House Republicans approved a budget proposal in February that could cut at least $880 billion from Medicaid, the largest cut to the program in U.S. history.
These cuts are part of the GOP’s agenda to carry out President Donald Trump’s multi-trillion dollar tax plan. Republican lawmakers are trying to find ways to reduce federal spending in order to finance $4.5 trillion in tax cuts for higher-income households and corporations.
Now, House and Senate Republicans are working to create a combined Budget Reconciliation bill, which they need to avoid a filibuster by Senate Democrats. This is a complicated and lengthy process, and Republican Senators have already drafted their own budget plan that proposes fewer cuts but would raise the U.S. debt limit by $5 trillion.
If the House’s plans make it into the final bill, these cuts to Medicaid would exceed those made by all previous Budget Reconciliation bills combined.
What would happen to Medicaid, according to the House bill?
The House’s budget reduces federal spending by a total of $2 trillion. At least $880 billion would come from the House Energy and Commerce Committee, which oversees Medicare and Medicaid.
To reduce spending by that amount, the House Energy and Commerce Committee would need to make major structural changes to these programs. One idea Republican lawmakers have floated is adding work requirements, which means adults aged 19 to 55 would have to participate in “work-related activities” for at least 80 hours a month to qualify for benefits.
But roughly 92% of Medicaid enrollees are already working, or exempt from working due to school, caregiving responsibilities, or illnesses. Adding these work requirements would only save the federal government around $109 billion, according to the Congressional Budget Office.
Republicans are also considering scrapping the Medicaid funds that were granted through the Affordable Care Act, which expanded coverage for low-income working adults who make up to $21,597 a year.
Another idea, proposed by the Republican Study Committee’s 2025 Budget, is turning Medicaid into a block grant program. States would receive a fixed amount of funding for Medicaid each year, far below what they’d usually get, which would then put pressure on them to downscale their Medicaid programs.
Downscaling could mean providing coverage to fewer people, eliminating benefits, or lowering payment rates for providers.
Does Trump support cutting Medicaid?
Trump has said he will not cut Medicaid except in cases of “fraud and abuse.” But the Congressional Budget Office, a nonpartisan bookkeeper for Congress, has confirmed that his tax agenda will not be possible without major cuts to Medicaid or Medicare.
The Government Accountability Office estimated that states only issued about $50.3 billion in improper Medicaid payments in 2023, far below the goal of $880 billion in savings. Critics have also stated these payments wouldn’t even qualify as fraud or abuse, since most of them were due to “missing or insufficient documentation” that could later be corrected.
How many people will be affected by these cuts?
One in four Americans, which is roughly 79 million people, currently rely on Medicaid and its related Children’s Health Insurance Program (CHIP) for essential, lifesaving healthcare. Medicaid funds nearly half of all U.S. births, around two-thirds of nursing home residents, and thousands of hospitals and community centers across the country.
Cuts to Medicaid would also affect the 68 million people enrolled in Medicare, the federal health insurance program for people age 65 or older.
30% of Medicaid dollars directly support Medicare recipients, covering their co-insurance, co-pays, and deductibles, and covering premiums for one in six enrollees. It also helps over 10 million seniors and people with disabilities by increasing their income by 10-20%.
If Republicans scrap the expanded Medicaid funding provided by the Affordable Care Act, an analysis from the Urban Institute estimated that 15.9 million people would lose their coverage.
63,000 people would lose coverage just in California’s 45th Congressional District, which includes Garden Grove, Little Saigon, Westminster, and other parts of Orange County, home to the largest Vietnamese population in the United States.