The Big Beautiful Cost of Medicaid Cuts

There are moments when policy becomes personal. This is one of them.

Medicaid cuts in Indiana are no longer theoretical—they are active, expansive, and alarming. These aren’t just budget adjustments. These are structural decisions that will affect how we educate, how we care, how we feed, and how we treat one another. And no one will be untouched.

Medicaid is a vital funding stream for public education in Indiana, especially for students receiving special education services. It helps cover everything from speech and occupational therapy to mental health care and transportation. It’s what makes it possible for students with disabilities to access what the law promises: a free and appropriate public education.

But Medicaid is being cut.

And when those dollars disappear, schools are left to fill the gap—or more likely, unable to fill it at all. As a former educator, I know very well that our teachers, who are already stretched beyond capacity, will be asked to take on even more. Students who need behavioral support or personal aides may lose them. To be clear: the students most deeply impacted will be those who already carry the greatest challenges.

According to the Indiana House Democrats, Medicaid is the third-largest source of K–12 education funding in Indiana, especially vital to special education.  But Medicaid has been cut.

The Medicaid conversation often forgets one painful truth: hunger is directly connected.

In Indiana, nearly 950,000 Hoosiers, including more than 18% of children, experience food insecurity (Feeding America / Gleaners Food Bank). When Medicaid is threatened, so is SNAP (Supplemental Nutrition Assistance Program). Current proposals could impose new work requirements, asset limits, and administrative barriers that would push thousands of working families out of these essential programs.

The consequences are immediate and dire:

• Up to 133 million meals could be lost annually in Indiana (Indianapolis Urban League).

• The state could be forced to absorb $356 million in SNAP-related costs by 2028 if federal shifts pass through Congress.

• Food banks, already serving at capacity, would be overwhelmed—yet still expected to fill the gap.

Hunger should never be the result of bureaucracy.

Medicaid has also made it possible for thousands of children (including my son) in Indiana to receive life-changing therapies like Applied Behavior Analysis (ABA). This care has helped children find their voices, build independence, and connect to their communities. While ABA is not for everyone, for those who deem it effective, the option is being removed.

But under the new Medicaid structure, Indiana is implementing:

• A 30-hour weekly cap on ABA services.

• A three-year lifetime limit, with no clinical flexibility.

• Reimbursement rates that fall well below the cost of service, forcing many providers to scale back or close.

ABA therapy spending in Indiana grew from $14 million in 2017 to $639 million in 2023, according to the Indiana Capital Chronicle.

Instead of ensuring sustainability, the response has been restriction. Providers are warning of staff layoffs and client reductions. Families are already receiving letters that their services will end—regardless of their child’s progress and needs.

This is not responsible policy. This is abandonment.

Indiana has a painful history of institutionalization—warehousing people with disabilities far from their families and communities. In recent decades, the state has worked to shift toward home- and community-based care. But now, that progress is being quietly undone.

Cuts to Medicaid caregiver payments and waiver services are pushing families to the brink.

A federal lawsuit filed in 2024 argues that Indiana’s Medicaid budget decisions will lead to the forced institutionalization of people with disabilities, due to insufficient home-based supports (AP News).

When families can no longer access or afford to care for their loved ones at home, institutions become the only option—not because they’re better, but because there is nothing else.

We must not accept this as inevitable.

The Real Cost—Measured in Loss

• The Indiana Family and Social Services Administration (FSSA) has reported a projected $985 million Medicaid shortfall for FY25–26 (Inside Indiana Business).

• The “Big Beautiful Bill” proposed in Congress would trigger $23 billion in combined federal Medicaid and SNAP losses for Indiana over the next 10 years (Axios).

• ABA therapy reimbursements are being reduced significantly, despite rising demand and confirmed success rates.

But here’s what can’t be measured:

• The emotional toll on a parent who can’t find care for their child.

• The wear on a teacher trying to manage needs they’re not trained or equipped for.

• The loss of dignity when basic needs—food, health care, autonomy—are politicized and stripped away.

What Must Happen Now

This moment demands more than concern—it demands thoughtful, unified action. Here’s where to begin:

• Call your state legislators and Governor Eric Holcomb. Share your story and the impact Medicaid programs, including education reimbursement and home-based services has provided.

• Support frontline organizations: The Arc of Indiana, Autism Society of Indiana, Gleaners Food Bank, and the Indiana Disability Rights Network.

• Share this message. Talk to neighbors, colleagues, and community leaders. Use your voice to amplify the urgency.

We talk often about the people most affected by these policies. But they are not separate from us. They are us. Students. Parents. Educators. Elders. Caregivers.

What’s at stake isn’t just about budgets or bureaucracy.

It’s about people.

Big. Beautiful. People.

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