MEDICAID: A LIFELINE FOR PEOPLE WITH DISABILITIES!
Millions of children and adults with disabilities rely on Medicaid for the support they need to live in their communities and their health care coverage.
Medicaid is underfunded and does not meet the current needs of people with disabilities and their families. When services are funded, people with disabilities have the necessary help to get out of bed in the morning, take their medications, get to work, and participate in their communities. Almost 711,000 people with disabilities nationwide are on waiting lists for services they are eligible to receive. The program must be strengthened, not reduced.
WHY IS MEDICAID AT RISK IN 2025?
Congress and the Trump Administration have proposed $2 trillion in overall spending cuts through 2034. The current House proposal directs the Energy and Commerce Committee to identify at least $880 billion in cuts over the next 10 years, primarily targeting Medicaid. These cuts will jeopardize essential services for people with IDD. The stakes for people with disabilities could not be higher.
Possible Medicaid Cuts:
- Work requirements – More paperwork and proof of disability, making it harder to stay covered.
- Limits on provider taxes – Reducing state funding options.
- Block grants or per capita caps – Failing to account for population growth and need.
- Eliminating Medicaid expansion – Cutting coverage for low-income individuals.
- Changes to federal funding – Giving states less money to run Medicaid.
If federal funding is cut, states may have to raise taxes, shift funds, or reduce Medicaid services—leading to waitlists, lower provider payments, and fewer support hours. Medicaid is already underfunded, leaving 710,000 people on waitlists for essential services—some for over a decade. Many remain in institutions, and direct support workers earn low wages, causing high turnover rates (around 40%).
Why This Matters:
Instead of strengthening Medicaid by improving services and wages, many proposals aim to cut it. Millions of people with disabilities rely on Medicaid to live independently in their communities. Protecting and expanding Medicaid requires collective action—our voices matter.
What Medicaid Cuts Mean for People with Disabilities:
- Loss of Essential Care: Medicaid covers almost 50% of all U.S. children with disabilities, providing critical medical services like therapies and specialized care. Cuts would strip access to these services, hindering their development and well-being.
- Disrupted Early Intervention: Medicaid funds early intervention programs that help kids with disabilities reach key developmental milestones. Cuts could delay or deny these programs, leaving children behind and struggling to catch up.
- Financial Strain on Families: Without Medicaid, families would face higher out-of-pocket costs for necessary treatments, creating a severe financial burden.
- Increased Risk of Institutionalization: Medicaid supports home and community-based services, allowing children to live with their families. Cuts could force more children into institutions, stripping away the care and support they need to thrive at home.
- Worsened Health Outcomes: With 6 million adults with disabilities relying on Medicaid, cuts would reduce access to vital services—physical therapy, medications, and medical equipment—leading to worsening health conditions.
- Increased Financial Strain: Medicaid provides affordable care for many adults with disabilities. Cuts would force individuals to pay out-of-pocket, creating financial hardship and risking untreated or delayed medical care.
- Threat to Independence: Medicaid funds essential long-term services, like in-home care and assisted living. Cuts would limit access to these services, increasing the risk of institutionalization and undermining independence.
- Loss of Job Training and Support: Medicaid funds vital programs that help workers with disabilities access job training, transportation, and social services. Cuts could limit opportunities for employment and independence.
- Increased Job Instability: Many workers rely on Medicaid for critical support, such as transportation, personal care, and medical devices. Reductions could jeopardize their ability to maintain or advance in employment.
- Disincentive to Work: Medicaid cuts could create a "benefits cliff," where workers risk losing coverage as their income rises, discouraging career growth and full-time employment due to the loss of essential health care.
- Reduced Access to Life-Saving Care: Cuts would limit funding for critical services like specialized treatments, therapies, and home health care, leading to delays or loss of essential support for those with complex conditions.
- Higher Out-of-Pocket Costs: With fewer resources, people may face skyrocketing costs for medications, equipment, and specialist visits, making essential care unaffordable.
- Limited Long-Term Care Access: Cuts would further limit already scarce long-term care options, including nursing homes, personal aides, and respite care—vital services for those with severe disabilities or chronic illnesses.
- Greater Burden on Family Caregivers: Without Medicaid, families will bear more financial and emotional strain, lacking the support they need to care for their loved ones. Families often already don’t have the support they need—this would worsen this crisis.
- Worsened Health and Higher Risk of Death: Reduced coverage would disrupt routine care and preventative services, leading to more hospitalizations, ER visits, and untreated health complications, ultimately increasing the risk of death.
CONTACT AND MEET WITH YOUR LEGISLATORS
We need your support in this effort to protect Medicaid and people with disabilities. Here’s how to help:
- Email Maryland Congress members via The Arc's Action Portal. Type in your address, edit the body content template, and click "send email."
- Send a welcome letter to introduce yourself to your federal lawmakers and tell them how important Medicaid is to you. We’ve included a Sample Welcome Letter.
- Schedule a meeting with your members of Congress.
- Use this Sample Agenda Worksheet.
- Leave behind this Medicaid Overview document, which explains Medicaid and its importance in the lives of people with disabilities.
- Leave behind this Maryland Medicaid Data document, which includes Maryland-specific talking points about Medicaid and the impact of cuts.
GET INFORMED
To keep everyone informed on Medicaid, The Arc US held several webinars on the topic, and we've compiled several frequently asked questions and answers below.
WEBINARS
- Advocacy Conversations Part I: Protecting Medicaid’s Future in 2025
- Recording | Slides
- Advocacy Conversations Part II: How Medicaid Services Are Financed and Proposals to Limit Their Costs
Recording | Slides - Post Election & Powering Medicaid Advocacy: What’s Next?
Recording
FREQUENTLY ASKED QUESTIONS
Medicaid is one of the most significant healthcare programs in the country. It helps millions of people in the U.S. get health care. This includes people with disabilities, seniors, low-income adults, pregnant women, and children. Over 85 million Americans are covered. Medicaid is also the single largest source of federal funding for states. It also helps millions of people with disabilities access long-term support and services so they can live at home in their community. Medicaid is a federal program that has nationwide requirements. Congress sets baseline rules around eligibility and financing that states must follow. Each state can add to what Congress does as it administers and runs its programs.
States pay their part of Medicaid services in many ways. They may pay through general revenue, taxes, or county payments. The federal government can make changes about what is acceptable for states to use to match the federal money.
Medicaid helps people with disabilities throughout their lifetime—to get the care they need to protect their health and well-being and live with dignity. It is vital to people with intellectual and developmental disabilities because Medicaid:
- Covers essential health services needed by nearly one-half of all children with disabilities or other special health care needs.
- It is the largest payor of essential developmental services for infants and toddlers, enabling them to enter school ready to learn.
- Finances school-based health and mental health services for students with disabilities.
- It often covers things that private insurance does not adequately cover, such as complex wheelchairs, prosthetics, affordable prescription drugs, and technologies that help people communicate and live in the community.
- Helps people with disabilities work by providing a means to continue to receive health care, personal assistance services, and other Medicaid-provided support while working.
- It is the largest federal payor of long-term services and supports (LTSS) needed by more than 10 million children and adults with disabilities. LTSS means assistance with essential tasks, such as feeding, dressing, bathing, and walking. It can also include managing finances, shopping, meal preparation, and housecleaning.
- For many people with intellectual and developmental disabilities (IDD), Medicaid is their only source of funding for LTSS to enable them to live in the community.
- Provides comprehensive health care and long-term support and services for specific populations.
- Congress sets baseline eligibility, financing structure, and rules states must follow to get federal funding.
- States can add to what Congress does.
- States decide which optional services to provide and what optional categories of people are served.
- States make many decisions related to implementing the program, such as setting Medicaid reimbursement rates for providers.
State vs. Federal Payments
The federal medical assistance percentage (FMAP) is the percentage of Medicaid expenditures paid for by the federal government. These rates are determined annually for every state and based on the state’s per capita income relative to the national average.
Maryland's FMAP score is 50%, a $1 to $1 ratio.
Block grants are a fundamental change to how Medicaid is funded. They provide states with a fixed amount of money, fundamentally changing how Medicaid works by removing the automatic federal payment for approved state spending. The fixed amount provided to the state is usually lower than the expected growth in Medicaid. The fixed amounts might not account for the aging population, rising costs of health care, enrollment increases during public health emergencies, and other reasons Medicaid enrollment may rise.
The difference between the fixed amount the state receives and the costs means that states must decide if they can make up the difference or make difficult decisions about what to cut. This can lead to cuts in coverage, services, provider reimbursements, or other state spending to make up the difference. States may have to choose whether to cut nursing home care and disability services or reduce the number of children receiving health care.
Per-capita caps are another way to restructure Medicaid, which would set a fixed amount of federal Medicaid funding for each enrollee.
Medicaid and Medicare are government public health care programs that provide health care. The chart below will help you know the key differences.
| FEATURE | MEDICAID | MEDICARE |
| Purpose | Provides health coverage for low-income individuals and families, and HCBS Services home and community-based services (HCBS). | Provides health coverage for seniors (65+) and some younger people with disabilities. |
| Funding | Funded through federal formula based on income; state governments provide a match of 25-50%. | Funded through payroll taxes, premiums, and general revenue. |
| Eligibility | Based on income and other situations like family size or disability. | Based on age (65+) or certain disabilities. Income does not matter. |
| Dual Eligibility | When an adult child with a disability qualifies for both programs, they can benefit from the coordination of services. Medicare typically serves as the primary insurance, and Medicaid helps cover costs like premiums, co-payments, and services not covered by Medicare, such as long-term care. | Adult children if they have a qualifying disability and receive Social Security Disability Insurance (SSDI) benefits; or they are a disabled adult child (DAC), meaning they became disabled before age 22 and are dependent on a parent who is retired, deceased, or disabled and eligible for Social Security benefits. DACs can qualify for Medicare after receiving SSDI for 24 months. |
| Benefits | Covers a wide range of health services. Examples: long-term care, dental, HCBS, and vision. | Covers hospital care, outpatient services, and has optional drug coverage. Does not cover long-term care, dental, or vision. |
| Cost to Beneficiaries | It depends on the state but generally has no or a very low cost to the person. | Costs include premiums, deductibles, and co-pays. |
| Long-Term Care | Has extensive coverage for home care and long-term supports. | Offers limited coverage for short-term care. |
Block Grants: A fundamental change to how Medicaid is funded. Block grants provide states with a fixed amount of money. This can lead to cuts in coverage or services because states may be unable to cover the extra costs.
Budget Reconciliation: A unique process that allows Congress to pass budget-related legislation fast by having a simple majority vote in the Senate. This bypasses the usual 60 votes needed to avoid a filibuster. It can be used to make entitlement program changes.
Budget Resolution: Congressional measure that sets overall spending, revenue, and debt limits and provides a framework for Congress to develop appropriations bills and other budget-related legislation. It can contain budget reconciliation instructions to committees to make changes to mandatory spending.
Discretionary Spending: Discretionary spending is money that Congress decides how to spend each year during the annual budget process (education, employment, housing, respite care, research, etc.).
Filibuster: A strategy in the Senate to delay or block a vote on a specific piece of legislation. To overcome a filibuster, the Senate needs 60 votes.
Home and Community-Based Services: A Medicaid-funded program that offers support services to people with disabilities to help them live independently in their homes or communities instead of institutions.
Mandatory Spending: Mandatory spending is money the government is required by law to spend on specific programs. Funding levels are determined by eligibility rules or formulas set in law.
Per Capita Caps: A way to restructure Medicaid that would set a fixed amount of federal Medicaid funding for each enrollee. Like block grants, it would cut services.
Waivers: A way for states to provide customized Medicaid services to individuals.
Work Requirement: A proposed measure requiring people to work (or document activity) to access services. Some people with disabilities already work or cannot work due to their disability, but they still need access to care to survive.
Medicaid work requirements force beneficiaries to prove they are working or in approved activities like job training to keep their health coverage. While intended to encourage employment, they often create barriers to care instead.
Impact on People With Disabilities
Harms Health Outcomes
Medicaid is essential for individuals with disabilities, supporting their independence and well-being. Work requirements could lead to coverage loss, forcing people to skip medications, change providers, and rely on emergency care, worsening health. For example, Arkansas’ policy raised the uninsured rate without increasing employment.
Exemptions Are Ineffective
Though policymakers promise exemptions, they often fail because:
- Many disabled Medicaid recipients don’t qualify under narrow exemption rules.
- Vague criteria create bureaucratic hurdles.
- Excessive paperwork makes it difficult for eligible individuals to prove exemption.
Hurts Employment Opportunities
Medicaid funds crucial employment supports like job coaching and assistive technology. Work-hour requirements make it harder for people with disabilities, especially those in part-time or gig jobs, to maintain coverage.
Creates a Work Disincentive
People must either:
- Prove they’re “unfit to work,” reinforcing negative stereotypes, or
- Work but risk losing coverage if they can’t meet reporting requirements.
Harms Caregivers
Family caregivers relying on Medicaid could be forced to choose between working or providing care, adding financial and emotional stress.
Increases Bureaucratic Barriers
Work requirements create red tape, making it harder for eligible individuals—especially caregivers, non-English speakers, and those without internet—to keep coverage. In Arkansas, nearly 25% of affected adults lost coverage, including those working or with serious health conditions.
