Impacts of Federal Medicaid Cuts on Child Care and Vulnerable Populations

In July 2025, the passage of the H.R. 1 “Megabill” marked a significant reduction in federal Medicaid funding, amounting to $911 billion nationwide, with $33 billion projected to be cut in Ohio alone. This legislation introduces stringent work requirements and eligibility hurdles for Medicaid recipients, particularly affecting vulnerable populations, including child care workers and families reliant on these services.

Who Cares for Our Nation’s Children? Federal Medicaid Cuts Will Magnify Challenges for Child Care Workforce and the Young Families They Support

The new law imposes a work requirement mandating that individuals covered under the Affordable Care Act (ACA) Medicaid expansion report at least 80 hours of work or community service per month. This requirement, effective January 2027, is expected to disenroll approximately 5.2 million individuals, including many early childhood educators who already face significant challenges due to underfunding and high operational costs. Nearly 30% of the child care workforce relies on Medicaid, and the increased administrative burdens may lead to further instability in this sector.

Who Cares for Our Nation’s Children? Federal Medicaid Cuts Will Magnify Challenges for Child Care Workforce and the Young Families They SupportMedicaid cuts will bite area health care providersBay State BannerPrism

The legislation also restricts Medicaid eligibility for many lawfully present immigrants, including refugees and victims of human trafficking. This change could disqualify around 500,000 early childhood educators, or 21% of the workforce, from accessing necessary health services. States like California, Colorado, and New York may provide some coverage, but many immigrant workers will find themselves without support.

Who Cares for Our Nation’s Children? Federal Medicaid Cuts Will Magnify Challenges for Child Care Workforce and the Young Families They SupportPrismBay State Banner

The cuts extend beyond health care, impacting food assistance programs like the Supplemental Nutrition Assistance Program (SNAP). In Massachusetts, for example, over 40,000 adults may lose SNAP benefits due to new work requirements and reduced exemptions for parents. The law's provisions could lead to a significant increase in the uninsured population, with estimates suggesting that between 312,000 and 374,000 individuals in Massachusetts alone could lose health coverage.

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Critics argue that the new requirements create unnecessary barriers for families already struggling to make ends meet. Audrey Shelto, president of the Blue Cross Blue Shield of Massachusetts Foundation, stated that the changes will harm individuals and families, particularly those in working households. The added complexity of eligibility redeterminations every six months is expected to exacerbate the challenges faced by marginalized groups, including non-native English speakers.

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• “The changes in H.R. 1 add unnecessary administrative barriers to the already complicated process for getting and keeping coverage, especially when we know that most MassHealth members are already in working families.” — Audrey Shelto, President & CEO, BCBSMA Foundation

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• “We know from other states’ experience that this often results in people losing coverage who should still be eligible.” — Freddy Mejia, Policy Director, The Commonwealth Institute

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As the implications of the H.R. 1 “Megabill” unfold, advocates are calling for increased awareness and action to mitigate the adverse effects on vulnerable populations. The changes are set to take effect in 2027, prompting a need for community engagement and advocacy to ensure that those affected can navigate the new landscape of Medicaid and SNAP eligibility.

Who Cares for Our Nation’s Children? Federal Medicaid Cuts Will Magnify Challenges for Child Care Workforce and the Young Families They Support