GOP faces Medicaid conundrum with clock ticking

Axios

06-05-2025

Republicans in Congress want to make the biggest changes to Medicaid in its 60-year history. But politics and budget math are increasingly raising doubts about whether it's feasible to cut the program to pay for a giant tax package.
Why it matters: Medicaid's growth makes the program a prime target for federal funding cuts. But increased enrollment during the pandemic has also made the program popular enough with voters that it's become something of a political third rail, similar to Medicare.
More than 75% of U.S. adults surveyed in April said they oppose major cuts to federal funding for Medicaid, including more than half of Republicans, according to KFF. Multiple GOP-aligned polling firms have released similar results.
Where it stands: Republican leaders in the House are caught between wary moderates and conservative hardliners in trying to hit a target of as much as $880 billion in Medicaid savings. The party is also struggling with how to reconcile its working-class appeal and cuts to the safety net program that red states have, at least in some fashion, embraced.
President Trump said he wants to "love and cherish" Medicaid but is said to be open to imposing work requirements, and wants Congress to require that drugmakers accept lower prices for Medicaid-covered prescriptions, pegged to what's paid abroad.
"The Trump administration is protecting Medicaid while proposing to slash the waste, fraud, and abuse within the program," White House spokesperson Kush Desai told Axios in an email.
"These reforms, along with our push for a Most Favored Nations policy to reduce drug prices in Medicaid, will increase efficiency and improve care for beneficiaries."
Congress also is still weighing whether to lower the 90% share of federal costs for Medicaid expansion enrollees. Another option being discussed is capping federal funding for expansion enrollees.
The potential for millions of people losing their coverage heading into the midterm election cycle hangs over the deliberations about what to do next.
Many voters "don't want it cut, because they know how important it has been for them, for their families and their neighbors," said Matt Salo, a health care consultant and former executive director of the National Association of Medicaid Directors.
For policymakers backing cuts, "it has become necessary to try to paint the program with as broad a brush as possible — as being so synonymous with waste, fraud and abuse that no amount of change will actually hurt people," he said.
"I really don't think that that is resonating with voters at all."
State of play: A key House committee postponed a critical markup of legislation that was supposed to take place this week, to get more time to figure out a plan for handling Medicaid cuts. The markup is now slated for next week.
The delay signals "that the Medicaid cut number is getting smaller and smaller," Duane Wright, a senior health policy analyst for Bloomberg Intelligence, wrote in an email.
Meanwhile, advocates are hosting a vigil for Medicaid at the U.S. Capitol on Wednesday to protest cuts. More than 1,000 hospital leaders are convening in D.C. for meetings on the Hill, where opposition to Medicaid cuts will likely take center stage, Stat reports.
Work requirements are the big change that people so far find most politically palatable. More than 60% of adults support work requirements as a condition of Medicaid eligibility, per a February KFF poll.
The majority of non-senior adults on Medicaid already work. In order for work requirements to generate savings, they have to involve people being removed from Medicaid.
Real-world evidence from Arkansas' brief implementation of work requirements in 2018 resulted in people losing Medicaid coverage without any statistically significant increase in employment.
What to watch: The lack of consensus is raising questions about whether the GOP can make good on Speaker Mike Johnson's vow to vote on the tax package by the Memorial Day recess.
"They're not going to walk out of there with zero" cuts, Salo said. But slashing $880 billion in federal Medicaid spending is also unrealistic for Congress at this point, he added.