. Nor have past efforts to reduce fraud, waste and abuse
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led to significant savings.

According to widespread media reports, Republicans are considering
changes that would cut the amount of money that the federal government
reimburses states
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for what they spend on Medicaid
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In May 2025, the nonpartisan Congressional Budget Office estimated
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that 8.6 million Americans would lose their health insurance coverage
should the GOP proposal become law.

Historically, states have dealt with budget cuts
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by reducing their payments to health care providers, limiting
eligibility or restricting benefits. These reductions all particularly
affected home- and community-based services that many disabled and
older adults rely on.

About 3 in 4 of the people with Medicaid coverage
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who receive long-term care through the program get that care at home,
in their communities or both, rather than residing in a nursing home.
States save an estimated 26 cents for every dollar
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outside nursing homes.

Losing coverage can be harmful for your health

We recently analyzed data from a nationally representative study of
approximately 6,000 people who had Medicaid coverage but lost it when
they turned age 65
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because their income exceeded 100% of the federal poverty level
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In 2025, that cutoff is about $15,560 for a single person and $21,150
for a couple.

Medicaid income eligibility generally drops from 138% to 100%
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of the federal poverty level at age 65 once Medicare becomes a
person’s primary health insurer.

The people who participated in the study had lost their Medicaid
coverage upon turning 65 between 1998 and 2020. Our team followed the
experiences of these participants over a 10-year period starting at
age 65 to see how they fared compared with people who continue to be
enrolled in Medicaid after their 65th birthday.

What we found
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was both surprising and disturbing.

Fewer activities of daily living

Over the decade following that milestone, the people who lost their
Medicaid coverage had more chronic conditions and could perform fewer
activities of daily living
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getting dressed, without any assistance as compared with those who
still had Medicaid coverage. In addition, they were twice as likely to
experience depression and be in fair or poor health
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As people’s health worsened, they also went to the hospital more
often and stayed there longer. They also used outpatient surgery
services more frequently
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These services are particularly expensive for the health care system.
Depending on the service, it may also be costly for patients. Unlike
the comprehensive coverage of Medicaid, the Medicare program fully
covers [[link removed]] only
inpatient hospitalizations, short-term nursing facility care, hospice,
some short-term home care, annual wellness visits, vaccines and some
basic preventive care. Beyond that, Medicare requires the payment of
premiums to help with uncovered services that can also include
deductibles and copays.

This arrangement can lead to significant out-of-pocket costs
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that make health care hard for low-income older adults to afford
unless they have both Medicare and Medicaid coverage.

We also found that older people who lost Medicaid coverage were less
likely to see their primary care physician for routine and follow-up
care, despite being enrolled in Medicare. This explains in part why
they are going to the hospital more often, likely avoiding routine
health care that may incur out-of-pocket costs and eventually
utilizing Medicare-covered hospital care when needed.

In short, we found that exiting the Medicaid program upon turning 65
actually leads to an increase in the use of some of the most expensive
health care services, such as inpatient hospitalization and outpatient
surgery
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So although Medicaid may no longer pay for these costs, the rest of
the health care system does.

Just under 90% of older adults
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enrolled in Medicare have some kind of supplemental coverage that
helps them pay for services that the program doesn’t cover. For 16%
of the people with Medicare coverage, Medicaid
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covers those additional health care costs. The rest of that nearly 90%
obtain supplemental coverage from private insurance companies
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enrolled in a Medicare Advantage
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that’s run by a private company instead of the government.

However, 11% of Americans covered by Medicare
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don’t have any additional coverage. It is likely that those who lost
Medicaid benefits at age 65 may not be able to afford any other
supplemental coverage options and fall into this group.

People who lose Medicaid coverage may die sooner

One of our more troubling findings was that people who lost Medicaid
coverage at age 65 were 14% more likely to die within the next 10
years
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than were those who kept their coverage in addition to gaining
Medicare coverage. This was true even though the people who lost their
Medicaid access tended to start out in better health.

Roughly 12 million Americans are enrolled
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in both Medicare and Medicaid today. Much is at stake for them and
other low-income people as Congress considers making major changes to
the program to cut federal spending on it.

For some Americans, it’s a matter of life and death. For others,
it’s a matter of healthy versus unhealthy aging that leads to
costlier health care not just for themselves but for the U.S. as a
whole.

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* Medicaid; Federal Budget; Health Care; Aging;
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