Aging at Risk: The Impact of Medicaid Cuts on Older Adults 

There is a Cantonese phrase to describe a protective force in one’s life as “a death-exemption plate.” We know this because at a recent SCAN Foundation gathering, an older woman in New York City told us that her Medicaid coverage is such a shield. For her, it “keeps death away.” She is not alone. 

Almost 9 million older adults aged 65 and up rely on Medicaid to help them afford health care and long-term services and supports. One-and-a-half million of these older adults use home- and community-based services (HCBS) to help with their functional and daily needs, while millions more depend on Medicaid to cover Medicare out-of-pocket costs like premiums, co-pays, and deductibles.  

The SCAN Foundation, where we serve as president and vice president, is focused on programs and investments that help all older adults, particularly those from underrepresented communities, age well at home and in community. Medicaid is one such program. For decades, the program has connected lower-income older adults and people with disabilities to the kind of care that helps them live with independence and purpose. These are our parents, grandparents, and neighbors, and they reside in every community across the country — rural, urban and everywhere in between.  

The congressional committee with jurisdiction over Medicaid has been asked to reduce the deficit by $880 billion to pay for tax cuts. According to the Kaiser Family Foundation, this is not be possible without significant federal funding cuts to Medicaid. Policymakers considering changes to Medicaid, and the public, must understand the vital role it plays in enabling older adults to age well at home and in community— and in preventing avoidable health care costs.  

Recent analysis from the Century Foundation estimated that a cut of $500 billion in federal funding to Medicaid would leave more than 2.7 million Americans over the age of 65 without vital services they depend upon.  

What specifically might be impacted by cuts to the program? Here are three examples: 

Home- and Community-Based Services 

Medicaid’s coverage of HCBS, which can help with eating, bathing, and dressing, and other activities of daily livings, is a particularly important aspect of the program for older adults and their families. But since HCBS coverage is not mandatory under federal law and does not serve every Medicaid enrollee, it could become a key target for cuts. States with fewer federal dollars for Medicaid might restrict access for HCBS by modifying eligibility standards or reducing benefits. Ironically, this could ultimately end up costing states more, as HCBS has been shown to be cost-effective by delaying or preventing the need for more expensive institutional care.  

Currently, every state covers some form of HCBS in their Medicaid program, and according to 2022 data from the Centers for Medicare & Medicaid Services, over 7.8 million Medicaid enrollees used these services, about one in five of whom were 65 and older. And these programs are already under-resourced. In 2024, 711,000 Americans were on HCBS waiting lists with an average wait time of 40 months.  

Medicaid Enrollees Using HBCS by State in 2021 

Source: KFF analysis of the T-MSIS Research Identifiable Files, 2021 DQ: Data categorized as “unusable” based on the DQ Atlas.  

Older adults desperately want and need these supports. We know because we asked through The People Say, a qualitative research platform developed and supported by The SCAN Foundation in partnership with The Public Policy Lab that includes data from over 100 hours of interviews with older adults. Their message on HCBS is clear: They need home- and community-based services to maintain their independence and sense of purpose.  

Direct Care Workforce  

Older adults and other Medicaid beneficiaries rely on the program for timely access to the direct care workers who provide this home- and community-based care. Federal funding cuts could make it even harder for enrollees to find caregivers, as states may be forced to reduce Medicaid reimbursement rates, the low level of which has already hindered the stability and growth of workforce. Any additional reduction may force more members of the overworked HCBS workforce to leave the profession. And without home-based caregivers, states will see an increase in wasteful medical spending through a rise in preventable emergency department visits, hospitalizations, and exacerbation of other acute health care problems.  

The resulting workforce shortage could hamper access to care for another group of older Americans: low and middle-income older adults. This cohort of individuals — the Forgotten Middle — does not meet Medicaid’s eligibility standards and cannot afford private senior housing. Home care agencies that provide services to these older Americans might respond to lost Medicaid revenue and workforce shortages by raising the price of their services. This would make it even more difficult for many older Americans to afford home care out-of-pocket and could increase the already heavy financial and caregiving burdens borne by families trying to support aging loved ones.  

Medicare 

The Medicare program is also likely to be impacted by cuts to Medicaid, as about one in three dollars of all Medicaid spending supports Medicare enrollees. For the nearly 9 million older adults who rely on both Medicare and Medicaid, these cuts could mean fewer health care options, delayed treatments, and increased out-of-pocket costs. 

Medicaid plays an important complementary role to Medicare coverage for these millions of “dually eligible” older adults. It covers the costs of Medicare premiums, co-insurance, co-pays, and deductibles for millions of these low-income older adults, saving them money that they can use on essentials like food and rent. Federal funding cuts could lead to reduced access to this important financial support.  

Research also indicates that by covering critical services and supports like HCBS, Medicaid can help prevent costly Medicare-financed acute care utilization. Helping people with their functional needs can forestall exacerbations of health conditions, averting a rapid decline that would require a trip to the emergency room or hospital. 

One in 10 of the People Who Rely on Medicaid Are Over 65  

As Congress considers federal financing cuts to the program, it is critical to understand the direct and indirect impacts those cuts would have on older adults, their families, the health care system and the economy. States could be especially impacted; cuts of the magnitude being contemplated would undoubtedly strain their finances, requiring them to generate new revenues or reduce Medicaid spending by eliminating coverage for some groups of people, covering fewer services, or reducing rates paid to home care workers and other providers. All of these responses could add to the already large rolls of HCBS waiting lists that states maintain, further exacerbating the current access challenges that low-income, high-need older adults and people with disabilities face.  

Going forward, we all must work to better elevate the direct experiences of older Medicaid beneficiaries. They are the true experts on how the program plays out in their lives. To them, Medicaid is not a policy on paper or a budgeting bargaining chip — it is a vital force that allows them to live and age well, a plate that protects them from death. Policymakers have to know this, and they have to feel it.  

The SCAN Foundation envisions a society where all of us can age well with purpose. We pursue this vision by igniting bold and equitable changes in how older adults age in both home and community. For more information, please visit https://www.thescanfoundation.org