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News Brief

May 8, 2025 |  By: Iowa News Service

Proposed cuts to Medicaid would negatively impact the child-care workforce

A new report by the Georgetown University Center for Children and Families says the Trump administration's proposed cuts to Medicaid would hobble Iowa's child-care workforce, where nearly 38-percent of employees who work in the sector rely on federal benefits. Common Good Iowa Executive Director Anne Discher says cuts to Medicaid would further cripple already low child-care worker wages in the state.

"We have a really stressed child-care system right now and it really represents what I can only call market failure. What parents can afford to pay for child-care doesn't add up to living wages for child care workers. It affects child-care workers subsidize our child-care system right now through their low wages.", says Discher.

Most states, including Iowa, would face a choice between raising taxes to make up for the Medicaid shortfall and reducing education spending, which is the largest share of Iowa's budget.


The National Association for the Education of Young Children's Daniel Hains says nationwide, child cares costs are rising for families and the programs that provide services, especially over the past year.

"Programs are reporting that they're paying more for rent. They're paying more for insurance, liability and property insurance. They're also having to pay more for retaining staff with the public funding that has dried up in the sector.", sayd Hains.  

KFF Health data show Iowa stands to lose about 731-million dollars in Medicaid funding if the Trump administration cuts are enacted. The administration says it is working to follow through on a campaign promise to lower government spending.