Current Trends - Future of Medicaid - Episode 193
- Jenny Rozelle, Host of Legal Tea
- Apr 22
- 6 min read
Hey there, Legal Tea Listeners – This is your host, Jenny Rozelle. Welcome back! Welcome back for another episode, which is a “current trends” topic where we talk about things going on currently that are relevant and pertinent to my estate and elder law world, and/or maybe things I’ve seen on the news or stumbled across on social media. Well today’s episode, we are going to dive into the future of Medicaid since there’s a lot of talking and whispering about Medicaid … and whether there will be federal budget cuts … and what that means for those on Medicaid. But before we really dive in to that specific topic, I think it is important I give a nice foundation of Medicaid – and particularly differentiating it between Medicare. Let’s start there…
Beginning with MediCARE. It is basically glorified health insurance for seniors. In better terms, Medicare is a federal health insurance program primarily for people 65 and older, regardless of their income or assets. Not, it DOES cover some younger people with disabilities and those with End-Stage Renal Disease, but by far, most people associate Medicare with 65 and older. What does Medicare pay for? Well, it helps pay for hospital stays, doctor visits, and prescription drugs, but typically requires premiums, deductibles, and copayments from those enrolled. It is divided into parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (prescription drug coverage). (In my opinion, that’s where Medicare starts to get confusing – all the parts!)
Shifting to MediCAID. Medicaid, on the other hand, is a joint federal and state program that provides health coverage to people with low incomes and limited assets. Eligibility is based not only on income but also on the value of what you own asset-wise —like savings, investments, or property. This income-based AND asset-based qualification means that individuals must have resources below certain thresholds to qualify. Medicaid covers doctor visits, hospital stays, long-term care, and various other services, typically with little to no cost for those who qualify. Each state runs its own Medicaid program following federal guidelines, so benefits and eligibility requirements can vary depending on where you live. (Which that piece is really important to know – every state tends to operate ever-so-slightly different when it comes to Medicaid.)
So, as you can see, MediCARE and MediCAID are different programs; though, it is possible to be on both – especially in our later years. So, what are the primary differences? Well, the main ones are: Medicare is primarily age-based (65+) while Medicaid is primarily based on someone’s income and assets; Medicare is entirely federal while Medicaid is administered by states with federal support; Medicare usually has costs for enrollees while Medicaid is generally free or very low-cost; and Medicare offers the same basic benefits nationwide while Medicaid benefits vary by state.
Alrighty, so now that we have that clear (clear as mud, right?), I want to emphasize that today’s episode is on MediCAID – because it is Medicaid that a lot of been talking about and worrying about. Here’s the scoop of what is going on and why you may keep hearing about Medicaid on your TV, the news, online, etc. Let’s dive in … The primary thing being discussed (regarding the future of Medicaid) is that it is currently uncertain due to proposed budget cuts by President Trump and Republican lawmakers. These proposed cuts, intended to reduce federal spending and potentially offset tax cuts, threaten to significantly alter the landscape of Medicaid. The House of Representatives has proposed substantial reductions in mandatory spending, with a large portion expected to come from the Medicaid program.
I want to be clear about something – this podcast is for informational and educational purposes only. What is it not? Any kind of political anything – While I am adamant about not letting any of my political beliefs seep into this episode, this topic is very political in nature, so what I ask of you is to not read into anything I say – rather, just take the words for what they are. Alright, enough of that … so the proposed Medicaid cuts have ignited a pretty intense political debate, with Democrats and advocacy groups strongly opposing what their Republican friends are possibly trying to do across the aisle. It is also important to remember that Medicaid operates as a joint federal-state program, meaning that changes at the federal level can have significant ripple effects on state budgets and healthcare systems – which will cause political parties to have to work together (or not) even on a state level.
Interestingly, according to KFF, which is an independent source for health policy research, polling, and news, a recent KFF Health Tracking Poll actually revealed a pretty strong public opposition to Medicaid funding cuts, with only 17% of adults favoring a decrease, while a significant majority (82%) believe funding should either increase or remain stable. It further revealed that these views were consistent across political affiliations, including Democrats, Republicans, and independents, as well as among Trump voters and rural residents. Furthermore, an overwhelming 97% of adults recognize Medicaid's importance to their local communities, with 75% deeming it "very important," regardless of political leaning.
What I think is probably most concerning from my seat as an estate and elder law attorney … is the growing disconnect between the soaring costs of long-term care and the affordability of long-term care insurance is creating a dangerous situation for the American middle class. As the demand for assisted living, skilled nursing facilities, and in-home care services rises, so do the associated expenses, often outpacing inflation and wage growth. This financial reality leaves many individuals and families facing a daunting financial burden. For those who either cannot afford the premiums for long-term care insurance or choose to self-insure, believing they will not need it, the prospect of needing extended care becomes a looming financial catastrophe. The reality is that a significant portion of the middle class will likely need long-term care at some point, and without adequate insurance, they will be forced to rely on Medicaid. Hence – my concern being an elder law attorney … so many think this does not and will not impact them, until it does. It will affect most folks in this country.
This reliance on Medicaid for long-term care creates a stark and widening gap between the wealthy, the poor, and the middle class. High-net-worth individuals have plenty of financial resources to privately fund their long-term care needs, shielding them from the complexities of this issue – and Medicaid. Conversely, those living in poverty typically already qualify for Medicaid, ensuring access to necessary care, albeit potentially with limitations (if the budget cuts make things more difficult). The middle class, however, finds itself in a vulnerable position. As they age and face the potential need for extended care, they may be forced to spend down their hard-earned savings and assets to qualify for Medicaid, effectively impoverishing themselves to gain access to essential services. This phenomenon not only threatens the financial security of middle-class families but also places an unprecedented strain on the Medicaid system.
The potential surge in middle-class Medicaid enrollment for long-term care has significant implications for the program's sustainability and honestly on a bigger topic, the whole economy. Increased demand for Medicaid services could lead to further budgetary pressures, potentially triggering debates about program cuts, stricter eligibility requirements, or alternative funding mechanisms. Furthermore, the fear of asset depletion may discourage middle-class individuals from saving for retirement or investing in their future, creating a ripple effect on the economy.
The long-term care dilemma underscores the urgent need for policy solutions that address the affordability crisis – which, by nature, includes a deep look and analysis at Medicaid. This may involve exploring innovative financing models, expanding access to affordable long-term care insurance, or strengthening public-private partnerships to address the growing gap in care affordability. Failure to address this issue could lead to a significant increase in financial hardship for many, many Americans and a strain on an already burdened system.
So, as we sit here today, in the Spring of 2025, the future of Medicaid is a bit of a fork in the road, caught between the rising tide of long-term care costs, the political push for budget cuts, and the overwhelming public support for its preservation (as the KFF poll noted). As the middle class faces the increasing likelihood of needing Medicaid for long-term care, and as proposed cuts threaten to strip coverage from millions, the program's sustainability and scope are under intense scrutiny. While public opinion strongly opposes reductions, the financial pressures on the system, coupled with political maneuvering, create an uncertain landscape. The coming years will likely see heated debates over funding, eligibility, and the fundamental role of Medicaid in providing healthcare, including long-term care. Medicaid’s evolution will hinge on whether policymakers can reconcile budgetary constraints with the growing need for affordable healthcare, potentially leading to significant restructuring or a widening gap in access to care. Only time will tell…
Alrighty, let’s wrap this episode up, shall we? Next week, we’re back to the “celebrity estate planning” type of episode – so, for this episode, I’m going to go dive into Sam Simon’s estate – Sam Simon was one of the co-developers of the famous sitcom, The Simpsons. I got the idea to do an episode on him from a Legal Tea Listener and when I did a quick search to see what happened, I was like, “Oh yeah – this will be a good episode!” So yeah, next week is on the Simpsons’ co-developer, Sam Simon, so tune in for that next week, Legal Tea Listeners. Talk to you then!
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