Trump's "big, beautiful bill" means massive cuts to Medicaid — here's how Minnesotans could be affected
President Trump's "big, beautiful bill" is now law, and Minnesota, like other states, is confronting the reality of sharp cuts to Medicaid, which in Minnesota is called Medical Assistance.
The bill means tax breaks as well as cuts to the nation's safety net programs. It will extend the 2017 Trump tax cuts for most Americans and create new temporary tax cuts on tips and overtime, as well as taxes on social security for many Americans.
But the cuts in Medicaid, over $1 trillion over the next 10 years, are expected to reshape not just the federal budget but state and local budgets too.
Minnesota state officials warned the bill would cut $500 million a year in reimbursements for hospital and nursing home coverage. The Kaiser Family Foundation estimates 152,000 to 253,000 Minnesotans could lose their health insurance coverage.
The cuts would shift costs to state and county governments, a move that could lead to higher local taxes.
"I think it's a tremendous increase in the cost to both state and county governments, but also to providers in terms of uncompensated care," John Connolly, the state director of Medicaid, said.
The president's bill also creates new work requirements for able-bodied Medicaid recipients. It requires monthly and quarterly proof that work requirements are being met. The provision, while hailed by many, is expected to create more paperwork and require an increase in the need for more government workers to manage it.
"We are scouring the bill to understand everything that is in it and how it interacts with our state policies and programs," Connolly said.
The bill is expected to have a major impact on hospitals and nursing homes, which rely on Medicaid reimbursements.
Hennepin Healthcare in downtown Minneapolis is the area's largest safety net hospital. The hospital estimates it will lose $145 million in funding a year. About 95,000, or half of all its patients a year, depend on Medicaid. Eighty-seven percent of all births at Hennepin Healthcare are paid for by Medicaid.
However, the hospital will still be required to treat all patients regardless of their ability to pay. The predicted result: long lines in the ER and cuts to major specialty programs.
"If my patients can't come in to see me, they are going to wait until things get really bad," said Dr. Tyler Winkelman, who works at Hennepin Healthcare. "And that means once things have hit that point, they will need to see my colleagues in the emergency department, and we really worry about the emergency department filling up."
The bill is structured so that most Americans will feel the impact of the tax cuts in the spring of 2026, but some of the provisions, like work requirements for Medicaid, do not take place until 2027, after next year's midterm Congressional elections.
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