Michigan – This week, Governor Gretchen Whitmer presented the toplines of a somber research from the Michigan Department of Health and Human Services, cautioning that recent congressional suggestions to cut Medicaid funding may take health coverage from nearly 700,000 people.
Ordered under Executive Directive 2025-3, the study looks at how Republican-led congressional efforts meant to reduce $880 billion from the program to fund a $4 trillion tax cut would affect Michigan’s health-care system and economy.
“Medicaid provides a lifeline to 2.6 million Michiganders, and the huge, proposed cuts will terminate coverage for our neighbors, family, and friends who need it most,” said Governor Whitmer in a statement.
“More than 700,000 Michiganders including people fighting cancer, seniors in nursing homes, new moms, veterans, kids, and those living with disabilities could lose their health care. Michiganders will suffer because these proposed cuts go too far, too fast, and everyone, including those not on Medicaid, will end up paying more for their insurance.”
Lieutenant Governor Garlin Gilchrist II echoed Whitmer’s alarm, calling the findings “shocking” and imploring Republicans to reject the measures.
“Defunding Medicaid will make Michiganders pay more and travel farther to get care — that is unacceptable,” he said. Gilchrist accused lawmakers championing the cuts of prioritizing politics over people, and vowed that the administration would “stand tall” to safeguard access to care.
State Budget Director Jen Flood highlighted the possible financial consequences, saying that a $1.1 billion yearly drop in federal matching funding would “blow a $2 billion hole in our budget.” Flood underlined that closing such a gap without significant sacrifices to health-care services—or severe funding cuts for public safety, education, and veteran services—would be nearly impossible.
The MDHHS analysis breaks down the anticipated impacts:
- Reduced federal matching rates: An annual shortfall of $1.1 billion, risking health coverage for over 700,000 beneficiaries.
- New reporting requirements: Up to $155 million in administrative costs each year to track eligibility for individuals too ill to work.
- Provider tax reforms: A projected $2.3 billion drop in payments to hospitals and $325 million less for nursing homes.
- Shift to block grants: Between $4.1 billion and $13.4 billion lost over the next decade.
Rural areas would feel the strain first, MDHHS director Elizabeth Hertel said, as Medicaid patients make around 22 percent of hospital volume statewide. She pointed out that less funding would probably result in hospital closures, less providers, and longer emergency-room waits—all of which have been proven to aggravate health results and increase inequalities.
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Apart from health care, Medicaid supports Michigan’s economy. Supporting more than 200,000 enrolled providers, the state’s $27.8 billion Medicaid budget—70 percent federally funded—sustains a sector with a $77 billion yearly economic impact. Whitmer’s study underlines that Medicaid expansion by itself has created more than 30,000 employment and increased personal expenditure by $2.3 billion annually, while also adding $150 million in tax income.
Should Congress pass these reductions, Michigan hospitals may lose half a billion dollars year, endangering many employments and requiring citizens to travel greater distances for treatment. Whitmer cautioned that the result might be a declining population and a struggling economy—results she claims Michigan cannot bear.