140K Minnesotans could lose Medicaid under new law
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Brendan Lynch/Axios
An estimated 140,000 Minnesotans could eventually lose access to their government-funded health care under sweeping federal Medicaid changes President Trump signed into law this month.
Why it matters: That's about 12% of all people currently using the state's Medicaid program, known as Medical Assistance (MA).
The big picture: The prediction is a top takeaway from a new preliminary analysis from the state Department of Human Services saying that Minnesota will lose upwards of $1.4 billion in federal heath care funding over the first four years of implementation.
Catch up fast: The federal tax and spending package, called the One Big Beautiful Bill Act, aims to reduce Medicaid spending by nearly $1 trillion through new work reporting requirements, twice-yearly eligibility checks and other provisions shifting costs to state and hospitals.
Follow the money: DHS estimates that coverage losses related to the work reporting requirements alone will cut federal funding flowing to the state by $200 million a year.
- Local state, and tribal governments also face an additional $165 million in annual administrative costs related to implementation, and hospitals could eventually lose $1 billion a year under changes to the provider tax.
What they're saying: John Connolly, a deputy DHS commissioner and state Medicaid director, said Monday that the law represents a "dramatic change for Minnesota" that will hit low-income adults without children, those parenting teenagers and rural hospitals particularly hard.
- A top concern, he said, is that people who are eligible for Medicaid will still "lose coverage because they can't complete the paperwork" required by the law.
- Others who still have coverage may see their out-of-pocket costs rise, he warned, leading fewer Minnesotans to seek preventative care.
The other side: House Speaker Lisa Demuth (R-Cold Spring) defended the changes as "common-sense work requirements for able-bodied adults without children" that "strengthened program integrity measures to make sure only those who are eligible are receiving benefits."
- "In a state with such a massive fraud problem, these changes are a welcome step in the right direction to make sure Medicaid is strong for those who need it," she added.
What we're watching: Officials are still assessing the direct impact on the state budget, which already faced a projected deficit down the road.
- Gov. Tim Walz says he probably won't need to call a special session to address the fiscal impact, since many of the Medicaid changes don't take effect until 2027 or later.
- But he predicted to Axios last week that lawmakers will face "very difficult decisions" when they return to St. Paul in February.
Zoom out: The 900-page law, which locks in tax cuts Trump enacted in his first term, will shape Minnesotans' lives in many other ways:
🍽️ Low-income residents may feel cuts to federal food assistance, while owners of high-priced homes could see tax breaks.
🧑🧑🧒🧒 Other tax deductions are aimed at parents, workers who bank tips or overtime, and seniors.
🚘 People who gamble, give to charities or take out new car loans could also see changes to their tax bills.
⚡️In an interview with Axios, Walz said he's concerned about the effects potential increases to home electricity bills, reduced tax incentives for clean energy, and changes to tax credits for the sustainable aviation fuel industry, a top priority for the local business community, will have on the state.