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Congress is considering major changes to Medicaid as part of broader federal budget negotiations. This blog will walk you through the basics of Medicaid and how current proposals could impact the program.
What is Medicaid?
Medicaid is a public health insurance program that provides coverage to more than 70 million people in the U.S., including many with serious or chronic health conditions like cancer. It is jointly funded by the federal and state governments, but administered by individual states, meaning there can be differences in who qualifies and what is covered depending on where you live.
Originally created in 1965, Medicaid is designed to help low-income individuals and families access essential health services. Every Medicaid program must cover 17 “mandatory benefits,” such as hospital care, lab tests, and nursing facility services. States can also choose to offer additional services.
Thanks to the Affordable Care Act (ACA), most states have expanded Medicaid eligibility. As of 2025, 40 states and Washington, D.C. have adopted Medicaid expansion, allowing more low-income adults, especially those without children, to qualify. That said, eligibility thresholds and available benefits still vary widely by state.
Medicaid and Lung Cancer
For people facing cancer, Medicaid can be a critical safety net. In 2023, about 10% of U.S. adults with a history of cancer relied on Medicaid. Among lung cancer patients specifically, one study of over 10,000 patients found that 16% were covered by Medicaid.
Medicaid plays a key role in covering services across the lung cancer care continuum, from screenings and diagnostics to surgery, treatment, and recovery. Research shows that in states that expanded Medicaid, patients were more likely to get surgery within 90 days of diagnosis and to receive care at high-volume hospitals. These hospitals are associated with better outcomes and lower complication rates.
States that expanded Medicaid also saw higher rates of people being up to date with lung cancer screening recommendations, especially in areas with good screening capacity.
Medicaid coverage also plays an important role in reducing financial toxicity, a term used to describe the financial strain patients experience due to the cost of cancer care. Lung cancer treatment can involve months or years of ongoing care, which may include surgery, chemotherapy, radiation, biomarker testing, targeted therapies, and palliative support. Without comprehensive coverage, many patients face overwhelming medical bills on top of lost income due to illness.
Medicaid helps relieve this burden by covering a broad range of necessary services with limited out-of-pocket costs. This financial protection can make a significant difference in a patient's ability to stay on treatment and maintain quality of life.
What’s Happening in Congress?
As of spring 2025, Congress is considering major changes to Medicaid as part of broader federal budget negotiations. The House of Representatives has directed key committees to identify $880 billion in cuts to mandatory spending over the next decade, with Medicaid, one of the largest programs, under heavy scrutiny.
Two of the most discussed proposals are per capita caps and block grants. These proposals would significantly change how Medicaid is funded, potentially limiting access to care for millions of people.
Under a per capita cap, the federal government would set a fixed amount of spending per beneficiary each year, regardless of individual healthcare needs. States would be entirely responsible for any spending above the cap. These limits could be applied across all types of Medicaid beneficiaries, or to particular groups, such as those who are eligible for coverage under Medicaid expansion. Most states could not absorb the additional cost of care for beneficiaries beyond the cap, so they would have to make difficult decisions that could include reducing benefits or eligibility. An analysis by KFF has estimated that 15 million people could lose coverage in the first year after per capita caps are implemented, and that number could increase significantly in subsequent years.
We do not have to imagine what the impact of block grants for Medicaid might be, because we can already see them at work in Puerto Rico, a territory of the United States. In U.S. states, Medicaid is an entitlement. If you meet the eligibility criteria, you get coverage. But in Puerto Rico, Medicaid operates under a block grant system. The federal government provides a fixed amount of overall funding each year. Once that money runs out, Puerto Rico is on its own to cover any additional costs. The result is fewer benefits, stricter eligibility, and overall worse health outcomes.
Despite being required to offer 17 essential Medicaid services, Puerto Rico can only afford to provide 10. Eligibility thresholds are also drastically lower. A family of four must earn under $13,566 to qualify, compared to around $35,535 according to federal eligibility standards. And yet, the cost of living in San Juan is comparable to cities like Orlando.
These limits have real consequences. Studies show that the reduced funding structure in Puerto Rico is linked to lower health outcomes across the board. Proposals to implement block grants or per capita caps nationwide would move state Medicaid programs closer to this model and result in poorer health outcomes for Americans.
Work Requirements
Another Medicaid proposal under consideration would require many adult enrollees to prove they are working or actively seeking work in order to keep their health coverage. The Congressional Budget Office (CBO) estimates this could result in around 2.2 million adults losing Medicaid coverage.
This raises serious concerns for people living with or recovering from cancer. In 2023, over 16% of working-age Americans with a history of cancer relied on Medicaid. Many of these individuals may not be physically able to work or consistently report their health status. While most proposals include exemptions for those who are medically unfit for employment, the burden of paperwork and verification could still lead people to lose coverage unintentionally.
The CBO also noted that while work requirements would reduce Medicaid enrollment, they would not increase employment. This means these policies may cut off access to care without achieving their intended goals.
Why This Matters
Lung cancer is already the leading cause of cancer death in the U.S., and timely access to care can make a significant difference. Policies that reduce coverage or make it harder to stay enrolled could delay diagnoses or interrupt treatment, especially for people who rely on Medicaid as their only insurance option.
What is happening in Puerto Rico is a cautionary tale. It shows that capping Medicaid funding can lead to real gaps in care and coverage. As similar proposals are being considered for all 50 states, it is critical to understand what is at stake and what you can do to make your voice heard.
How You Can Get Involved
It’s important that members of Congress hear from their constituents about the value of Medicaid and the potential consequences of these proposed changes. You can write your legislators using our campaign in the LUNGevity Action Network.