LANSING — On Monday Governor Whitmer released findings from a Michigan Department of Health and Human Services (MDHHS) report outlining the severe consequences federal proposals to slash Medicaid would have on Michigan. The report warns that the proposed cuts could strip health care coverage from more than 700,000 residents, place added financial strain on hospitals and small businesses and blow a $2 billion hole in the state budget.

“Medicaid provides a lifeline to 2.6 million Michiganders,” Whitmer said. “These devastating cuts will terminate coverage for our neighbors, family, and friends — including seniors, new moms, veterans and children. Everyone, including those not on Medicaid, will pay more for their insurance if these cuts go through. Republicans in Congress cannot let this happen.”

Lieutenant Governor Garlin Gilchrist II echoed Whitmer’s concerns, calling the proposed reductions “shocking and unacceptable.” He accused Republicans of “putting politics over people” and warned the cuts would force residents to pay more and travel farther for care, particularly harming rural communities.

The report was produced in response to Executive Directive 2025-3, issued by Whitmer, instructing MDHHS to assess the potential impact of the federal Republican-led plan to cut $880 billion from Medicaid over 10 years — the largest proposed reduction in the program’s history.

According to MDHHS, the proposals include slashing federal matching rates, imposing new administrative requirements and altering funding structures, all of which would devastate Michigan’s health care system. Notably, hospitals could lose more than $500 million annually, risking closures in rural areas and leading to job losses statewide.

State Budget Director Jen Flood warned that the state cannot fill the budget gap without cutting services elsewhere, including education and public safety.

MDHHS Director Elizabeth Hertel emphasized that Medicaid supports 22 percent of hospital patient volume statewide. Loss of funding would lead to hospital closures and worse health outcomes, particularly in rural areas.

Beyond health care, Medicaid plays a pivotal role in Michigan’s economy. The program contributes to $77 billion in annual economic impact, supporting more than 30,000 jobs and generating $150 million in state tax revenue each year. Cuts to Medicaid, officials warn, would cripple Michigan’s health care industry, reduce population growth and damage the state’s economy.