A look at how Medicaid cuts could alter one state

Summary

Marketplace Morning Report Summary: A Look at How Medicaid Cuts Could Alter One State

Release Date: June 30, 2025

In this episode of the Marketplace Morning Report, host Nancy Marshall Genzer delves into the potential ramifications of President Trump's proposed tax and spending bill on Medicaid, the joint federal-state health insurance program that serves approximately 70 million low-income and disabled Americans. Focusing on North Carolina as a case study, the report explores how these cuts could significantly impact healthcare provision, rural economies, and the broader societal fabric.

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Overview of Proposed Medicaid Cuts

The episode begins with Nancy Marshall Genzer introducing the contentious tax and spending bill spearheaded by President Trump, which seeks to implement sweeping changes to Medicaid. These changes threaten to revoke Medicaid expansion in states that have adopted it, potentially stripping coverage from millions of Americans who rely on the program for essential healthcare services.

Impact on North Carolina

To illustrate the real-world effects of these proposed cuts, the report zeroes in on North Carolina, the most recent state to expand Medicaid coverage in 2023.

Family Physician Shannon Dowler shares a poignant story highlighting Medicaid's critical role:

"He went from being someone at risk for having his leg amputated and being on permanent disability to someone who is fully back to work on his farm." ([07:07])

This transformation underscores how Medicaid expansion has been a lifeline for individuals in rural areas, enabling them to receive necessary medical care that was previously unaffordable.

Brian Floyd, COO of a nine-hospital system in rural North Carolina, emphasizes the economic benefits:

"It is purely a lifeline. It means the difference between red and black ink." ([07:44])

Floyd explains that Medicaid funds inject an estimated $8 billion annually into the state's economy, supporting healthcare facilities and ensuring their financial stability.

Economic Implications

Alex Olgan, reporting for Marketplace, highlights the broader economic impact:

"Covering an additional 660,000 North Carolinians also injects federal dollars into the state's economy, an estimated $8 billion each year." ([07:20])

This infusion of federal funds not only supports healthcare providers but also stimulates local economies by sustaining jobs and enabling increased spending within communities.

Potential Consequences for Rural Areas

The proposed budget bill poses significant threats to rural hospitals and healthcare providers. Cody Kinsley, former North Carolina Secretary of Health and now a senior policy advisor at Johns Hopkins University, voices deep concerns:

"Rural areas would be hardest hit." ([08:20])

Kinsley warns of a domino effect where cuts could lead to the closure of emergency rooms, loss of employment for healthcare workers, and a decline in local businesses due to reduced consumer spending:

"It means that people lose employment that sustains them and their families in those communities and therefore lose their ability to spend money and support local businesses." ([08:34])

Divergent Views on Medicaid Reforms

While many healthcare professionals and economists warn against the drastic cuts, there are divergent opinions on how to effectively reform Medicaid. Michael Cannon from the libertarian think tank Cato Institute offers a contrasting perspective:

"I think our Medicaid problems are going to get worse before they get better." ([08:51])

Cannon argues that the proposed tweaks do not go far enough in addressing systemic issues. He advocates for a more radical shift in healthcare funding:

"Cannon thinks Congress should, yes, cut Medicaid spending, but also think more radically and shift who controls health care dollars from the government to consumers." ([08:55])

Cannon believes that empowering consumers to have more control over their healthcare spending could lead to higher quality care at lower prices. However, he acknowledges that such reforms are not currently under consideration.

Conclusion

The episode concludes by highlighting the stark choice facing policymakers: maintaining the status quo, which ensures continued coverage and economic benefits for millions, or proceeding with cuts that could unravel years of progress in healthcare accessibility and economic stability, especially in rural regions. As Alex Olgan aptly summarizes:

"The reality of the cuts that are on the table mean millions will lose coverage but still need care." ([09:03])

This Marketplace Morning Report episode underscores the critical juncture at which Medicaid reform stands and its profound implications for individuals, healthcare providers, and local economies across states like North Carolina.

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For more in-depth analysis and updates on this evolving story, tune into future episodes of the Marketplace Morning Report.

Transcript

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[Nancy Marshall Genzer]

The US And UK Reach a new trade deal from Marketplace, I'm Nancy Marshall Genser in for David Boncaccio. First, we'll get lots of new data this week. The stock market is also on a roll. We're joined now by Julia Coronado. She's founder and president of Macro Policy Perspectives and a professor at the University of Texas, Austin. Good morning, Julia.

[Julia Coronado]

Good morning.

[Nancy Marshall Genzer]

This is a short but busy week. We'll get a number of reports on the labor market with the big jobs report on Thursday. What will you be looking for in the tea leaves of all that data?

[Julia Coronado]

So job growth has been slowing in the US and we expect continued slowing. Most economists are looking for a number closer to 100,000 jobs created, down from, say, 140,000 last month and much stronger numbers last year.

[Nancy Marshall Genzer]

Is there a jobs benchmark the Federal Reserve is looking for? So if we see job creation below, say, 100,000, would that nudge Fed officials toward a rate cut next month?

[Julia Coronado]

Well, that's a tricky question because the jobs growth is expected to slow in part because immigration is slowing. And when immigration slows, there's fewer workers to hire. And, and that's not necessarily a problem. It just means the US labor market will grow slower. So we use the unemployment rate as the guide to whether the labor market is actually weakening. If that's rising, that tells you that labor supply isn't strong enough to absorb labor demand. And that is expected to tick up to 4, 3, 4.3% from 4.2% where it's been for the last three months.

[Nancy Marshall Genzer]

We had a nice stock market rally last week, which companies are leading the way now?

[Julia Coronado]

Well, it was a little bit broader based last week. There's some optimism on the trade front that maybe some deals will be forthcoming. And of course, there's a fiscal package working its way through Congress. Still, the valuations are very concentrated in tech names. And again, there's a little bit of a disconnect between an economy that's slowing down and a stock market that's heating up. Usually technology is used to explain that tension.

[Nancy Marshall Genzer]

Julia Coronado is founder and president of Macro Policy Perspectives and a professor at the University of Texas, Austin. Well, thank you, Julia.

[Julia Coronado]

It's my pleasure.

[Nancy Marshall Genzer]

A new deal reducing tariffs between the US and UK is in effect this morning. It gives British car producers preferential access to the world's biggest consumer market. American producers of some agricultural products, including beef, will now be able to sell in the UK. Here's more from the BBC's World Correspondent, Joe Inwood.

[Joe Inwood]

This deal means UK motor manufacturers will be able to sell up to 100,000 cars a year into the US with a tariff of 10%, a significant advantage over their international competitors. Other goods will also face a flat 10% import tax. But the deal, which was signed at the G7 two weeks ago, doesn't yet include the promised details for steel or aluminium. In return, up to 1.4 billion litres of US ethanol could arrive in the UK tariff free, along with 13,000 tonnes of US beef. The UK government has previously insisted that UK food standards will not be compromised.

[Nancy Marshall Genzer]

That's Joe Inwood with our News Partners. The BBC Canada has cancelled a digital services tax targeting U.S. technology firms just hours before it was due to take effect. The proposed tax had led President Trump to suspend trade talks between the two countries. Canadian Prime Minister Mark Carney said the announcement allows Canada to resume trade negotiations with the US with the goal of reaching a deal by July 21st.

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[Joshua McNichols]

Here in Seattle, we're building the technologies of the future, from AI to clean energy.

[Monica Nicholsburg]

But we're also dealing with some of today's big, biggest challenges, like the housing crisis and the skyrocketing cost of living.

[Joshua McNichols]

We're here to break it all down for you. I'm Joshua McNichols.

[Monica Nicholsburg]

And I'm Monica Nickelsberg. Join us on Booming, a weekly podcast from KUOW about the economic forces shaping our lives here in the Pacific Northwest.

[Joshua McNichols]

Listen on the KUOW app or wherever you get your podcasts.

[Nancy Marshall Genzer]

President Trump's big tax and spending bill could make sweeping changes to Medicaid, the joint federal state health insurance program for 70 million low income and disabled disabled people across the U. S. Alex Olgan takes a look at what this could mean for the most recent state to expand Medicaid coverage.

[Alex Olgan]

Family physician Shannon Dowler says Medicaid has been a game changer for her patients in rural western North Carolina. She remembers caring for one particular farmer.

[Julia Coronado]

A gentleman in his late 30s who had a terrible leg ulceration that would not heal.

[Alex Olgan]

He couldn't afford the care and the medicine he needed. That is, until he got coverage. When the state expanded Medicaid in 2023.

[Julia Coronado]

He went from being someone at risk for having his leg amputated and being on permanent disability to someone who is fully back to work on his farm.

[Alex Olgan]

Covering an additional 660,000 North Carolinians also injects federal dollars into the state's economy, an estimated 8 billion each year. Brian Floyd is COO for a nine hospital system in a rural part of the state. He says Medicaid funds help shore up finances.

[Julia Coronado]

It is purely a lifeline. It means the difference between red and black ink.

[Alex Olgan]

Floyd says he was working on plans to reopen a shuttered emergency room in a remote corner of eastern North Carolina. But the budget bill has thrown all of this into question. The changes Congress is considering put hundreds of rural hospitals across the country in precarious positions. In North Carolina. It would erase all of the Medicaid expansion and raise the price of private insurance on healthcare.gov making it unaffordable for another quarter million people. Former North Carolina Secretary of Health Cody Kinsley says rural areas would be hardest hit.

[Joshua McNichols]

People are just feeling frustrated about how that's kind of a punch in the gut.

[Alex Olgan]

Kinsley is now a senior policy advisor with Johns Hopkins University. He worries about the ripple effects on rural doctors, nurses and other healthcare workers.

[Joshua McNichols]

It means that people lose employment that sustains them and their families in those communities and therefore lose their ability to spend money and support local businesses.

[Alex Olgan]

Still, Michael Cannon with the libertarian think tank the Cato Institute says the tweaks lawmakers are floating actually don't go far enough.

[Julia Coronado]

I think our Medicaid problems are going to get worse before they get better.

[Alex Olgan]

Cannon thinks Congress should, yes, cut Medicaid spending, but also think more radically and shift who controls health care dollars from the government to consumers.

[Joshua McNichols]

And it's only then that the health sector will start giving consumers higher quality health care at a lower price.

[Alex Olgan]

That's not on the table right now. The reality of the cuts that are on the table mean millions will lose coverage but still need care. I'm Alex Olgan for Marketplace.

[Nancy Marshall Genzer]

And I'm Nancy Marshall Genzer with the Marketplace Morning Report from apm, American Public Media.

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