Texas Medicaid at a crossroads

Texas’ Medicaid program covers millions of low-income children, pregnant women, seniors, and people with disabilities. But the state remains one of ten that have not expanded Medicaid to cover low-income adults without children, leaving hundreds of thousands — mostly women — uninsured.

As of October 2025, both federal and state budget decisions are putting new pressure on the system. The One Big Beautiful Bill Act (OBBBA), passed by Congress in 2025, will cut federal Medicaid funding and add new work-reporting rules beginning in 2026.

The timing is especially significant for Texas, which just passed House Bill 18 (2025) — a major rural-health law meant to stabilize struggling hospitals and expand tele-health and mental-health access. Without steady Medicaid funding, the very programs created under that new law could be weakened before they even get off the ground.

Why it Matters

Women make up a large share of Texas Medicaid enrollees, especially during pregnancy, postpartum recovery, and middle age when chronic conditions begin to rise. Many depend on small rural hospitals for basic and emergency care. If those hospitals close or scale back services, access to primary care, mental-health counseling, and postpartum support could disappear across large parts of the state.

Background

Medicaid is jointly funded by the state and federal governments. When a state expands coverage under the Affordable Care Act, the federal government covers 90% of costs for newly eligible adults. Texas opted out of that expansion, relying instead on a patchwork of hospital funding pools and limited coverage for parents and pregnant women up to 12 months postpartum.

The 2025 federal budget law (OBBBA) is projected to reduce Medicaid funding by hundreds of billions nationwide over the next decade. In Texas, where one in seven residents lacks health insurance, even small changes can ripple quickly. Hospitals warn that if reimbursements drop further, they may cut staff, delay new programs, or close entirely — erasing progress made under HB 18.

Resources

Texas Observer - West Texas Congressman’s ‘Big Beautiful’ Cuts Could Harm Rural Hospitals in His District
Texas Tribune - Texas rural hospitals facing closures want a piece of the $50B in federal funding up for grabs
Center for American Progress - The Truth About the One Big Beautiful Bill Act’s Cuts to Medicaid and Medicare