Legal Challenges Arise for States with Medicaid Expansion Enshrined in Constitutions

As federal discussions threaten to reduce Medicaid funding significantly, some states face a unique dilemma because they have constitutionally mandated Medicaid expansion. Voters in Missouri, Oklahoma, and South Dakota have legally enshrined Medicaid expansion into their state constitutions, requiring their programs to provide coverage for adults earning up to 138% of the federal poverty level (about $21,597 in 2025). These states are among over 40, including the District of Columbia, that expanded Medicaid under the 2010 Affordable Care Act, with the federal government covering 90% of the costs.

However, Congressional proposals to cut Medicaid federal funding by approximately $880 billion could jeopardize this arrangement. One potential approach by Congress would be to reduce the federal match rate from 90% to levels applicable to traditional Medicaid populations, which range between 50% to 77% depending on the state. This would leave states responsible for covering a substantial $626 billion over the next decade to sustain the expansion population, or about 20 million people.

While several states have laws that would automatically retract Medicaid expansion if federal funds decrease, the constitutional amendments in Missouri, Oklahoma, and South Dakota present a significant obstacle. These amendments require legislative action and voter approval to alter, effectively locking in Medicaid expansion regardless of federal funding changes. As a result, state legislators cannot simply adjust eligibility criteria or benefits; they must seek voter approval for amendments—a process that complicates rapid policy adjustments.

Medicaid constitutes a vital part of state budgets, with states typically spending about a third of their total budgets on the program, including federal contributions. When voters approved Medicaid expansion in Missouri in 2020, state lawmakers initially declined to fund it. This led to legal action, resulting in a Supreme Court ruling that mandated the state to finance its Medicaid expansion. Currently, Missouri allocates around $18.2 billion for Medicaid in 2025, with federal funds covering approximately 70% of this amount.

Should federal funding decrease, Missouri faces a potential deficit of around $1.7 billion next year alone. Policy experts like Timothy McBride suggest options such as increasing taxes, reducing enrollment, lowering reimbursements to providers, or eliminating optional services—although these measures face political and practical hurdles. Cutting payments to providers could threaten hospitals, which had already lost ten facilities in recent years.

Interestingly, the threat of federal cuts has led some conservative lawmakers to reconsider their stance. Senator Josh Hawley of Missouri, once opposed to the Affordable Care Act, now opposes Medicaid benefit reductions, recognizing the extensive coverage it provides to residents.

Meanwhile, in Oklahoma and South Dakota—both of which also have constitutional amendments mandating Medicaid expansion—progressive and conservative voices debate proposed policy changes. Some critics view constitutional amendments as inflexible, making it difficult to respond swiftly to federal policy shifts, while supporters argue that these amendments effectively safeguard Medicaid expansion from political rollback.

As debates continue, the prospect of federal funding cuts may push more states to consider constitutional measures to ensure the sustainability of Medicaid expansion, highlighting a critical intersection between federal policy, state constitutional law, and health coverage for millions of Americans.