What happens when a household gets hit with a new bill, but the paycheck stays the same? Families sit down at the kitchen table and make tough choices. They cut back on school clothes, skip car maintenance, or delay doctor visits to make ends meet. The money has to come from somewhere.
This is the same challenge Georgia will face when the legislature reconvenes in January. Federal changes under H.R. 1 (2025) will shrink the opportunities that states have for federal funding for Medicaid beginning in 2026. That means Georgia’s household budget will be squeezed, forcing lawmakers and agency leaders to decide how to cover Medicaid’s rising costs without sacrificing other essential programs.
Here at the Cover Georgia coalition, we know that a central part of a fiscally responsible solution is to expand Medicaid. Doing so would increase the amount of Medicaid funding available to Georgia, protect essential health care services, and prepare the state for the shifts coming in 2026 and beyond.
The household budget squeeze
Just like a family facing a pay cut or a new monthly bill, Georgia cannot ignore Medicaid’s costs. Medicaid is one of the largest line items in the state budget, and federal law requires the state to pay its share. When Washington sends less money, Georgia must fill the gap or make cuts.
That puts our health and health care at risk. When states need to save money on Medicaid, the choices they are often faced with include:
- Limiting the services and care available to Medicaid members. Some Medicaid services that are legally “optional” include prescription medicines, physical therapy and similar services, and inpatient mental health care for youth
- Cutting (or keeping flat) the amounts that doctors and hospitals are paid for the care and services they deliver to Medicaid members. This would endanger doctors’ offices and hospitals that are already barely surviving financially. Clinics and hospitals would be forced to stop offering certain services or close their doors altogether.
- Limiting the number of Georgia seniors and people with disabilities who are able to receive home- and community-based services through Medicaid. When home- and community-based services are limited, seniors and people with disabilities are forced to live in nursing homes, mental health facilities, or other institutions rather than in their own communities.
- Make cuts to other public services and programs that Georgians need–Georgia leaders could decide to redirect funding that currently goes towards job training programs, foster care, and food assistance, or other government-run programs to Medicaid. Georgia families benefit from all of these public investments, so this choice would also hurt Georgians
We are already seeing the consequences of Medicaid funding cuts in Lavonia, GA, where St. Mary’s Health System announced they are closing its labor and delivery unit. When hospitals close services like these, it puts entire communities at risk and forces families to travel farther for care they once had close to home. Yet rather than expanding Medicaid to strengthen hospitals and protect patients, state leaders chose to fund a costly and ineffective alternative.
Georgia families know how to make smart budget choices. Georgia should do the same: expand Medicaid.
Georgia’s costly expense that isn’t worth paying for
In 2023, Georgia’s leaders created a new Medicaid program called Pathways to Coverage. Two years later, the program’s results show that it is too difficult for Georgians to enroll in and too expensive for Georgia to keep investing in.
According to new analysis from the Georgia Budget and Policy Institute (GBPI):
- Only 8,077 Georgians were actively enrolled by June 2025, just 6 to 7 percent of uninsured, low-income adults from working households (Chan, 2025)
- About 54 percent of Georgians who tried to apply could not finish the process, not because they weren’t working, but because the application portal made it difficult to report or verify the required 80-hour monthly activity requirement.
- Nearly one-third of disenrollments were due to paperwork barriers such as missing documents or unreturned renewal forms.
- The program cost taxpayers about $110 million, and less than $1 in every $3 dollars went toward actual health care, like doctor visits or prescriptions.
- Despite tens of millions spent on marketing and outreach, enrollment barely grew in the second year.
Even with new federal approval to extend Pathways through December 2026 and modest tweaks like annual instead of monthly reporting, the state projects only 18,000 enrollees by late 2026, leaving hundreds of thousands of Georgians uninsured (Chan, 2025).
After two years and $110 million, Pathways has reached fewer than 10,000 people.
Federal changes make Pathways obsolete
The new federal budget and tax law, also known as H.R.1 or the One Big Beautiful Bill Act, overhauls how states fund and administer Medicaid starting in 2027. One of the federal changes forces states to impose a national work reporting structure similar to Pathways.
The new work reporting requirements will be problematic in some of the same ways that Pathways is–by keeping eligible people from enrolling altogether or kicking people out because of paperwork errors.
While Georgia leaders will have limited power to ease these challenges for uninsured Georgians, they do have the opportunity to make better financial decisions for the state. Gov. Kemp and Georgia legislators could adopt Medicaid expansion, which would mean allowing adults with incomes between $15,650-$21,597 (101-138% of the federal poverty line) to enroll in Medicaid instead of restricting it to adults making less than poverty-level wages.
If Georgia leaders make this change, the federal government would pay for 90 percent of program costs compared with the 66 percent that they currently pay for Pathways (Chan, 2025). Georgia would save its own money and bring in more federal Medicaid money with this change.
Medicaid expansion would save money for Georgia and cover more Georgians.
Medicaid expansion is the best budget choice for Georgia
When lawmakers return in January, they face a clear choice:
- Option 1: Stick with Pathways and watch costs rise as federal funding shrinks.
- Option 2: Expand Medicaid, bringing billions of new federal dollars into the state and protecting Georgia’s budget from deeper strain.
Expanding Medicaid is smart policy and smart budgeting. It would:
- Bring billions in new federal funding to offset state costs.
- Cover thousands of uninsured adults, empowering them to affordably see a doctor and get prescription medicine when they need to.
- Strengthen hospitals and clinics, especially in rural areas, by increasing their number of insured patients and reducing uncompensated care.
- Free up Medicaid dollars for other important health services and priorities
The second leg of the 2025 to 2026 legislative session begins in January. Lawmakers will have 40 days to decide how Georgia will respond to these federal changes.
This is a moment for state leaders to act decisively. By expanding Medicaid, they would make the most of our tax dollars, protect families, and strengthen essential services. If they instead delay or cling to failed policies like Pathways, Georgia will face deeper cuts and more instability when H.R. 1 takes effect.
A call to action
The Cover Georgia coalition calls on lawmakers to make Medicaid expansion their first financial step in 2026. Families know what it means to balance a household budget and to make smart long-term investments instead of scraping by month to month. Georgia’s leaders should do the same.
Georgia’s families deserve stability. Medicaid expansion delivers it.
References
Chan, L. (2025, October 13). Pathways to Coverage: Looking Back Two Years and Into the Future. Georgia Budget and Policy Institute. Retrieved October 24, 2025, from https://gbpi.org/pathways-to-coverage-looking-back-two-years-and-into-the-future/