The failure of House Republicans to approve new health care legislation Friday was met with relief in Massachusetts, which stood to lose billions of dollars in critical federal funding under the bill. But that doesn’t mean the state is worry-free when it comes to paying for medical care that is considered both high quality and high cost.

Most pressing, the state faces significant financial challenges with its Medicaid program, called MassHealth, which covers low-income residents. Enrollment has swelled as the program is used to provide coverage to more than just the state’s poorest denizens. It now includes more than 1 in 4 residents, or 1.9 million people. That’s up from 1.1 million people a decade ago.

The costs of MassHealth, split between the state and federal governments, have doubled over the past decade and now account for roughly 40 percent of state spending — leaving fewer tax dollars for education, transportation, and other priorities.

And, in a troubling trend for the state budget, MassHealth rolls have been growing while the share of people covered by commercial insurance has been dropping, according to Governor Charlie Baker’s administration.

“Our challenges would have been unfathomable had this bill passed,’’ said Lynn Nicholas, president of the Massachusetts Health and Hospital Association, whose members are paid less by MassHealth than by private insurers for the same services. “With some certainty and the knowledge that the rug is not going to be pulled out from under us, we can double down now and focus on how to address [MassHealth].’’

Baker, in a statement on Friday, stressed the need for “flexibility’’ from federal officials to address health care issues at the state level.

The governor, a moderate Republican who did not support President Trump and has been critical of some of his policies, finds himself in a bind.

On the state level, he has angered businesses by proposing they shoulder new fees to pay for MassHealth. At the federal level, he is dependent on the flow of Medicaid dollars to a state whose all-Democratic congressional delegation is vociferously opposing the president and the GOP-controlled Congress. Without that money, MassHealth would eat up an ever larger part of the state budget.

It’s critical for the state to get health care spending under control, said Lora M. Pellegrini, president of the Massachusetts Association of Health Plans. “The growth in MassHealth has been staggering. Absolutely, something needs to be done.’’

Massachusetts passed its own health care overhaul more than a decade ago, which included a mandate that all residents obtain insurance. That was the model in 2010 for the federal Affordable Care Act, or Obamacare, which extended insurance coverage to millions of additional Americans through Medicaid or private insurance plans. But Trump and many other Republicans blame Obamacare for driving up medical costs and imposing onerous mandates, and they vowed to repeal and replace the law.

Republican leaders in Congress drafted a bill that would have gutted key pieces of Obamacare, but they canceled their vote Friday after failing to muster enough support in their own party. Baker said he was pleased that the vote was called off.

“This bill would drastically affect the Commonwealth’s ability to ensure essential care for thousands of people,’’ he said.

The withdrawal of the Republican bill elicited a collective sigh of relief from health care groups, government officials, and others in Massachusetts.

“The fact that this bill appears to be dead removes one serious threat that the state was facing,’’ said Noah Berger, president of the Massachusetts Budget and Policy Center.

At the offices of Health Care for All, an advocacy group, there were smiles and high-fives as staff watched Speaker Paul Ryan’s press conference announcing the bill had been withdrawn, said Brian Rosman, director of policy and government relations.

Rosman said the Republican bill would have thrown 600,000 Massachusetts residents off health insurance, and the proposed cutbacks in Medicaid would have been devastating for the elderly, disabled, and children.

James W. Hunt Jr., president of the Massachusetts League of Community Health Centers, said in an interview he was “very, very pleased’’ that the GOP decision is allowing “at least more time to have a dialogue about how this impacts people who are very vulnerable.’’

The state’s 50 community health centers serve 966,000 people, many of whom rely on subsidized health insurance or Medicaid, two programs the bill would have slashed.

Doctors, hospitals, and insurers also expressed relief that the current law would remain in place.

“Without question, this bill would have been harmful to our patients — including the most vulnerable — and to our members’ ability to provide them quality care,’’ Dr. James S. Gessner, president of the Massachusetts Medical Society, said in a statement.

But uncertainties remain. Nicholas, of the state hospital association, said hospitals are concerned about “continuing efforts’’ to dismantle the current law and slash Medicaid funding.

John E. McDonough, a professor at the Harvard T. H. Chan School of Public Health, said the Trump administration still could try to undermine the current law, especially the insurance marketplaces where millions of Americans now purchase coverage with the help of government subsidies.

“The state can breathe more easily — at least for the time being — in terms of major statutory changes to Medicaid,’’ he said. “The part of the ACA that is most at risk now is the private insurance subsidies. . . . A deliberate effort on the part of the administration to undermine and destabilize the subsidized and nonsubsidized individual market in the United States is probably the highest threat that we face.’’

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal. Felice J. Freyer can be reached at felice.freyer@globe.com. Follow her on Twitter @felicejfreyer