Huge Budget Cuts on the Horizon For Medicaid As Congress Prepares Budget Framework

This week, Congress is starting the process to enact legislation that would probably include significant reductions to Medicaid.

The House Budget Committee published a budget resolution outlining its proposals on Wednesday.

The budget blueprint proposes $4.5 trillion in tax reductions and raises the debt ceiling by $4 trillion. It mandates the Energy and Commerce Committee to reduce expenditures by $880 billion over a decade, anticipated to include significant Medicaid reform, and directs the Education and Workforce Committee to eradicate $330 billion in spending over the same period.

Medicaid provides assistance to 80 million low-income individuals in the U.S. and constitutes one-sixth of total healthcare expenditures. The program is funded by the federal and state governments. Republicans consider Medicaid reductions a key goal for forthcoming legislation.

To enact reconciliation laws and forward significant legislation along party lines, the Senate and the House have to pass identical budget measures. The House advocates for the passage of all priorities in a singular, comprehensive measure, whilst the Senate recommends dividing the legislation into two separate acts.

“People are under the impression, I think, that Medicaid all goes to urban areas and people in big cities,” Steve Bannon, ex-chief strategist for Trump, stated. “Medicaid goes all over. Working class people by and large are starting to depend more and more on Medicaid. None of these cuts are going to be easy.”

The Senate started its budget resolution procedure on Wednesday. Democratic legislators characterized the proposal as Musk using a sledgehammer at essential programs, including Medicaid, veterans’ benefits, and SNAP food assistance, rather than concentrating resources on the Department of Defense budget.

Senator Ron Wyden, D-Oregon, voiced apprehensions over a Republican-sponsored bill, believing that it will revoke a Biden administration rule imposing stringent criteria on nursing facility workers. The Republicans weren’t too worried about these concerns, though, with Sen. Ron Johnson, R-Wisconsin, noting that nothing is going to the wealthiest because of the cuts.

Trump has said that he “loves and cherishes” Social Security, Medicaid, and Medicare, and does not want to eliminate these programs unless waste and abuse are identified by the government.

House Speaker Mike Johnson, R-Louisiana, reiterated his statements on Monday, asserting that their planned Medicaid reductions only aim to reduce fraud rather than fundamentally reform the program.

A 51-page document sent in Washington last month explores a range of potential reductions Congress may implement. Republicans projected that implementing Medicaid work requirements, an often referenced strategy, would result in savings of $100 billion over a decade.

Per capita limits represent an advancement of block grants and might result in savings of up to $900 billion over a decade, a number closely aligned with the budget framework proposed by the Energy and Commerce Committee. According to this notion, the federal government would provide a “limited” payment determined by a formula centered on enrollee expenses independent of state expenditures.

Policy concepts include many methods to alter the federal medical assistance percentage (FMAP), which adjusts federal payment for state Medicaid expenditures, as well as the repeal of a completed regulation regarding access to Medicaid and the Children’s Health Insurance Program.