House Republicans Consider Major Medicaid Cuts Amidst Tax Break Talks
The potential for significant changes to Medicaid is on the horizon as House Republicans weigh substantial spending cuts. These reductions aim to support tax breaks for high-income earners and align with other conservative priorities.
According to a report by Punchbowl News on January 24, a private meeting among House Republican committee chairs outlined possible spending cuts ranging from $2 trillion to $3.5 trillion. These cuts are intended to finance an upcoming reconciliation bill.
Key proposals include instituting a per capita cap on Medicaid, which would restrict federal funding to states for Medicaid administration, alongside introducing work requirements for Medicaid recipients.
The Congressional Budget Office estimates that implementing work requirements could lead to around 600,000 Americans losing their health insurance. While the exact impact of a per capita cap is less certain, the Kaiser Family Foundation forecasts a reduction in services.
Medicaid currently provides health insurance to over 70 million Americans, with approximately 12 million also enrolled in Medicare.
The reconciliation bill in question is designed to adjust federal spending, taxes, or the debt ceiling to meet budgetary targets. This bill is expected to reauthorize the 2017 Tax Cuts and Jobs Act, which previously reduced taxes mainly for higher income groups and large corporations.
Cutting Medicaid marks a departure from campaign promises made by some Republican lawmakers, including former President Donald Trump.
In June 2023, Trump stated, “We’re not going to play around with Social Security, and we’re not going to play around with Medicare, Medicaid,” emphasizing his commitment to protecting these programs for seniors, as reported by The New York Times.
Trump made a similar pledge during his 2016 campaign, though his subsequent actions did not align with this promise.
In 2017, Trump supported a repeal of the Affordable Care Act that aimed to cut Medicaid by $880 billion, but the repeal ultimately failed. Further, in 2020, the Trump administration sought to enable states to impose work requirements for Medicaid, an initiative later overturned by the Biden administration.
Plans for Medicaid per capita caps and work requirements are also featured in Project 2025, a policy agenda from the Heritage Foundation. Although Trump denies links to Project 2025, it was crafted by several of his close affiliates.
Russell Vought, a key figure behind Project 2025, was nominated by Trump to head the Office of Management and Budget. During his Senate confirmation hearing on January 22, Vought expressed support for Medicaid work requirements.
