AHCA’s Medicaid Cuts Would Harm Students and Threaten State Funding

By Duy Pham and David Socolow

In May, the U.S. House of Representatives passed the American Health Care Act (AHCA), which would repeal and replace the Affordable Care Act (ACA) and slash federal support for state Medicaid programs. Now, the U.S. Senate is working on similar legislation.

The AHCA is projected to make coverage less affordable and leave 23 million Americans uninsured by 2026. Low-income and nontraditional college students are especially likely to lose coverage, which will impede their ability to complete their postsecondary education. Furthermore, AHCA’s $457 billion in Medicaid cuts over 10 years would create major budget problems for states that maintain their enrollment levels.

The ACHA, and similar proposals in the Senate, would force states to deny coverage and ration care—or to divert funds from other state programs, such as postsecondary education, to make up for the lost Medicaid dollars. This echoes the period after the Great Recession, when states slashed postsecondary education funding to balance their budgets. State postsecondary funding fell nearly $29 billion on a per-student basis between 2008 and 2012—a cut of almost $2,500 per student. If Medicaid cuts like those in the AHCA become law, today’s policymakers will be forced to make similar decisions. In a new state-by-state analysis, CLASP directly compares the state fiscal impacts from the proposed Medicaid cuts to the deep cuts in state support for postsecondary education during the Great Recession.

These proposed cuts to Medicaid would severely harm college students twice—denying health insurance to millions of students in postsecondary education and forcing policymakers to fill the enormous Medicaid holes in their state budgets by decreasing funding for public colleges and universities. 

Read the report.