New Federal Law Could Cut Medicaid Coverage for 175,000 Marylanders

Medicare Enrollment Application — Source: Raja J / Getty

A recent analysis from the Maryland Department of Health reveals that up to 175,000 Marylanders may lose Medicaid coverage under the new federal legislation known as the One Big Beautiful Bill Act. The state could also face a loss of $2.7 billion in federal funding and incur millions in additional costs to implement the law.

The law introduces complex new work requirements, paperwork, and eligibility checks for Medicaid enrollees. It also changes how states fund health programs, how doctors are reimbursed for treating complex cases, and which immigrants qualify for coverage.

Maryland officials had anticipated some financial impact during legislative debates, but the latest review shows even more severe consequences. The changes could affect nearly every Maryland resident, not just those on Medicaid, leading to reduced healthcare access and longer emergency room wait times.

“Many of the effects are still unknown,” said Ryan Moran, the outgoing deputy health secretary who oversees Maryland’s Medicaid program, which currently serves about 1.5 million residents, roughly one in four. “But over time, these provisions will shock the healthcare system, with effects rippling across the board.”

Most significant provisions take effect next year, intensifying economic strain on Maryland’s already tight budget, hospitals, and healthcare providers. Officials warn this squeeze may lead to job cuts, spending reductions, and even closures of some healthcare facilities, especially in rural areas, though some may access special federal funds created by the law.

Additionally, lawmakers chose not to extend enhanced tax credits for 190,000 Marylanders who buy private insurance through the state health exchange, established under the Affordable Care Act. These tax credits will expire at the end of the year, making coverage less affordable for many.

Michele Eberle, executive director of the Maryland Health Benefit Exchange, said the law “significantly increases healthcare costs for Maryland Health Connection consumers, putting vital coverage further out of reach for many families.” She warned it could undo years of progress in expanding affordable insurance.

In response to these federal cuts, insurers on Maryland’s exchange have requested an average rate increase of 17 percent.

Some parts of the law are currently under legal challenge. For example, restrictions on payments to clinics providing abortions, primarily targeting Planned Parenthood, could cost Maryland $2.7 million. However, a temporary court order allows funding to continue during ongoing litigation.

On a related note, Maryland Attorney General Anthony Brown joined a coalition of states opposing new federal rules affecting the Affordable Care Act. He stated these rules, set to take effect in August, risk raising premiums and out-of-pocket costs, potentially causing 1.8 million Americans, including 34,000 Marylanders, to lose coverage.