House Republicans take on Medicaid

Washington Post

13-05-2025

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On Sunday night, Republicans revealed their first draft of a 'big, beautiful bill' House leaders want to get to President Donald Trump's desk ASAP. Part of their plan to offset $4.5 trillion in extending tax breaks from Trump's first term includes $715 billion in cuts to spending on Medicaid and the Affordable Care Act over the next decade. The Congressional Budget Office estimates the plan will push about 8.6 million people off health insurance rolls. The cuts, though objectively large, do not make the deep structural changes to Medicaid that reform crusaders on the right would like.
Where will Republicans land? I'm joined by my Post colleague Catherine Rampell and guest contributor Dominic Pino, a Thomas L. Rhodes journalism fellow at National Review Institute, to discuss the next steps.
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Laura McGann Dominic, as an advocate for Medicaid reform, I might think you'd be optimistic about this bill. But your piece today isn't so much. Why is that?
Dominic Pino The first thing to note is that even under Republicans' current proposal (which is still subject to change), federal Medicaid spending would still increase by around $1.3 trillion over the next 10 years. The budget baseline assumes an increase of just over $2 trillion. Any increase less than that is called a 'cut' by budget-scoring standards, but in real life, we know there's a big difference between slowing a rate of increase and cutting. But I'm not optimistic because Republicans have an opportunity to make more long-lasting structural reforms to the way Medicaid's burden is shared between the federal government and state governments, and they don't seem willing to have that fight. It would be worthwhile to put Medicaid on a more fiscally sustainable trajectory and secure benefits for the most vulnerable, but the politics are too difficult.
Laura Catherine, I assume you are also not feeling positive about the proposal, but for a different reason?
Catherine Rampell Correct. Based on early estimates, this proposal is likely to cause millions more Americans to become uninsured (at least 8.6 million by 2034, per some early CBO estimates leaked by House Democrats). In practical terms, this means millions more people losing access to regular checkups, mammograms, inhalers, cancer treatments, etc., which is always a hardship. But the timing of this could also not be worse. If we're heading into a recession — which is not a fait accompli, but more likely than was the case a few months ago — we will be cutting Americans off from critical benefits precisely when they need them most. And potentially weakening an automatic stabilizer that normally kicks in to help turn the economy toward recovery.
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Laura Dominic, to your point about political fights: Even though the 'cuts' are more about bending the cost curve, at the end of the day, the numbers represent regular people, mostly in red states, in particular, losing their health insurance. How do Republicans resolve this?
Dominic Medicaid is supposed to be an anti-poverty program, especially for pregnant women, poor children and people with disabilities. Policymakers should want enrollment to decline, because they should want people to become richer and stop needing the program. Unfortunately, Trump's signature economic policy, tariffs, is making this argument much harder for conservatives to make because it is making a recession and potentially rising unemployment more likely.
Dominic A second reason enrollment should decline, though, is that many current enrollees are not actually eligible for the program. These are mostly not poor or disabled people, but able-bodied, working-age people who are covered under the ACA expansion. States have every incentive to look the other way on eligibility rules for the expansion population because the federal government reimburses them at a much higher rate than for people who are poor or disabled. This has led to the current situation in which about 700,000 poor or disabled people are on waiting lists while able-bodied ineligible people are enrolled. It's bad for them and bad for the budget.
Catherine To be clear: The numbers I cited were not for declines in Medicaid enrollment alone, but rather increases in total uninsured population. So, they account for people who lose Medicaid potentially switching to other forms of insurance if they can (such as marketplace plans or employer-sponsored coverage). If the goal is to get people off of Medicaid and into other forms of insurance, we should be beefing up those other programs. Instead, the bill's draft language also does not renew enhanced premium subsidies for ACA plans. Trump's 'Marketplace Integrity and Affordability Proposed Rule' will also reduce ACA coverage
Dominic I would also be skeptical of taking CBO estimates on this issue specifically as gospel. They missed big on the effects of Medicaid expansion under the ACA when it was passed. I'm not alleging bias here. It's a hard thing to estimate and well outside CBO's core competence of budgetary impacts. In addition, if states really want to keep more able-bodied people on Medicaid, they always have the option of raising more of their own money to cover the costs. It's supposed to be a joint federal-state program, and the federal share has been growing over time. Federal health-care costs are not sustainable and the deficit is already, as a share of gross domestic product, larger than during the Great Depression.
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Laura Being both optimistic and semi-realistic, where do you each hope the bill lands?
Catherine Honestly, I'd like to see most of the expiring individual-side provisions of the Tax Cuts and Jobs Act sunset, as currently scheduled. But neither party has the stomach for that. (Even President Joe Biden wanted to extend most of the expiring individual-side tax cuts, despite unified Democratic opposition to their passage back in 2017.)
Dominic It's hard to say because the Medicaid portion is only one part of many. If the GOP continues to keep Medicaid's structure mostly the same, entertains raising taxes on the rich, keeps most of the Inflation Reduction Act in place, removes or raises the SALT deduction cap, and generally refuses to make significant spending cuts even after blowout spending during the Biden years, they might find it easier to get Democratic votes than to wrangle their small majority on reconciliation. Kamala Harris basically promised to keep the Trump tax cuts for everyone making below $400,000 (which is 98 percent of taxpayers). Democrats would vote for that.
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Laura Any final thoughts on Medicaid?
Catherine I would say I agree with Dominic that we have serious long-term deficit problems in this country and that there is never the political will to deal with them. But I don't think the solution involves purging millions from Medicaid so we can otherwise reduce taxes. The solution is in acknowledging we need higher taxes, and Medicare reform (so easy!)
Dominic Medicaid is supposed to be an anti-poverty program. Medicaid enrollees are now twice as numerous as the number of people in poverty. Enrollment has tripled in the past 30 years. That isn't sustainable, and health resources are being less focused on those truly in need. If it doesn't get reformed now, it will need to be in the future.
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