Potential Medicaid Cuts Considered as House Republicans Explore Budget Adjustments
In efforts to fund new tax breaks and address other conservative priorities, House Republicans are contemplating significant reductions in Medicaid spending.
According to a report by Punchbowl News on January 24, Republican leaders in the House have been discussing potential spending cuts ranging from $2 trillion to $3.5 trillion. These cuts are intended to support an upcoming reconciliation bill.
Among the possible changes is the introduction of a per capita cap on Medicaid, which would restrict federal funding allocated to states for Medicaid administration. Additionally, work requirements for Medicaid recipients have been suggested.
The Congressional Budget Office projects that implementing work requirements could lead to approximately 600,000 Americans losing health insurance. While the exact effects of a per capita cap are uncertain, the Kaiser Family Foundation foresees a reduction in services.
Currently, over 70 million Americans receive health coverage through Medicaid, with about 12 million also participating in Medicare.
The reconciliation bill under negotiation aims to adjust federal spending, taxes, or the debt ceiling to meet budget objectives. Notably, it may include a reauthorization of the 2017 Tax Cuts and Jobs Act, which primarily benefited high-income individuals and large corporations with tax reductions.
For some Republican lawmakers, including former President Donald Trump, cutting Medicaid contradicts previous campaign commitments.
“We’re not going to play around with Social Security, and we’re not going to play around with Medicare, Medicaid,” Trump asserted in June 2023. “I will always protect Medicare and Social Security for our great seniors.”
Trump echoed this promise during his 2016 campaign, although it was not upheld. In 2017, he supported an Affordable Care Act repeal that aimed to cut Medicaid by $880 billion, which ultimately failed.
In 2020, the Trump administration attempted to enable states to impose work requirements for Medicaid, a move that faced legal challenges and was later revoked by the Biden administration.
Per capita caps and Medicaid work requirements also feature in Project 2025, a policy agenda from the Heritage Foundation. While Trump denies connections to Project 2025, it includes contributions from several of his allies.
Trump nominated Russell Vought, a key figure in Project 2025, to head the Office of Management and Budget. Vought expressed support for Medicaid work requirements during his Senate confirmation hearing on January 22.
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