Medicaid cuts inch closer

Politico

15-05-2025

Presented by HCA Healthcare
Driving The Day
MARATHON MARKUP CONCLUDES — After a 26-and-a-half-hour markup, Republicans on Wednesday advanced the health care section of the GOP's sweeping tax bill that would slash Medicaid spending by hundreds of billions of dollars, POLITICO's Ben Leonard and Alice Miranda Ollstein report.
The House Energy and Commerce Committee, in a 30-to-24 party-line vote, advanced a draft bill that would make major changes to Medicaid while omitting many of the most controversial changes initially considered — appealing to moderate Republicans worried about triggering coverage losses that would spark political blowback in swing districts.
But hard-liners elsewhere in the GOP conference are still demanding even steeper cuts and complain the bill's work requirements don't kick in until 2029. Republican leaders will have to decide how to handle those disagreements before the full House votes on the legislative package — tentatively scheduled for next week.
Why it matters: The Medicaid portions of the GOP megabill would already lead to 10.3 million people losing coverage under the health safety-net program and 7.6 million people going uninsured, according to partial estimates from the CBO released by committee Republicans.
GOP leaders could also struggle to get a provision in the E&C draft bill defunding Planned Parenthood over the finish line. Several centrist Republicans not on the committee oppose targeting the organization, which provides contraception, testing for sexually transmitted infections and other health services in addition to abortion.
The daylong markup: During the marathon markup that started Tuesday evening, Republicans voted down a slew of Democratic amendments, which included stripping out or softening provisions to impose Medicaid work requirements and charging Medicaid recipients co-pays of up to $35 for health services. Meanwhile, Democrats railed against both GOP policies, arguing they punish the poor to finance tax cuts for the rich.
Chair Brett Guthrie (R-Ky.) and committee Republicans defended the provisions as fiscally responsible and politically popular and argued they have learned from states' rocky implementation of work requirements when crafting the legislation.
Democrats grilled their GOP counterparts and the committee's Republican counsel on how the provisions would function in practice — asking how soon patients would be subject to work requirements after being hospitalized for a mental health crisis and what counts as disability that qualifies someone for an exception.
'Everyone will suffer,' Ohio Democratic Rep. Greg Landsman said. 'The result will be millions and millions of people who won't get health insurance, and most of them are probably eligible.'
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In Congress
RFK'S DAY ON THE HILL — Facing a key Senate panel Wednesday, HHS Secretary Robert F. Kennedy Jr. sought to reassure Republicans that he's protecting critical programs amid the Trump administration's mass reorganization of the agency, POLITICO's Lauren Gardner and Carmen Paun report.
Kennedy made his case for the more than $30 billion budget cuts President Donald Trump is proposing during a Health, Education, Labor and Pensions Committee hearing — his first public appearance in the Senate since his confirmation as HHS secretary in February.
Kennedy said the cuts would right-size agencies that grew too rapidly during President Joe Biden's term and weren't doing enough to improve Americans' health.
'It's clear the status quo does not work,' Kennedy told the committee. 'Bureaucratic bloat [and] regulatory hurdles at the Department of Health and Human Services have made it harder to deliver critical services.'
Why it matters: The HELP Committee oversees the government's health agencies, and senators' comfort level could determine whether they let the administration make the deep cuts Trump has proposed for later this year.
Back and forth: Kennedy's exchanges with Republican senators were cordial, a stark contrast with his fiery responses to Democrats' questions about halted clinical trials, vaccine safety and his hiring of an unlicensed researcher and vaccine skeptic, David Geier, to be a contractor studying the Vaccine Safety Datalink — a CDC project monitoring vaccine side effects.
Democrats pressed Kennedy on policies and statements he's made that they argue undermine Americans' confidence in the safety and effectiveness of vaccines. Kennedy, a known vaccine skeptic, doubled down on his statements suggesting the measles vaccine wasn't tested for safety and that it contains aborted fetal debris — neither of which is accurate.
'All true,' Kennedy told Sen. Chris Murphy (D-Conn.). 'You want me to lie to the public? Of course it's true.'
The panel's chair, Republican Bill Cassidy of Louisiana, later said Kennedy was wrong to say that no vaccines except Covid-19 shots have been evaluated against placebos.
Read the rest of the hearing's takeaways here.
At the Agencies
A NEW STRATEGY — The Centers for Medicare and Medicaid Services' Innovation Center rolled out a new strategy Tuesday to test alternatives to the models it uses to pay Medicare and Medicaid providers, POLITICO's Robert King reports.
Existing and future payment models will include new prevention and health promotion services, which could mean rewarding doctors for promoting physical activity and good nutrition, offering vaccines and screening for cancer.
'Prevention is the cornerstone of healthy living,' according to a post on CMMI's website by its director, Abe Sutton. 'The innovation center will incentivize preventive care and health promotion to help people avoid illness and optimally manage chronic disease.'
Sutton wants to test tools like mobile apps, which could help patients manage chronic conditions.
Why it matters: The strategy is a marked shift from the Biden administration, which relied on CMMI to test methods to close gaps in health equity, which often focused on race, gender and sexual orientation. The Trump administration has ended programs it deems furthering diversity, equity and inclusion goals.
The rollout also aligns with HHS Secretary Robert F. Kennedy Jr.'s agenda — which has been centered on lowering chronic disease rates and touting preventive measures such as better eating and healthier living as a way to reduce obesity and diabetes rates.
Background: The Affordable Care Act created the center in 2010, and both Democratic and Republican administrations have relied on it to implement health policy. CMMI runs voluntary and mandatory payment models that incentivize value-based care, which pays providers based on health outcomes instead of for each service.
Sutton is attempting to reorient CMMI amid significant pushback from some congressional Republicans who say the payment models have not generated enough savings.
Eye on Insurers
IRA IMPACTS — The Inflation Reduction Act's changes to Medicare's prescription drug benefit — designed to lower drug costs — might have an unintended effect: fewer coverage options for older Americans, according to a research letter published Wednesday in JAMA.
In 2025, the IRA capped out-of-pocket spending on prescription drugs in Medicare Part D at $2,000 annually. The legislation, signed into law in 2022 by former President Joe Biden, is associated with more insurers exiting the Part D marketplace in 2023 and 2024 than in previous years — as the plans were set to face more financial responsibility for managing patients with high drug costs, according to researchers from Boston's Brigham and Women's Hospital and Harvard Medical School.
The findings: From 2018 to 2023, up to 2.3 percent of Medicare beneficiaries lost their Part D insurer the following year, compared with 7.5 percent of beneficiaries in 2024.
Compared with 2018, the adjusted odds ratio of experiencing an insurer exit in 2024 was nearly 14 percent.
Why it matters: While the IRA provision was aimed at lowering out-of-pocket costs for Medicare enrollees, it could be leading to more limited coverage options and less competitive Part D marketplaces, according to the research letter. And if the options for standalone Part D plans become more limited, the change could lead more older Americans to join private Medicare Advantage plans, which often include prescription drug coverage.
Even so: While losing a Medicare drug plan could lead to a disruption in care for older adults, it could also have a positive effect, the letter says: 'Loss of coverage could encourage patients to shop for a better plan, which most currently do not do.'
What's next: If insurer exits from Part D plans continue to rise past 2025, 'Congress may need to take policy reforms,' the researchers suggest. Those reforms could include introducing a Part D standalone public option or making the standard Part D benefit design more generous.
Names in the News
Northwell Health President and CEO Michael Dowling is stepping down, effective Oct. 1, after more than 23 years in the position. Dowling will transition to the role of CEO Emeritus and serve in an advisory capacity at the New York-based nonprofit health care provider.
WHAT WE'RE READING
The Wall Street Journal's Christopher Weaver and Anna Wilde Mathews report on the DOJ investigating UnitedHealth Group for possible criminal Medicare fraud.
The Current's Margaret Coker reports for ProPublica on the suite of services Georgia commissioned from Deloitte to run and promote its Medicaid work-requirement program.
The Associated Press' Mike Stobbe and Geoff Mulvihill report on the 27 percent fall in U.S. overdose deaths in 2024 — the largest one-year decline ever recorded.