A number of changes to safety net programs, particularly Medicaid (MaineCare) and the Supplemental Nutrition Assistance Program (SNAP) will lead to more than $400 million less in federal funding flowing to the state of Maine each year as people lose health care and food assistance, and as the federal government requires states to pick up more of the costs of providing assistance to the remaining population that qualifies.
These cuts will hit rural Maine particularly hard, since people in those areas are more likely to live below or near poverty and more likely to need the help offered by safety net programs.
The loss of such a substantial amount of federal funding will have ripple effects throughout the economy. Not only will this directly impact health care providers and grocery stores, but other parts of the economy will suffer as the directly impacted businesses reduce their spending and lay off employees. The total impact is a loss of almost half a billion dollars in statewide gross domestic product and an estimated 4,000 jobs throughout Maine.
This creates a harmful spiral of economic contraction which leads to more people needing help but being unable to get it because they can’t meet the bill’s new work requirements.
The cuts include:
- Loss of Medicaid coverage for 34,000 Mainers who are expected to fail the new “work requirements.” This will reduce federal funding in Maine by $215 million.
- Loss of federal matching funds for Maine as a penalty for providing coverage to some immigrant populations. Assuming Maine continues to provide this coverage, and after accounting for the loss of the 34,000 individuals mentioned above, this results in $47 million in lost federal funding.
- Loss of SNAP eligibility for 31,000 Mainers who will fall under an expanded “work requirement” in that program but likely will be unable to meet it. This results in $66 million in lost federal funding each year.
- A new requirement that states pay up to 25% of the cost of SNAP benefits and 75% of the costs of administering the program will lead to Maine receiving $80 million less in federal funding to support the program each year.
- Failure to renew the Affordable Care Act’s enhanced subsidies for individuals purchasing insurance through the private market, which expire at the end of the year. The expiration of these subsidies will cost Mainers $26 million each year in increased insurance premiums. The overall effect on the state economy will be slightly offset by a small portion of the population which loses Medicaid enrolling in subsidized private plans, but the net impact is still a decrease in federal funding of $15 million per year.
Maine’s Congressional Districts are roughly equivalent in population but the harm from the bill disproportionately hits the more rural second congressional district, which bears approximately 60% of the funding and job losses.
See below for detailed methodology. Numbers may not sum due to rounding.
The House Reconciliation bill is a cruel instrument that will hurt tens of thousands of Mainers directly by cutting their health care and food assistance in the service of giving more tax cuts to billionaires and large corporations. It’s also a recipe for economic hardship for all of us, particularly in rural Maine, where communities will see businesses closed and thousands of people laid off as a result. It should be stopped.
Methodology
Numbers of Mainers losing Medicaid and SNAP benefits due to expanded work requirements were based on estimates from the Center on Budget and Policy Priorities, including Congressional District-level estimates.
Lost funds via Medicaid disenrollment were based on an average annual per-person Medicaid cost of $7,039 for adults in the expansion population in the fourth quarter of 2023, according to data from the US Centers for Medicaid and Medicare Services. The federal government’s share of these costs in Maine is 90%, or $6,335 per person.
To calculate lost federal funding as a penalty for Maine’s coverage of some immigrant populations, the population expected to disenroll as a result of work requirements was removed from the current Medicaid expansion population of 100,654. MECEP obtained this number from the Maine Department of Health and Human Services for enrollment in December 2024, along with the distribution by ZIP code, which allows for an allocation of the population to each Congressional District. Once the revised population was estimated, the cost of the reduced matching rate was calculated at a 10% cost per remaining individual, or $704 per person per year.
To calculate the lost federal funding for disenrollment in the SNAP program, MECEP used data from Maine’s Office of Family Independence in December 2024, which provided a per-person monthly benefit of $174, equivalent to $2,088 per year.
To calculate the impact of the 25% cost shift to Maine, the same OFI data was used to allocate current SNAP recipients to each of Maine’s Congressional Districts. These numbers were then adjusted to account for the expected disenrollment due to work requirements. The cost of a 25% cost shift was estimated at $522 per remaining SNAP beneficiary per year.
The additional administrative costs to the state were based on the US Department of Agriculture’s State Activity Report for 2023 and assumes the state would need to pay an additional 25% of the total administrative cost of $27.7 million. These lost funds were not allocated by district and only included in the statewide total.
To calculate the impact on subsidies for health insurance under the Affordable Care Act, MECEP began with estimates from the Commonwealth Institute that not extending the enhanced subsidies beyond 2025 would result in $26 million of lost funding for Mainers. This would be offset by a small number of those who lose Medicaid coverage enrolling in the Marketplace. The Congressional Budget Office estimates that nationally, Marketplace coverage will increase by 5% of the total number of people losing Medicaid coverage, and according to KFF, 85% of Marketplace enrollees in Maine received an After Premium Tax Credit in 2024, the value of which averaged $607 per month in 2025, according to CoverME’s annual report. MECEP therefore assumed that 5% of the 34,000 people losing Medicaid coverage (1,700) would enroll in the Marketplace, of whom 85% (1,445) would receive an APTC averaging $607 per month ($7,284 per year). APTC impacts were allocated between Congressional Districts based on the ratio of Medicaid losses in each district.
To calculate GDP impact and job losses, MECEP used previous estimates from the Commonwealth Institute for the ACA subsidies and Medicaid/SNAP which ultimately derive from the IMPLAN economic impact model. Commonwealth numbers were adjusted to reflect MECEP’s new estimates of total funding lost.
