Vermont officials warn federal proposals could cut Medicaid funding by millions

State Medicaid leaders told the House Appropriations Committee on April 9, 2025, that a package of federal proposals being discussed in Washington could reduce Vermont’s Medicaid funding by tens or hundreds of millions of dollars and would force state decisions on whether to backfill cuts, reduce services, or tighten eligibility.

Monica Ogilby, the state Medicaid director, and Ashley Berliner, director of Medicaid policy for the Agency of Human Services, outlined items in play in Congress and by federal agencies and gave dollar‑figure illustrations for Vermont during a roughly three‑hour briefing.

Why it matters: Medicaid pays for a large share of health care in Vermont and the state uses federal matching dollars to support hospitals and programs statewide. Changes in federal participation or authorities could shift costs to the state general fund, require program reductions or increase “churn” — residents repeatedly moving on and off coverage.

Ogilby said one of the clearest near‑term risks is a proposal to eliminate the enhanced federal medical assistance percentage, or FMAP, for the Affordable Care Act’s expansion (the “new adult” group). She said, “That 90% FMAP is substantially higher than our traditional FMAP rate,” and estimated losing the enhanced match would reduce federal funding to Vermont by about $80,000,000 a year for that population. Ogilby added that Vermont has about 65,000 people classified in the new adult group and that…