Beyond Health: Potential Impact on Foster Youth of $880 Billion in Medicaid Cuts
The House of Representatives’ budget resolution takes up to $880 billion from the Medicaid program over ten years—cuts that would be devastating for young adults aging out of the foster system.
This commentary is part of TCF’s Beyond Health series, which discusses the many potential harms of up to $880 billion in potential Medicaid cuts across issue areas.
The U.S. House of Representatives, with only Republican votes, passed a budget resolution on February 25, 2025 that takes up to $880 billion from the Medicaid program over ten years. These cuts would clearly and deeply harm health coverage, services, and state budgets. But that’s not where the damage ends.
Deep Medicaid cuts would be devastating for young adults aging out of the foster system. Medicaid provides medical coverage for the vast majority of foster youth—cuts will impact not only children in the foster system but also those aging out. Significant cuts to Medicaid will make the transition to adulthood even harder for foster youth as they enter adulthood without the safety net and support system most young adults have. Without consistent health care coverage, they are at greater risk of untreated medical and mental health conditions.
When young people in the foster system are not reunified with their families, adopted, or placed with a guardian, they age out of the foster system at age 18 or 21 and are thrust into the world, often completely on their own. Transitioning to adulthood is a major challenge for former foster youth: about one in four youth will experience homelessness within four years of aging out, and many have low earnings—in California, for example, foster youth who aged out had average monthly earnings of just $690. Juggling basic access to health care would add an overwhelming additional burden to this already harsh reality.
The need for health care, specifically mental health care, is great among foster youth. Young people with foster system experience have post-traumatic stress disorder rates (PTSD) twice as high as war veterans. Up to 80 percent of this population suffers from mental health challenges, far more than the 18–22 percent in the general population of children. Health care is not optional for these young adults.
Medicaid coverage has been available to foster youth in varying capacities since 1999, first through state option via the Chafee Foster Care Independence Act and then through the Affordable Care Act (ACA) and SUPPORT Act, which expanded low-income adult coverage and provided categorical coverage for foster youth aging out of the system through age 26. Research has shown that the low-income expansion and the categorical foster youth extension has increased coverage by more than 13–14 percent and 5 percent, respectively. There were also correlations found between Medicaid coverage and increased referrals for substance use disorder treatment, increased employment, and reduced incarceration rates making the case that Medicaid coverage for former foster youth can have far-reaching benefits, even beyond health care.
Medicaid coverage is an essential source of support and well-being for former foster youth. If Medicaid is cut, it means that a young adult who has aged out of the system who is working two jobs just to stay afloat, may suddenly lose access to therapy, medication, or even a simple doctor’s visit. For youth aging out of the foster system, there is no backup plan. Slashing Medicaid funding by $880 billion is not only a dangerous policy decision, it is a direct attack on the well-being of vulnerable young people.
