Hearing highlights how Medicaid cuts will result in worse health outcomes for all residents, hospital closures, job losses, and severe economic consequences
LANSING, Mich. (June 4, 2025) — In recent months, President Donald Trump and Republicans in Congress have been laying the groundwork to make massive, indiscriminate cuts to Medicaid. This work most recently culminated in the U.S. House passing a spending bill that slashes $535 billion from the program over the next decade, threatening to kick hundreds of thousands of Michiganders off their health insurance — all to afford a $4 trillion tax break for the wealthiest of individuals and corporations. Today, the Senate Health Policy Committee, chaired by Sen. Kevin Hertel (D-St. Clair Shores), heard testimony from patients, medical professionals, hospital leaders, and community advocates on the impact of these massive and historic Medicaid cuts.
The clear and resounding response from all those who testified: these cuts will have utterly devastating effects on both the health of Michigan residents and the economy.
“The testimony we heard today made one thing painfully clear: these cuts are not just numbers on a page — they represent real harm to real people,” said Sen. Hertel. “If enacted, these cuts would devastate communities already struggling to access care, while crippling our economy. While Republicans in Washington attempt to play games with the health of our state, I’ll continue to fight any way I can to stop these cruel, shortsighted cuts and protect the care that millions of Michiganders rely on.”
Impact on the Health of Michiganders
First and foremost, Medicaid is essential to the physical health and well-being of Michigan residents. Currently, 2.6 million people — or one in four Michiganders — receive health insurance through Medicaid, and the program covers more than 45% of all births, nearly 40% of children’s health services, and almost two-thirds of nursing home residents’ bills.
“As a mom, I can tell you firsthand what Medicaid means to families like mine. My child has undergone multiple surgeries that simply wouldn’t have been possible without Medicaid,” said Katie O’Neal, a mother from Ypsilanti. “Today’s hearing made it painfully clear that these proposed cuts would be devastating. Losing Medicaid wouldn’t just be a policy change — it would be a catastrophe for my family and so many others. We can’t afford to let that happen. Lawmakers need to hear from families like mine and stop these harmful cuts before they rip away the care that’s keeping our children healthy and safe.”
Medicaid does not only benefit those enrolled in the program, but all people who seek health care — including those with private insurance — as Medicaid funding serves a central role in Michigan’s health care system. Medicaid patients make up an average of
22% of hospital patient volume, and since the launch of Medicaid expansion in 2014, Michigan has seen uncompensated hospital care fall by more than 50%, easing financial pressures on hospitals and allowing them to keep essential services open. In rural areas, Medicaid recipients are particularly essential to keeping hospital doors open as they make up nearly 40% of patient volume.
“Cuts of this magnitude go far beyond waste, fraud and abuse and will drastically harm Michiganders, as well as hospitals and healthcare providers,” said Michigan Health and Hospital Association CEO Brian Peters. “Medicaid coverage improves the physical and economic health of our state by maintaining access to important healthcare services. These cuts will take away the healthcare coverage for tens of thousands of our neighbors, friends, and family members.”
Outside of traditional hospitals, Medicaid also provides over $8.6 billion to the mental health system, nursing homes, home- and community-based health services, and emergency care services in Michigan. These dollars are critical in providing physical and mental health care to residents, particularly those in low-income and rural communities where services are limited.
The Medicaid cuts Washington Republicans are proposing would have a devastating impact on people’s health, with the Michigan Dept. of Health and Human Services estimating that nearly 750,000 Michiganders would lose coverage — largely due to burdensome administrative hurdles and bureaucratic red tape the proposal seeks to enact. Additionally, without the influx of federal Medicaid funding, hospitals and care providers would be forced to downsize or close entirely, laying off workers and forcing all patients — including those with private insurance — to travel farther and wait longer to receive care.
Impact on the Health of Michigan’s Economy
Medicaid also plays a critical role in supporting the health of Michigan’s economy, as the health care industry is the largest private sector employer, generating $79 billion annually. Michigan’s Medicaid expansion alone sparked the creation of more than 30,000 new jobs, which have raised the personal spending power for Michigan residents by $2.3 billion each year and resulted in an additional $150 million in tax revenue. Proposed cuts to the program threaten thousands of health care jobs across Michigan and would deal a projected $2.9 billion blow to the state’s economy — putting communities statewide at risk of economic downturns.
“Today’s hearing underscores just how devastating Medicaid cuts would be for Michigan’s families, our health care system, and our economy,” said Monique Stanton, President and CEO of Michigan’s Children. “These cuts are not just numbers on a page — they represent real harm to real people. We’re talking about nearly 750,000 Michiganders losing coverage, hospitals closing their doors, and communities losing jobs and critical services. Medicaid is the backbone of our state’s health care system, supporting essential services for children, seniors, and people with disabilities. Cutting Medicaid would be catastrophic for our state, and we must act now to stop these harmful cuts and protect the care that millions of Michiganders rely on.”
Additionally, with 70% of Michigan’s Medicaid spending coming from federal sources, the cuts Washington Republicans are advocating for would blow a multi-billion-dollar hole into the state budget that would be difficult, if not impossible, to fill. This would force state leaders to make difficult decisions during budget negotiations on what to fund: Michiganders’ health care or education, roads, and public safety.
Michigan Senate Democrats’ Action
Throughout their time in the Majority, Sen. Hertel and his Democratic colleagues have been working to expand access to quality, affordable health care for Michiganders. As Chair of the Health Policy Committee, Sen. Hertel was instrumental in codifying popular provisions of the Affordable Care Act into state law and has worked to pass legislation to establish a state-based health insurance exchange and a prescription drug affordability board in Michigan.
Senate Democrats have also been active in amplifying the ramifications of decisions made by the Trump administration, including their rash and baseless mass firings, the chaos created by freezing critical federal funding, and DOGE’s attempts to access Michiganders’ sensitive personal data. Most recently, Senate Democrats adopted Senate Resolution 50, which called on President Trump and the U.S. Congress to change course and reject any proposal that would strip health care access to those in need.
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