As Republicans on Capitol Hill debate approving a federal budget, state leaders are carefully watching for potential cuts to Medicaid funding.

Medicaid covers medical costs for about 80 million low-income Americans. Although most Medicaid funds come from the federal government, responsibility for management falls on state governments.

According to KFF, the federal government provides 68.9% of Medicaid funding, with states covering the rest. The amount each state spends on Medicaid varies; in some states, the federal government covers only about 60% of costs, while in others, over 80% are funded by the federal government.

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Among the budget bill's contentious issues are proposed changes to Medicaid that could impact millions of Americans. While Republicans argue these are not cuts but rather work requirements that would save billions, the nonpartisan Congressional Budget Office estimates that the legislation could strip more than 8 million people of their Medicaid coverage over the next decade.

The eligibility changes would not take effect until 2029, raising concerns about whether moderate Republicans can accept these long-term implications. Current work requirements dictate that able-bodied adults ages 19 to 55 who do not have children or other dependents must work, train for a job, or perform community service to remain eligible for Medicaid. They would need to put in at least 80 hours a month to qualify for government-sponsored health care.

"Well, if you're working in many conditions, you're getting private health care," Delaware Gov. Matt Meyer told Scripps News. "What is Medicaid for? It's for in most instances, people are not able to work or not able to work enough to get employer-sponsored health insurance. So saying people need to work to get health care, sure, I generally agree with it, but we also have to think for that population that is not able or in some cases willing to work, what should they get and shouldn't they get?

"If somebody has a communicable disease, if somebody has COVID or a more serious disease that spreads, and they're my neighbor, if I'm gonna see them in the streets, I want them to go to a doctor right away, whether they're working or not."

Meyer states that his wife is an emergency room physician and notes that the proposal would shift the financial burden of providing care from the federal government to hospitals.

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"That is an earthquake today for our healthcare system, and this is an even larger earthquake, this mega bill that's gonna have drastic negative impacts on health care, not just in Delaware but in Alabama, Mississippi, and across our country," Meyer said.

Republicans argue that implementing stricter work requirements is a matter of fairness.

"These programs are safety net programs. They're not designed for somebody, the 35-year-old sitting in his mom's basement playing video games, turning down work," House Majority Leader Steve Scalise told CNBC earlier this week. "That is not what a social safety net program is. It's to help disabled people, pregnant women, and people in hard times. That's what we're going to focus these programs back on. It's going to make the programs work better, but it will give big savings to the taxpayer.”